Management MessageIR Information

Management Message

Creating value for our customers

Making the most of JVC and KENWOOD technologies and know-how to become a partner who creates new value while delivering outstanding solutions

This fiscal year marks the second year of JVCKENWOOD Group’s “Vision 2020” Mid- to Long-term Business Plan, which was launched in May 2015. Under Vision 2020, we have chosen ROE as our principal management indicator; we have also implemented performance evaluation and business portfolio management by making ROIC an internal management indicator. As the result of these changes, we are now in a position to shift our management focus to our strengths, and embark on the process that will see us evolve from a manufacturer/distributor into a company capable of creating customer value by providing solutions to issues confronting our customers.

To realize this vision, management of our business portfolio will be based on factors such as alignment with our long-term vision and capital profitability. We will divide our businesses into three categories: growth-leading businesses, profit-base businesses, and others, allocating management resources and conducting strategic M&A tailored to the characteristics of each business category. We intend to conduct growth investment in the growth-leading automotive sector, backed by stable income from the profit-base public service and media service sectors. As we transition our business structure to one that can achieve strong profit growth over the long-term, the public service and media service sectors will function as the foundation and the automotive sector will generate approximately one-half of our profits.

◆ Achieving our vision for 2020

The JVCKENWOOD Group will be managed via a matrix of five regions and three business sectors in accordance with the new management structure approved by the 8th Ordinary General Meeting of Shareholders. To ensure that management is agile, each business sector as well as each of the five regions will be led by a chief operating officer (COO) responsible for operations in their respective areas. Under this new management structure, we will continue to strive to grow our existing businesses while applying our collective audio, video and communications technologies and know-how to promising and socially significant sectors such as automotive and health care. We will boldly advance our new growth strategy and proactively work to anticipate customers’ issues, playing the role of a valuable partner offering cutting-edge solutions.

◆ Getting on a Full-Fledged Growth Cycle in JK3.0, the Third Stage of Evolution

JVCKENWOOD’s predecessors were Victor Company of Japan (JVC) and KENWOOD, whose brands bearing their names enjoyed the patronage of many customers. We regard the period in which JVC and KENWOOD operated independently as the first stage and call it JK1.0, using the initial letters of the two companies. We position the period from 2008, when the two companies carried out management integration amid dramatic changes in the market environment caused by the progress of digitization, as JK2.0, the second stage. Then we put in place a new management structure at the end of June this year, and we celebrate the 5th anniversary of the establishment of the new JVCKENWOOD through the absorption-type merger of JVC, KENWOOD and J&K Car Electronics by JVCKENWOOD in October. We positioned June this year as the beginnig of JK3.0, the third stage of evolution, and have finally started working to get on a full-fledged growth cycle to evolve to a creator of customer value.

In the stage of JK3.0, JVCKENWOOD aims to transform itself into a company in which all directors and employees can fulfill their roles, work with excitement and feel the joy of work, while sticking to the basic concept of Vision 2020. In addition, we will provide cutting-edge solutions that “wow” people, with the aim of realizing the corporate vision of “creating excitement and peace of mind for the people of the world.”

JK3.0 marks the beginning of the new JVCKENWOOD that will lead us to a fresh stage of growth.

◆ Earning social trust

We believe that a company seeking to achieve sustainable growth must first meet the expectations of its stakeholders and then, through unflagging efforts, earn the trust of society.

JVCKENWOOD Group endeavors to be a company that has earned the trust of its many stakeholder groups, including consumers and corporate clients. We will achieve this goal by working as a single, unified team and leveraging on our strengths to improve the quality of all corporate activities, products and services; raise our competitiveness; and contribute to society.
Simultaneous with these efforts, we will demonstrate our commitment to future generations by enhancing our community-based social contribution and environmental conservation activities.

Drawing on the experience of the Great East Japan Earthquake, we will further reinforce our crisis management system, as well as strengthen organization-wide initiatives for business continuity and measures to address significant risks to management.

We are confident that the complementary strengths of our respective technological assets and experiences will allow JVCKENWOOD to become a partner creating new value and expert solutions for our customers.

Thank you for your continued understanding and support.

October 2016

Takao Tsuji
President and CEO
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