Sanyo Electric Co Ltd - Consumer
Electronics - Japan
Sanyo Electric Co Ltd
Strategic Direction
·
Sanyo is expected to perform
better after drastic structural reforms needed to clearly define its management
plan. It wants to move towards becoming a leading provider of environment-and
energy-related products and services, in line with its Medium-Term Management
Plan. This is in line with the “Sanyo Evolution project.”
·
It is facing the challenge of
finding the most appropriate structural reforms in audio-video products and
home appliances and trying to offset loses by concentrating its management
resources on its core businesses, such as power solutions, Heating-Ventilation
and Air Conditioning (HVAC) products and commercial equipment and personal
mobile devices.
·
As long as Sanyo can sustain
efforts to push forward with structural reforms, such as streamlining, rebuilding
and growing, the company should emerge as a successful market leader in the
industry.
Key Facts
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Full name of company:
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Sanyo Electric Co Ltd
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Address:
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5-5, Keihan-Hondori 2-chome, Moriguchi City, Osaka 570-8677,
Japan
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Tel:
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+81 6 6991 1181
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Fax:
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+81 6 6992 0009
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WWW:
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www.sanyo.co.jp
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Activities:
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Power solutions, HVAC products and commercial equipment,
personal mobile devices, televisions and projectors, camcorders and portable
media players
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Source: Euromonitor International from Sanyo
Electric Co Ltd
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2003
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2004
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2005
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Net sales (millions)
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2,182.6
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2,508.0
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2,484.6
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Net profit (millions)
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(61.6)
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13.4
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(171.5)
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Number of Employees
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79,025
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82,337
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96,023
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Source: Trade press, Sanyo Corp annual
reports
Company Background
·
Sanyo Electric Co Ltd is an
independent company, which maintained a presence in televisions and projectors,
camcorders and portable media players subsectors. It is also present in the in-car
media and navigation systems among others.
·
Sanyo’s overall strategy is
directed towards achieving the goals of its Lifestyle Program and realise its
"Think GAIA" vision. It aims to establish a clear global management
structure, which will lead to quicker decision making and clarify profit
accountability.
·
Sanyo has regional
distribution, concentrated in key cities in Japan. In terms of international
operations, the company plans to transfer its TV business headquarters to its
main market, North America, and form a global management system. Sanyo has been
executing the restructuring mainly focused on its TV business. As a part of
that, Sanyo decided to close its Tudela factory in Spain held by Sanyo Espana,
SA.
·
To further concentrate Sanyo’s
strengths in its core businesses, it closed down the manufacturing of regular
DVD player (except for portable ones), DVD recorder and VCR businesses by
merging Sanyo Echnosound Co Ltd in January 2006 to Sanyo Electric Co Ltd.
Production
·
Sanyo’s production is done outside
Japan. In 2005, the company plans to reorganise its overseas production bases
and restructure the sales system in Japan, through the identification of
unprofitable models, domestic sales reforms and cost structure reforms.
·
Sanyo manufacturers its own
brand products to maintain a presence in the Japanese market. In 2005, the
company was left with a surplus of products and therefore decided to decrease
its range of product models and take measures to improve cost competitiveness.
Competitive Positioning
·
Although Sanyo is one of the
active players in the consumer electronics market in Japan, it maintains other
interests other areas as well. In 2005, it was engaged in “photonecs” and
semi-conductor production.
·
Sanyo has a wide product
portfolio but plans to cut non-marketable brands, which may result in a
narrowing of its product portfolio focusing only on some brands and
concentrating on the most profitable areas of the market.
·
In the course of the company’s
restructuring phase, Sanyo positioned itself at the mid-range of the market. In
2005, its overall share of 1.1% of consumer electronics ranked it twentieth
among the leaders in the market. This however represented a decrease in overall
shares due to tightening market competition brought about by price discounts
among major retailers.
·
In terms of innovation, Sanyo
merely bandwagons in the consumer electronics market. The launch of the Xacti
DMX-HD1 5 mega pixel digital camera was simply a response to the growing demand
for higher resolution, and its “Gorilla” car navigation system simply follows
the trend for terrestrial broadcasting.
·
As a result of its
restructuring, Sanyo is compelled to focus on a more niche positiong. This
means the company is finding products and brands more appropriate to the most
productive subsectors in order to offset losses experienced in the past. Sanyo
derives its share from a strong presence in various subsectors such as
televisions and projectors, camcorders and portable media players.
·
At present, the company
positions itself in the fastest growth segments such as digital televisions,
camcoders, and portable media players, as part of its strategy of maintaining
profitable margins. In 2006, Sanyo concluded a basic agreement with Quanta
Computer Inc based in Taiwan in order to standardise product platforms.
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Subsector
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Share
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Rank
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Televisions and projectors
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7.2%
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8
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TV and VCR/DVD combinations
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11.9%
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3
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Camcorders
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4.2%
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7
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Portable media players
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5.4%
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7
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In-car media players
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6.5%
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8
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Navigation systems
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6.5%
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7
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Other in-car consumer electronics
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2.6%
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10
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Source: Trade press, Hitachi company reports,
Euromonitor International estimates
