Sharp Final Print

8/3/2019 Sharp Final Print

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Sharp-2Group-B Management

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BACKGROUND:Sharp Corporation which is known as the next generations productmanufacturer has established their organization with this rare characteristic to

provide new products in every possible stepand sphere of life. They have the ability tocome up with 20 new products in a yearwhich is like 1 to 2 in every month. Sharps

president spends lots of time and effort looking for innovations for newproducts. Understanding consumers mind and demand is more important forthis company. Finance comes later as they are a real example of consumeroriented company. Technological innovations and the understanding aboutcustomers mind makes them prepare for the future demand and also makesthem to be successful fulfilling it. This is there actual leadership which is veryrare among their competitors.

Kinkyu:

Sharps products development andideas come from their very organizedsenior level expertise. SharpsKinkyu or emergency program usea system to develop outstanding and

challenging ideas and developmentor new products. They makecontinuous revision on the marketand existing products and demand toform the new ideas. Products aredivided into three categories high,middle and low-end products. Eachhas individual characteristics and setof features. In 1993 the 8 best sellingelectric appliance the renowned research centre Nikkei bring into being that 4of them were Sharp products.

Sharps products:

In 1992 this company came out with the idea of LCD-View Cam. This was avideo camera and was based on a the development of a very little reflectionLCD display that was not trouble-free for their competitor to facsimile. Theidea of view cam developed by the feedback the collect from every level. Topdown approach worked well in case of this product. People from bottomsuggested for a video camera featuring all the characteristics LCD-View Camhas.


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Next comes the Awash in the same year1992, a new type of washing machine that

had a sensor to control positioning and itwas also very hard-hitting to duplicate.The idea of Awash developed by anincident witnessed by president Tsuji ofwatching and old lady to use a step toreach into the machine and use a hook topull the clothes out. That is where the ideaof a low height washing machine camefrom. Sharp always put themselves in their

customers shoe to get the knowledge about future requirements. And this is

the secret of being the creation-intensive successful company as the value

creation.

From the innovation Sharps VIP refrigerator in the month of February and itshipped 80,000 units in 7 months. Market share of Sharp refrigerator raisedby 1.1% by this time. VIP refrigerator was designed in a way so that theexternal size gets abridged without reducing the internal space. It waspossible because of the use of silicon dioxide pellets in a vacuumenvironment to reduce the insulation width. And this technology made thecompetitor in little trouble.

Lastly the wide-TV set with the lowestprice in the market. It had IC technologybut was comparatively easy to duplicatebut with the cheapest price the got themarket. This wide screen TV hadincreased the market share by 0.9%according to the Nikko Research Center.Wide-TV sets also used their effectivemethod which is the top down strategy.The president encourages their people tobe suggestive so that they can reach totheir minds. Later on the ideas get investigated in the research and

development group.


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Sharps Market Share:

Products Market ShareElectronic Calculators 36.0%

Home Phones 22.0%

Microwave Ovens 20.9%

Japanese word processors 20.2%

Color TVs 15.5%

Camcorders 15.2%

Refrigerators 13.0%

VCRs 12.0%

Plain paper copiers 6.9%

Product Development System of Sharp:

Sharp is known as one of the mostcreative companies in Japan. Because ofthe ability to explore the market andconcentrating on new technologies theycome with new product ideas andinnovation of very unique products in themarket. They get the financial backupfrom the headquarter. When theoutcomes r short term, the organizationalimpact is significant and the potential of

sales is huge the usually get fund from headquarter. Each proposal gets

investigated and pointed by a team with a chairperson. If the project gets highpoint it is judged as the valid one and submitted to the engineering meetingheld monthly. Then the resource judgment gets done and the proposal gets itsallocated budget. After a very flexible time of three years the group issupposed to repay the half of the investment on that project back to theheadquarter. development of one kinkyu project generally takes one to oneand half year time. So it is quite possible to repay within given time period.

Longer term projects are the responsibility of R&D group and get the fundingfrom the corporate R&D group as it is a corporate-wide effort. In this case they

use their own judgment and assessment. About 80% of the projects are


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product development projects. And the remaining 20% are softwaredevelopment or service development for new business.

The vital characteristics of kinkyu projects are the responsibility and power isgiven to the project head. And only the president can choose this person. Allthe team members are supposed to understand his corporate power andshould abide by him. Like the other typical companies Sharp do not give theresponsibility to the vice president or divisional manager rather make such

person in charge thatcan understand and runthe project well.

The reason of theirsuccess is mainly the

cultivation ofcreativeness and thephilosophy of exploringthe market to find the

needs. In different era they target different market. Like in 1975 their targetwas the baby boomers. In 1984 and 1985 the baby boomers families beganto take over Sharps products and their products did not work well that time. Itrequired Sharp to come up with new concept and a new strategy. For this thecompany founded the research group who make the investigation. Theyappreciate unique ideas from anywhere possible. Their different approacheslike on the field observation, top-down approach and other knowledge sharingconcept are generously accepted into the organization. Practice of coming upwith new project ideas and targeting different market with different productdesign and strategy is Sharps unique character which have made them to bein the top list of the most creative company. The have the mentality to developproducts according to the eachscenario that gets viewed.

Problem Sharp faces:

The problem they had was theirlong distance communication.Product division was in Tochigiand the audio products divisionwas in Hiroshima. They need aorganization that can combinethese two in making discussion

and decision about audio-visualproducts. Some organization that canintegrate products would help them tocome out of this problem.

Another problem they faced was aboutdifferent perspective. In real life one


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single person plays numeral role and each of the roles represents differentwindow for self-expression. Observation does not work that well here. Priority

in life varies person to person. It is hard to figure out peoples priority byobserving the field. To make the process perfect they need to observe each ofthe scene of a persons or a consumers life which is not easy practically.

Third problem was the managing knowledge and clear conception of thesenior managing director, Tsuji about what the organization should be doing.The way how the new ideas should be done and the process is decided bythe teams themselves. There is less involvement of higher authority. Thedizzy perception makes the way complex of reaching the target.

Overcoming problems:

As the result of concluding to the solution the company has come up with thedesign center. There is many reasons to stimulate the organization to do newthings and the organization units need to be responsible for doing them. Theco-ordinate division and executives have this ability but what the companylack is a life style center which will show certain pattern. The creative life styleplanning group has two centers in Osaka and Makhuri. They review thedesigns and revise them to be more customer oriented. They also do themarket survey in USA, Europe and Japan to get suggestion from theconsumers and understand the lifestyle. This designcenter is now considered as the brain of the company.

To make themselves more focused and accurate theywanted to observe their customers 24 hours a day.They monitored housewives and customers. For thisreason they set up a center how people spend their

lives, what things they care moreand their priority. So that they canunderstand more about their consumers lives anddemand. Outstanding products came out from such studyabout consumer behavior.


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From the previous stage they developed it toward more sense following andprofessional one.

Next level ofconsumer was thesense leader. Atthe bottom of themarket there wasno senseconsumer or themass markettargetedproduction. Theircompetitor like

Matsushita andSanyo target massmarket where Sharp is more customer oriented and take care of the singlepossible needs with there continuous revision of product development.Sophisticated behavior toward the needs continued more through the step orsense leading. In sense leader process the call the person who bought theproduct. Meeting with the sense leaders typically lasted two hours andincludes five people from the company. After the meeting the top officerinitiates action on the recommendation.

Future plan of Sharp:

In November 1992 Sharp opened their multimedia development headquarterto celebrate their 80th anniversary with a view of futuristic international marketplayer. They believe multimedia product will merge the existing productscategories and will meet next generations products. Developing strategicalliance with other major company will give them the access to learn aboutdifferent strategy and mold it according to their working style and approach sothat they can achieve more efficiency. As the Nikkei Sangyos newspaperarticle noted that Sharp lacked in communication technology so such futureprojects like multimedia will be able to overcome this lap and fulfill thedemand and hold a stronger position in the market compare to their

competitors.


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THEME

Sharp is one of the leading creative companies of Japan which wasestablished in 1912. From then, Sharp continued its innovations derived fromthe companys ability to commercialize its technologies. Haruo Tsuji is thecurrent President of Sharp Corporation whose leadership enrolled Sharp to bethe most profitable organization in the technological industry. However, thereare some problems in Sharp regarding- Sharp did not expand their businessin the large markets like China, India and Russia; Sharp has strongcompetitors like Sony, Matsushita, JVC and others in the market; the profitmargin of Sharp has decreased from 4.4% in 1990 to 2.1%; Sharp targets thesense leaders, however, finding them is time consuming and difficult; Sharp isinvesting a large chunk of money in Research and development (R&D), sti ll,the major development of products are very few in number; the Vice Presidentor Division Mangers are insignificant than the Heads of Kinkyu project whichcan cause conflict inside Sharp; Sharp is working towards full automation of

its production line which is really expensive.


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MAIN ISSUE:How ca n Sharp u t i l i ze i ts Ind ian , C h inese and R uss ianfac to r ies to compete w i th i ts compet i to rs a nd i nc rease i tsp ro f i ts?


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MANAGEMENT BIASED SWOT

ANALYSISStrength:

1. Most creative company in Japan:

Sharp has undoubtedly recognized as one of the most creative companiesin Japan. They have continued innovations derived from the companysability to commercialize its technologies.

Justification:

As Sharp use different methods to practice creativeness in theorganization and be successful as they are very focused toward the needof their consumers, they have made their way to be in the top list of mostcreative companies.

2. Always think from customers perspective by putting them inconsumers shoes:

Sharp observe the market and get the idea about it by putting themselvesin their consumers shoe. As they put them at customers place they getthe idea about different type of lifestyle as well as different types of

demands derived from that.

Justification:

Incident described like getting idea about Awash washing machine whilewatching an old lady using step to reach the regular washing machine andusing hook to pull out the clothes gave the idea of a new revolutionarywashing machine shows their commitment toward the customerorientation.

3. Keep pace with changing demand:

They use modern technology to develop their product according to thedemand. To keep pace with the changing demand and habits Sharp is notfalling behind to face and meet them.

Justification:

Sharps R&D team and new formed multimedia group and communicationgroup are continuously coming with suitable technology and both

developed and new type of products like View-Cam.


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4. Different product design for each different product:

Sharp prefer individual product design for every single product. Smallgroups take form in order to take the responsibility and to understand theproduct idea and to design according to that.

Justification:

The process described shows that small group take care of differentprojects where there is a project head and other member are supposed tofollow him. This person is chosen based on the understanding andtechnological qualification that is needed for the product.

5. Development of Kinkyu for each individual projects typically takesone to one and half year time to complete:

Kinkyu projects of Sharp takes lesser time than other projects. Generallythese projects take one to one and half year to accomplish. This isreasonable to meet the demand on the proper time when customers needit.

Justification:

The kinkyu project is effective because of their short time accomplishmentcharacteristic. It helps them to reach the target market the products aredeveloped for.

6. Make sure the succession of Kinkyu projects:

They make sure that the products kinkyu projects are handling areprofitable enough. Through lots of investigation and engineering meetingthat holds once in a month they allocate fund for such type of projects. Butdo it only then when they are sure about the succession of it.

Justification:

The process and consideration each of the product development ideasgoes through assures the accomplishment of the projects.

7. Very active R&D department

Sharps research and development group is the most active and efficientgroup as they deal with all the technical support and the requiredresources needed.


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Justification:

R&D department of Sharp makes all the process goes through via them.They make necessary research and come up with an appropriatesuggestion or way when a new type of product is suggested from any ofthe sources.

8. Involvement of top to bottom level employees using top-downapproach and sense leader:

Sharp has introduced a very unique process to get more possible ideasinside the organization. They have brought this approach ca lled top-

down where lower level employers are allowed to share their ideas andperspective and top level management welcomed this. Sense leader

refers to the approach where Sharps employees find out a sharp productuser and organize a meeting where the consumer gives the feedback.

Justification:

The reason these are counted as one of the strength is because top-downapproach helps to get various ideas which may not be seen from the toplevel managements. And sense leader process makes very specificcomment about the product so it gets easy to take necessary steps tomake the customization or develop products next time.

9. On the field observation and knowledge seeking are practiced

It is the culture of the company to focus the scenario wherever possibleand investigate and understand customers want.

Justification:

On the field observation makes the way to get closer with the scenariowhere the demand can be seen. It enhances their knowledge and givessuggestion about current product development and future products.

10. Free flow of sharing knowledge and ideas:Both the inside and outside culture of this organization appreciate a barrierfree flow of knowledge. They never mind having suggestions and ideasfrom different sources even if from lower level employees or customersfeedback or reaction.

Justification:

A barrier free environment gives the access to the employees to exploretheir mind and think about new ideas as they are very much appreciatedabout it.


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Weaknesses

1. Not so as many major developments as desired:

Sharp may have a large number of products that are being revised orsold in a given year, but the major developments are not so many innumber.

Justification:

As per Sharps projected goals set by Mr. Haruo Tsuji, president of

Sharp Corporations, through the introduction of kinkyu projects, Sharphas the line-up of at least 20 products in a given year. But, Sharp onlymanages to cover 3-5 products per quarter, meaning only about 15-20

per year.

2. Market research becomes expensive as Sharp needs tounderstand each consumers mind:

Consumer had their own mode of expression which caused Sharp toinvest more for extensive market research. But as we all know, mostexpenses in a market research are not meant with full purpose due tothe mere arrangement of such investigations.

Justification:

Sharp is having a hard time trying to know what is on the consumersmind and what they exactly want. This is very time consuming andresource overwhelming project that Sharp has taken into their hands.

3. Their visual products division was in Tochigi and audio inHiroshima. This created a considerable amount of pressure onvaluable time and finances:

Every industry, technical or not, needs to cut costs to increase profitand prosper in the market. But this achievement becomes difficultwhen various production lines of the company are situated at differentplaces.

Justification:

When different sectors are situated at different places, costs such asmainly transport, communication and the uses of other variableresources increases and causes lower profit margin for themanagement.


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4. Nikkei Sangyos newspaper article said Sharps current weaknesswas in communication technology:

Whenever a local or national newspaper or other media publishessomething about a company, they make it known to everyone who isreading it.

Justification:

So when Nikkei published an article concerning the weakness ofcommunication technology in Sharp, it created a mindset in theconsumers mind that they must avoid Sharps specified product lines. This ultimately means financial loss for the company, and a threat.

5. Sonys lightweight handycam Snap was taking over the market:

When Sonys handycam Snap was launched into the market, Sharpwas facing heavy competition from Sony.

Justification:

The competition was mainly because Sonys Snap was smaller in size,lighter and easier to be held in only one hand than that of SharpsViewCam at that time in the market.

6. Overall operating profits were 2.1% of sales in 1992, this is downfrom the 4.4% profit margin of 1990:

Profits were decreasing by the day for Sharp Corporation and becameless than half by two years time. This was a very bad news for the

management of the Sharp Corporation.

Justification:

Although the 2.1% mark was greater than that what Sharp profited inthe year 1987 and 1988, the decrement of this from only two yearspushed Sharp into a vulnerable position with the threat of further

downfall.

Opportunities

1. In 1993, Sharp increased its market share of refrigerators 1.1%:

Sharps refrigerator VIP was becoming a market phenomenon from thebeginning of its incision into the market. Sharp share was constantlyincreasing, surpassing the expected sales.


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Justification:

With the introduction of the newest method of reducing the outsidespace of the fridge without cutting the space inside was an instant hitwith the customers. This also incuded VIP refrigerators and Awashwashing machines introduced new methods to cut heat and allow lowcost productions by reducing outside space with silicon dioxide.

2. Sharp avoids bureaucracy as much as possible to maintain paceand keep up with the kinkyu project goals:

By avoiding the bureaucracy in the organization, Sharp manages tkeep pace with the ongoing kinkyu projects to meet the requireddemand in the market.

Justification:

Competitors of Sharp tried to introduce the kinkyu progression in theircompanies and they failed at it. One of the reasons for their failure wasto maintain bureaucracy which Sharp avoids by all cost.

3. The search for sense leaders was difficult, yet kept Sharp aheadof their competitors:

The search for the sense leaders was becoming a very frustratingmethod to comply with in order to keep up and keep themselves aheadof Sharps competitors to gain profit and maintain pace.

Justification:

Sharp was trying to track down the sense leaders in the market one byone by complying with the traditional method of asking someone, who

did you get this suggestion from? This could become a burden for thecompany if a suitable alternative is not figured out soon. But this keptSharp ahead of their competitors.

4. Large new markets in China and India opened up newopportunities with huge potentials:

Developing countries like Pakistan and Latin American countries sendinvitations to Sharp to set up factories.

Justification:

Developing countries like Pakistan and Latin American countries werethe emerging markets that were growing at the staggering rate of 6-10% per year in demand. Bangladesh is relieved from such patent rightand all other kinds of related bureaucracies which slows down theproduction and manufacturing of critical life saving machines. In a


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country like Japan where people everywhere and is stricken with theendless cycle of innovation, electronic manufacturer.

5. The ViewCam created the all-in-one display/camera/recorder with60.9% bought by first time purchasers of such products:

Although ViewCam faced heavy competition from Sonys Snap, it wasstilled very much popular with the first time users of the product. This iswhere Sharp managed to gain the majority of share in this portion ofthe market.

Justification:

Although the 2.1% mark was greater than that what Sharp profited in

the year 1987 and 1988, the decrement of this from only two yearspushed Sharp into a vulnerable position with the threat of furtherdownfall. When different sectors are situated at different places, costssuch as mainly transport, communication and the uses of other variableresources increases and causes lower profit margin for themanagement.

6. Sharp surpassed Matsushita in market share in 1993 to becomenumber. 2 in video camera market and projecting a 40% by half of1994:

The major competitors in the video camera market were Sony, JVC

and Matsushita. Sony was currently number one, Sharp was numbertwo, and Matsushita was number three. JVC admitted that they lostshare in 1993.

Justification:

The reason these are counted as one of the opportunities is becausetop-down approach helps to get various ideas which may not be seenfrom the top level managements. And sense leader process makesvery specific comment about the product so it gets easy to takenecessary steps to make the customization or develop products next

time.7. Sharp introduced personal notebook Zaurus for $500 whereas

Apples Newton was heavier with a little more functions priced at

$800:

According to Sharps president Mr. Tsuji, Multimedia was becoming animportant area. Sharp was going to link many small products with thenetwork.

Justification:

When they think about the computer market, we have grown up fromthe calculator business to the electronic organizer, and now the Zaurus


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or Apple Newton. This has not been a success yet, but in the future wesee the integration of pictures, voice and data communications. Those

will be central to technological innovations in the future.8. ViewCam teleport allowed user to send pictures a telephone line

to another ViewCam:

A bottom-up example of Sharp was theViewCamTeleport. Users cantake a picture and send it through a telephone line to anotherViewCam. They can send their child's picture to the grandparents. Thewide-screen TV is another, displaying news announcements on thescreen as they occur. This can also be used for advertising.

Justification:

Sharp was hinting the future of telecommunication through theintroduction of ViewCam teleport with the likes of e-mail and otherforms of data transfer that is available today.

9. Research in second generation flash memory is in development inintegration with world famous microprocessor company Intel:

Flash memory has potential. Sharp were then expanding productionand developing the second generation flash memory with Intel. This is

strategic cooperation with the world famous microprocessor company.According to Sharp, Intel was the best imaginable partner. Sharp isalways extending feelers for potential cooperation.

Justification:

When different sectors are situated at different places, costs such asmainly transport, communication and the uses of other variableresources increases and causes lower profit margin for themanagement.

Threats

1. The wide-TV introduced at the lowest price in market by applyingIC technology was easy to duplicate by competitors:

The introduction of low priced wide-TV in the market was very muchvulnerable to piracy and other forms of threats because Sharpacknowledged it themselves that the product was easy to duplicate.

Justification:

The reason these are counted as one of the opportunities is because top-down approach helps to get various ideas which may not be seen from the

top level managements. And sense leader process makes very specificcomment about the product so it gets easy to take necessary steps to


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make the customization or develop products next time. Vulnerability of aproduct in the market is always faced with cheap replacements or

alternatives.

2. Sharp was first to make a home copier with facsimile option. Butmarket was soon taken over by Toshiba:

This can be transferred to another using infrared communication. That hasbecome the world standard for infrared communications. Sharp havedeveloped the ability to send a digital facsimile through telephone.

Justification:

Sharp have developed a printer that communicates with the Zaurusbyinfrared used for data transfer of pictures. Sharp also have an infraredcommunication link for PCs using Windows. These are examples ofbottom up approaches.

3. The use of NTTs brand name in their personal handy phonemakes Sharp less of an important brand:

We also have miniaturization technology that allows us to develop verylight-weight and portable products. Our PHS, personal handy phone, is anexample. We are one of many suppliers of this product OEM to NTT.Sharps is the preferred PHS. In the PHS market, there are 43 modelsbeing produced by 29 vendors.

Justification:

Sharps two models account for between 60 and 70 percent of the market.Our models weigh about half as much as other models at 200 grams.Because it has NTTs brand name, consumers dont realize that theyprefer Sharps models. The smallest cellular phone is 95 grams. It


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MANAGEMENTS PERSPECTIVE1) Sharp did not expand their business in the large markets like

China, India and RussiaSharp is clearly recognized asone of the worlds leading

technological based company.It continued its innovationsderived from the companys

ability to commercialize itstechnologies. Sharp is successful in expanding its overseas position inEurope, U.S. Japan and other Asian countries. However, Sharp did not

operate its expedition in India, China and Russia where they can targeta large market of more than 2.3 billion people. Also, China and Indiaare the new emerging nations with growth rate of 6-10 % per year.Therefore, to capitalize these markets, Sharp needs to target their localneeds, meeting their requirements and come up with the right productsfor them. Also, Sharp needs to maintain its image and technicalcompetence in those markets with fine quality products followed byrelatively cheaper price. Furthermore, Sharp requires producingproducts which are suitable for Indian, Chinese and Russian peoplewith lower incomes and different tastes, attitude and behavior.

2) Sharp has strong competitors like Sony, Matsushita, JVCand others in the market. Sharp consists of largecollection of electrical devices,starting from color TVs, VCRs,Refrigerators, Air Conditionersand many more. However, itcannot acquire competitiveadvantage in any of its productsdue to strong competitors likeSony, Matsushita, and JVC.Sharp invests a large amount ofmoney for Research and Development programs which are literallyvery expensive, however, due to its competitors; it cannot enjoy highermarginal profit. It was seen that whatever Sharp build, their opponentstake very negligible time to come with substitutes. Although, Sharpenjoys higher market share for i ts electrical gazettes, still sometimes, itfalls behind in profitability as its rivals follows Sharps footsteps andlaunch alternative products for each of Sharps electrical machines.The top management of Sharp is continuously working to overcomethese issue and secure any sorts of competitive advantage which can

be available by creating distinct products through the Sharps

innovative Research and Development department.


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3) The profit margin of Sharp has decreased from 4.4% in 1990to 2.1%.

In 1975, the baby boomers became thetarget of Sharps new life strategy.

However, in 1984-1985, the children ofBaby boomers started taking over the familywhich declined Sharps sell. Then, Sharpcame up with a new concept and strategywhich increased its revenue and made itmarket leader. By the way, in 1991, Sharpssell declined from 4.4% to 2.1%, althoughtheir profits were the highest in the industry.

This is 21st century where it is vital to know about young people (under

20) and their philosophy. It is important to make products to meet theneeds of these people to maintain Sharps profitability; however, findinga concept that fits these people is very complicated. Also, it wasobserved that, Sharp was not coming up with pure new innovationwhich resist to acquire higher competitive advantage through Skimmingpricing strategy. Sharp is clearly recognized as one of the worlds

leading innovative based company. To sustain its fame, Sharp wised tocome up with ideas which will improve its profitability.

4) Sharp targets the sense leaders, however, finding them istime consuming and difficult.Sharps identified different roles that

people played. Sharp considered themost sophisticated people in themarket are professionals, nextcomes the consumers who are alsothe sense leaders, another group ofcustomers are called sensefollowers and the last groups ofpatrons are named as no-senseconsumers. Before, S harp used

Dentsu, Hahuhodo or McCannErickson advertising companies to monitor consumers and to talkabout products. However, those companies used to charge a largequantity of money for their work. Therefore, Sharp itself targeted senseleaders who influenced others to buy new products. The importantaspect of sense leader is their philosophical concept which can befound through interviews and meeting. The life-style center works onconcept. It also deals with pricing, performance and styling. Theobjective is to identify the person who recommended products toothers. Sharps is trying to locate such people, and having meeting withthem to discuss about the products in presence of companys

employees. However, finding these people is time consuming anddifficult


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5) Sharp is investing a large chunk of money in Research anddevelopment (R&D) programs, still, the major development

of products are very few in number.Sharp has a large number of products that are being revised or sold ina given year, however the major development are not so many innumber. Those products are basically divided into high, middle andlow-end products. They each have a different set of features that are

required. Sharp intended tochannel all their efforts intocreating next-generation ofoutstanding new products bydeveloping and exploiting keydevices. For doing so, Sharpinvests large amount ofmoney in Research andDevelopment programs,however, the R&D

departments are unable to come up with new and distinct productswhich cannot be substituted easily by competitors. Therefore, in mostcases, company has products which has alternatives made by theircompetitors, so their profit margin for each of their products are lowand these does not compensate their investment on R&D cost.

6) The Vice President or Division Mangers are insignificant thanthe Heads of Kinkyu project which can cause conflict insideSharp.Kinkyu projects are assignments whichcreate driving force to make somethingnew happen. Kinkyu projects aresuccessful for Sharp due to theirphilosophy of cultivating new marketswith the creation of new products. 80%of the projects are product developmentprojects and the remaining 20% are for

software development or servicedevelopment for new business. After thedecision for the assignment is done,then Sharp developed its internal recruiting for Kinkyu projectmemebers called Star 21. The President of Sharp selects themembers and their Head. The Head of the project has corporate powerwhich can be understand by everyone; surprisingly the Head of suchassignments has more priority and importance than the Vice Presidentor Division Managers of the organization. This additional power ofproject Head is unique; however, it can create conflict of interestbetween the Top Management (Vice President or Division Managers)

and the Project Head.


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7) Sharp is working towards full automation of its productionline which is really expensive

Sharp is clearly recognized as one of the worlds leading technologicalbased company. It continued its innovations derived from thecompanys ability to commercialize its technologies. Sharp has a largenumber of products that are being revised or sold in a given year,however the major development are not so many in number. Thoseproducts are basically divided into high, middle and low-end products.They each have a different set of features that are required. Sharpconsists of large collection of e lectrical devices, starting from color TVs,VCRs, Refrigerators, Air Conditioners and many more.In many ofSharps production division, Sharp is working towards full automation ofits production using a wide variety of automated equipment and robots.

Full automation is very expensive, and these can reduce itscompetitiveness as Sharp is facing significant competition from itsopponents like Sony, Matsushita, JVC and others.


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Sharp did not expand their business in the large markets likeChina, India and Russia

Sharp is clearly recognizedas one of the worldsleading technologicalbased company. Itcontinued its innovationsderived from thecompanys ability tocommercialize itstechnologies. Sharp issuccessful in expanding itsoverseas position inEurope, U.S. Japan andother Asian countries.

However, Sharp did not operate its expedition in India, China andRussia where they can target a large market of more than 2.3 billionpeople. Also, China and India are the new emerging nations with

growth rate of 6-10 % per year.

a)

b)Sharp needs to target the local needs of Chinese, Indian and Russiancustomersand then come up with the right products for them. To do so


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meetrequirementsAlso,

Problem-2Sharp has strong competitors like Sony, Matsushita, JVCand others in the market.

Sharp consists of large collection of electrical devices, starting fromcolor TVs, VCRs, Refrigerators, Air Conditioners and many more.However, it cannot acquire competitive advantage in any of its productsdue to strong competitors like Sony, Matsushita, and JVC. Sharpinvests a large amount of money for Research and Developmentprograms which are literally very expensive, however, due to itscompetitors; it cannot enjoy higher marginal profit. Although, Sharpenjoys higher market share for its electrical gazettes, still sometimes, itfalls behind in profitability as its rivals follows Sharps footsteps andlaunch alternative products for each of Sharps electrical machines.


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Recommendation:

a) Reorganize the Research and Development (R&D) DepartmentIn R&D department, Sharp used to have engineers and managers who

together come up with new product innovation, however, due toextreme competitions with other technological companies, R&Ddepartment needs to get rearranged with employees specialized inpsychology and philosophy. It is believed that, new R&D employeescan come with products which will provide competitive edge to Sharp.Also, managers and engineers will play their vital role as well.

b) Hire experienced engineers and managers from competitors(Sony, Matsushita, JVC)

Every managerial and technicalemployees work very hard for theirorganization, in return they expect goodamount of compensation, with fringebenefits and rewards. Therefore, to becompetitive, Sharp can influence theintellectual engineers and managers ofrivalry organization to switch their jobs and work under Sharp. Thisway, the competitors will lose effectiveness for particular period of time,thus Sharp with new products will increase profitability and market

share.

Justification:Sharp has a huge collection of products to offer to their customers,however, their profits for their products are very negligible due toextreme competitions between Sharp, Matsushita, JVC and others.Therefore, reorganizing the R&D department by employing employeeswith psychology and philosophy majors and appointing geniusengineers and managers from competitors firm can help Sharp to

outperform each of their every businessrivals.


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Problem-3The profit margin of Sharp has decreased from 4.4% in 1990 to 2.1%.

In 1991, Sharps sell declined from 4.4%

to 2.1%, although their profits were thehighest in the industry. This is 21st centurywhere it is vital to know about youngpeople (under 20) and their philosophy. Itis important to make products to meet theneeds of these people to maintain Sharpsprofitability; however, finding a concept

that fits these people is very complicated. Also, it was observed that,Sharp was not coming up with pure new innovation which resist toacquire higher competitive advantage through Skimming pricingstrategy. Sharp is clearly recognized as one of the worlds leadinginnovative based company. To sustain its fame, Sharp wised to comeup with ideas which will improve its profitability.

Recommendation:a) Product planning group needs psychological, philosophical and software

knowledgeSharp has to target the needs ofyoung consumers who have adiversified mind, to catch theirattention, products need to beattractive, logical or ethical andIT friendly. That is why, to fulfilltheir needs, Sharp appointedPsychologists, philosophymajors and software engineersto work side by side with technical engineers and managers andproduce products which will enlighten young generation to use Sharps

creation.

b) Sharp can introduce their factories in Southeast Asia and China Sharp did not operate its expedition in India and China where they cantarget a large market of more than 2.05 billion people. Also, China andIndia are the new emerging nations with growth rate of 6-10 % peryear. Moreover, in China and India, Sharp will get skilled labor forcewith cheap wages, inexpensive management and technologicalemployees and also can use local suppliers that provide quality rawmaterials with minimal cost. The production cost of those factories will

be very low. Also, India and China has a large segment of middle-classfamilies who can afford and will buy Sharps creations.


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Justification:To fulfi ll the desires of the young customers, innovation with proper

management is not enough,they need something extrawhich will and can beprovided by the newly hiredPsychologists, philosophymajors and softwareengineers, that is whyproduct planning groupneeds to be di versified and

this will increase their profitmargin. Also, the Chinese and Indianmarket is very huge, if Sharp cancreate products according to theirrequirements, then Sharp will reachthe peak of its business.

Problem-4

Sharp is investing a large chunk of money in Research anddevelopment (R&D), still, the major development of products

are very few in number.

Sharp has a large number ofproducts that are being revised orsold in a given year, however themajor development are not so manyin number. Those products arebasically divided into high, middleand low-end products. They eachhave a different set of features that

are required. Sharp invests largeamount of money in Research and


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Development programs, however, the R&D departments are unable tocome up with new and distinct products which cannot be substituted

easily by competitors. Therefore, in most cases, company has productswhich has alternatives made by their competitors, so their profit marginfor each of their products are low and these does not compensate theirinvestment on R&D cost.

Recommendation:

a) Reorganize the Research and Development (R&D) DepartmentIn R&D department, Sharp used to have engineers and managers whotogether come up with new product innovation, however, the R&D are

unable to create new dimensions of products, therefore, R&Ddepartment needs to get rearranged with employees specialized inpsychology and philosophy. It is believed that, new R&D employeescan come with products which will provide competitive edge to Sharp.Also, managers and engineers will play their vital role as well.

b) Terminate the employment of workers with poor performanceIt was observed that, the R&D department is not functioning as itshould be, so the top management can terminate the employees fromthe R&D department who were insignificant in their work. Theengineers are the prime target of termination as they are one who will

make fresh products. Performance of each and every employee needsto be monitored, promotion and termination needs to be given referringto performance.

Justification:

As R&D department ofSharp is not effectiveas expected, sochange is mandatory;that is employing

workers with majors inphilosophy andpsychology. Employeeperformance is verycrucial for organizationsuch Sharp, as Sharpis an innovation basedcompany, so it wantsmaximum output from its employees. It was observed, employees arenot performing well, and therefore terminations of such workers arerequired.


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Problem-5The Vice President or Division Mangers are insignificant thanthe Heads of Kinkyu project which can cause conflict insideSharp.

Kinkyu projects areassignments which createdriving force to makesomething new happen.80% of the projects are

product developmentprojects and the remaining20% are for softwaredevelopment or service

development for new business. The President of Sharp selects themembers and their Head. The Head of the project has corporate powerwhich can be understand by everyone; surprisingly the Head of suchassignments has more priority and importance than the Vice Presidentor Division Managers of the organization. This additional power ofproject Head is unique; however, it can create conflict of interestbetween the Top Management (Vice President or Division Managers)

and the Project Head.

Recommendation:

A meeting can be arranged by the President with the Vice President ordivision ManagersIn that meeting, President discusses about the Kinkyu projects and itsprogresses. As referred to the extra power of the Project Head,President can make the divisional managers understand why theproject head needs to have so much power. This meeting was

arranged, as it seems, there can a conflict of interest between ProjectHead and the Vice President or Divisional Managers as the topmanagement is insignificant than the leader of the Kinkyu Project.

JustificationThe President of Sharp selectsthe members and their Head.The Head of the project hascorporate power which can be

understand by everyone;surprisingly the Head of such


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assignments has more priority and importance than the Vice Presidentor Division Managers of the organization. This is because, the

President wanted them to work independently, and that is why meetingbetween the top management and the President will be helpful toreduce or remove any sort of conflicts among Sharps employees.

Problem-6

Sharp is working towards full automation of its productionline which is really expensive

Sharp is clearly recognized as one of the worlds leading technological

based company. It continued its innovations derived from thecompanys ability to commercialize its technologies.

Sharp consists of large collection of electrical devices, starting fromcolor TVs, VCRs, Refrigerators, Air Conditioners and many more.In many of Sharps production division, Sharp is working towards full

automation of its production using awide variety of automated equipmentand robots.

Recommendation:Sharp can transfer some of its production plants in Asian countries where manufactur

Full automation in production line is very expensive, so Sharp can transfer its productSharp will get skilled labor force withcheap wages, inexpensivemanagement and technological

employees and also can use local suppliers that provide quality rawmaterials with minimal cost. The production cost of those factories willbe very low.

JustificationSharp is suffering from high competition, if it performs fill automation,then Sharp has to invest large quantity of money, thus full automation

needs to postpone. Sharp can transfer its production plants in Asiancountries (India, China, Malaysia, and Taiwan), where, they havecheap labor, cheap raw materials thus less production costs. Also, fullautomation can cause unrest to the employees of Sharp as many ofproduction workers will lose jobs.


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Sharp did not expand their business in the large markets likeChina, India and Russia

Sharp is clearly recognized as one of the worlds leading technologicalbased company. It continued its innovations derived from thecompanys ability to commercialize its technologies.

Sharp needs to target the local needs of Chinese, Indian and Russiancustomersand then come up with the right products for them. To do so

-

How to implement?

Market research on these two countries is very important at first, withinitial introduction of fewer products on the markets.


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Where to implement?

The growth towards the new markets with cost effective products.However, Sharp did not operate its expedition in India, China andRussia where they can target a large market of more than 2.3 billionpeople. Also, China and India are the new emerging nations withgrowth rate of 6-10 % per year.

Who will implement?

Sales and production division has to be active here to supply the marketaccording to the demand.

When will it be implemented?

As soon as possible, because Sharps competitors in Japan are alwaysactive for hunting new market possibilities. Sharp needs to target the localneeds of Chinese, Indian and Russian customersand then come up withthe right products for them. To do so

Problem-2

Sharp has strong competitors like Sony, Matsushita, JVCand others in the market.

Recommendation:

Reorganize the Research and Development (R&D) Department It is believed that, new R&D employees can come with products whichwill provide competitive edge to Sharp. Also, managers and engineers

will play their vital role as well.


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Hire experienced engineers and managers from competitors (Sony,Matsushita, JVC)

Every managerial and technical employees work very hard for theirorganization, in return they expect good amount of compensation, withfringe benefits and rewards.

How to implement?

Hire experienced engineers and managers from competitors (Sony,Matsushita, JVC) and reorganize the Research and Development (R&D)Department. Although, Sharp enjoys higher market share for its electricalgazettes, stil l sometimes, it falls behind in profitability as its ri vals followsSharps footsteps and launch alternative products for each of Sharpselectrical machines.

Where to implement?

The implementation will take place in the R&D dept. when hiring ofcompetitors take p lace. Sharp consists of large collection of electricaldevices, starting from color TVs, VCRs, Refrigerators, Air Conditioners andmany more.In R&D department, Sharp used to have engineers andmanagers who together come up with new product innovation, however, dueto extreme competitions with other technological companies, R&D departmentneeds to get rearranged with employees specialized in psychology andphilosophy.


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Who will implement?

The HR dept. plays the role here with the experience of Mr. Haruo Tsuji. It isbelieved that, new R&D employees can come with products which will providecompetitive edge to Sharp. Also, managers and engineers will play their vitalrole as well.

When to implement?

It can be implemented whenever the R&D sector is requiring new applicants.Sharp can influence the intellectual engineers and managers of rivalryorganization to switch their jobs and work under Sharp. This way, thecompetitors will lose effectiveness for particular period of time, thus Sharpwith new products will increase profitability and market share.Sharp has ahuge collection of products to offer to their customers, however, their profitsfor their products are very negligible due to extreme competitions betweenSharp, Matsushita, JVC and others.


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Problem-3

The profit margin of Sharp has decreasedfrom 4.4% in 1990 to 2.1%.

In 1991, Sharps sell declined from 4.4% to 2.1%,

although their profits were the highest in the industry.This is 21st century where it is vital to know aboutyoung people (under 20) and their philosophy. It isimportant to make products to meet the needs ofthese people to maintain Sharps profitability; however, finding a concept that

fits these people is very complicated. Also, it was observed that, Sharp wasnot coming up with pure new innovation which resist to acquire higher

competitive advantage through Skimming pricing strategy. Sharp is clearlyrecognized as one of the worlds leading innovative based company. Tosustain its fame, Sharp wised to come up with ideas which will improve itsprofitability.

Recommendation:

Product planning group needs psychological, philosophical and softwareknowledge

Sharp has to target the needs of young consumers who have adiversified mind, to catch their attention, products need to be attractive,

logical or ethical and IT friendly.

Sharp can introduce their factories in Southeast Asia and ChinaSharp did not operate its expedition in India and China where they cantarget a large market of more than 2.05 billion people.

How to implement?

Product planning group needs psychological, philosophical and software

knowledge in addition to Sharps introduction of theirfactories in SoutheastAsia and China. That is why, to fulfi ll their needs, Sharp appointedpsychologists, philosophy majors and software engineers to work side by sidewith technical engineers and managers and produce products which willenlighten young generation to use Sharps creation.

Where to implement it?

The product planning groups where design and concept are essential.Moreover, in China and India, Sharp will get skilled labor force with cheapwages, inexpensive management and technological employees and also canuse local suppliers that provide quality raw materials with minimal cost. Theproduction cost of those factories will be very low. Also, India and China has a


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large segment of middle-class families who can afford and will buy Sharpscreations.

Who will implement it?

HR dept. is largely responsible for implementation with collaboration of headsfrom product developments and company high officials. To fulfill the desires ofthe young customers, innovation with proper management is not enough, theyneed something extra which will and can be provided by the newly hiredPsychologists, philosophy majors and software engineers, that is why productplanning group needs to be diversified and this will increase their profitmargin. Also, the Chinese and Indian market is very huge, if Sharp can createproducts according to their requirements, then Sharp will reach the peak of itsbusiness.

When will it be implemented?

As soon as possible, else Sharp will soon start making less and less profits,that makes company difficult to operate. Sharp did not operate its expeditionin India and China where they can target a large market of more than 2.05billion people. Also, China and India are the new emerging nations withgrowth rate of 6-10 % per year. Sharp has to target the needs of youngconsumers who have a diversified mind.


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Problem-4

Sharp is investing a large chunk of money in Research anddevelopment (R&D), still, the major development of productsare very few in number.

Sharp has a large number of products that are being revised or sold ina given year, however the major development are not so many innumber. Those products are basically divided into high, middle andlow-end products.

Recommendation:

c) Reorganize the Research and Development (R&D) DepartmentIn R&D department, Sharp used to have engineers and managers whotogether come up with new product innovation.

d) Terminate the employment of workers with poor performanceIt was observed that, the R&D department is not functioning as itshould be, so the top management can terminate the employees fromthe R&D department who were insignificant in their work.

How to implement it?

There are employees in every organization who does not perform well. Here,Sharp can terminate the employment of workers with poor performance. AsR&D department of Sharp is not effective as expected, so change ismandatory; that is employing workers with majors in philosophy andpsychology. Employee performance is very crucial for organization suchSharp, as Sharp is an innovation based company, so it wants maximumoutput from its employees. It was observed, employees are not performingwell, and therefore terminations of such workers are required.


Implementation is carried out in the R&D sector. In R&D department, Sharpused to have engineers and managers who together come up with newproduct innovation, however, the R&D are unable to create new dimensions ofproducts, therefore, R&D department needs to get rearranged with employeesspecialized in psychology and philosophy. It is believed that, new R&Demployees can come with products which will provide competitive edge toSharp. Also, managers and engineers will play their vital role as well.


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Personnel who are responsible for hiring and firing (HR dept.). The engineersare the prime target of termination as they are one who will make freshproducts. Performance of each and every employee needs to be monitored,promotion and termination needs to be given referring to performance.

When to implement it?

Poor performance brings down any company anywhere in the world. Poorperformance cannot be tolerated, so action must be effective immediately.Those products are basically divided into high, middle and low-end products.

Problem-5

The Vice President or Division Mangers are insignificant thanthe Heads of Kinkyu project which can cause conflict insideSharp.

Kinkyu projects are assignments which create driving force to makesomething new happen. 80% of the projects are product developmentprojects and the remaining 20% are for software development orservice development for new business.

Recommendation:

A meeting can be arranged by the President with the Vice President ordivision ManagersIn that meeting, President discusses about the Kinkyu projects and itsprogresses.


Meetings can be arranged by the President with the Vice President or divisionManagers to ensure entrustment among the top management of thecompany. Head of such assignments has more priority and importance thanthe Vice President or Division Managers of the organization. The President ofSharp selects the members and their Head. The Head of the project hascorporate power which can be understand by everyone; surprisingly this isbecause, the President wanted them to work independently, and that is whymeeting between the top management and the President will be helpful toreduce or remove any sort of conflicts among Sharps employees.


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This can be implemented with the top executives of the company. ThePresident of Sharp selects the members and their Head. The Head of theproject has corporate power which can be understand by everyone;surprisingly the Head of such assignments has more priority and importancethan the Vice President or Division Managers of the organization. Thisadditional power of project Head is unique; however, it can create conflict ofinterest between the Top Management (Vice President or Division Managers)and the Project Head.


Implementation is carried out by the company president and head. As referredto the extra power of the Project Head, President can make the divisionalmanagers understand why the project head needs to have so much power.This meeting was arranged, as it seems, there can a conflict of interestbetween Project Head and the Vice President or Divisional Managers as thetop management is insignificant than the leader of the Kinkyu Project.


On a regular basis (monthly, quarterly, etc) to ensure company standard ofhighest quality. They each have a different set of features that are required.Sharp invests large amount of money in Research and Developmentprograms, however, the R&D departments are unable to come up with newand distinct products which cannot be substituted easily by competitors.Therefore, in most cases, company has products which has alternatives madeby their competitors, so their profit margin for each of their products are lowand these does not compensate their investment on R&D cost.

Problem-6

Sharp is working towards full automation of its productionline which is really expensive

Sharp is clearly recognized as one of the worlds leading technologicalbased company. It continued its innovations derived from thecompanys ability to commercialize its technologies.

Sharp consists of large collection of electrical devices, starting fromcolor TVs, VCRs, Refrigerators, Air Conditioners and many more.


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In many of Sharps production division, Sharp is working towards fullautomation of its production using a wide variety of automated

equipment and robots.

Recommendation:

Sharp can transfer some of its production plants in Asian countrieswhere manufacturing is cheaperFull automation in production line is very expensive, so Sharp cantransfer its production plants in India, China, Malaysia and Taiwan.


Outsourcing the production plants in developing countries is much cheaper

than converting to full automation systems. Sharp is suffering from highcompetition, if it performs fill automation, then Sharp has to invest largequantity of money, thus full automation needs to postpone. Sharp can transferits production plants in Asian countries (India, China, Malaysia, and Taiwan),where, they have cheap labor, cheap raw materials thus less productioncosts. Also, full automation can cause unrest to the employees of Sharp asmany of production workers will lose jobs.


Implementation by outsourcing has to be done in the developing countries

where the labor is cheap, such as China, India, Pakistan, etc. Sharp will stillwork in Japan for the progress of new and advanced products which will bemarketed in Japan, U.S. and European nations. In Asian countries, Sharp willget skilled labor force with cheap wages, inexpensive management andtechnological employees and also can use local suppliers that provide qualityraw materials with minimal cost. The production cost of those factories will bevery low.


The president has to be mainly responsible for such strategic movement withthe collaboration of HR dept. Sharp is clearly recognized as one of the worldsleading technological based company. It continued its innovations derivedfrom the companys ability to commercialize its technologies.


Implementation can be done whenever the market research concerning the

new places has been completed. Sharp consists of large collection of

electrical devices, starting from color TVs, VCRs, Refrigerators, Air

Conditioners and many more. In many of Sharps production division, Sharp is

working towards full automation of its production using a wide variety of

automated equipment and robots.


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AppendixThe Power-Point slide is included in the appendix. Moreover, the softcopy of the report is already sent to instructors email address.

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