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Simultaneously achieving "business creation and integration" and "restructuring"

Mid-term business challenges and measures

As society and the economy experience a greater number of significant changes such as advances in Information and Communication Technology (ICT), manifestation of resource and energy issues and development of globalization, the Ricoh Group is facing a turning point in its business strategies. Specifically in one of our core business areas, Imaging and Solutions, we have recognized trends in customer demand, which include:

  1. 1) Improvement of workflow and reduction of total cost of ownership (TCO)
  2. 2) Shift from "owning equipment" to "using services"
  3. 3) Higher awareness of environmental conservation in order to realize low-carbon offices

To meet these new demands, it has become more important for us to combine multiple products and services to be offered as a set solution for the specific problems of individual customers.
The work styles of our customers are also changing. As greater amounts of information are being digitized, use of cloud computing, smartphones and tablet PCs has been rapidly spreading. As a result, communication media are diversified and the costs for information sharing have been drastically dropped. Diverse ways to generate, store, search and use information have allowed significant advancement. Now, demands are being shifted to new products and services that can supply a good work environment wherever and whenever they are required.

Workplaces and communication in the future

Workplaces and communication in the future

Presently, society demands that global companies play a role not only as entities that generate economic value but also as organizations that make contributions toward solving issues facing the Earth and its people, as well as in creating a sustainable society. At the same time, elements influencing corporate activities are experiencing increased diversification and expansion in their range of effects. Now, not only companies themselves, but also their business partners are being affected.
In order to correctly respond to these changes in the demands of customers and society, the Ricoh Group plans and implements management strategies that are based on three key elements: "economy," "society" and the "environment." We work to both further the growth of the Group and to create a sustainable society.

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The 17th MTP

Our goals for the 17th MTP (implemented from fiscal 2012 to 2014) are to "strive for a global brand, create a future with new innovation and achieve 'growth' and 'restructuring' simultaneously. " Under these goals, we work on two basic strategies: "business creation and integration " and "establishment of highly effective management. "

Business creation and integration

Imaging and Solutions, the core business of the Ricoh Group, has now faced a turning point in terms of reviewing its business structure. We will make this area a stronger base for our business operations by improving the performance of our MFPs and other printers. For example, we will improve their compatibility with other network equipment and reduce their environmental impact. We are also working on our solution services in various areas such as document management. Our customers are now placing more value on "intangible assets (use of services)" in addition to "tangible goods (ownership of products)." To respond to this change, we will seize upon every growth opportunity that is related to conventional businesses for offices. In particular, we will place more emphasis on new businesses, including managed document services, IT services, projection systems and video conference systems. By combining existing products and services with those that are new, we are able to place higher value on the products and/or services we offer to our customers. To accomplish this, we fully employ our advantage—the strong relationship we have built with our customers.
In the expanding markets of emerging countries, we see expectations for product functions and services that are different from those we see in developed markets. For these markets, we first identify the local functions and prices that are expected and reflect these into our products, starting at the design stage. We also prepare locally workable sales systems to expand our business.

Major initiatives for business creation and integration

Establishment of highly effective management

We will reconstruct our corporate systems in order to build an organization that can maintain accelerated business growth while properly responding to any changes in the business environment. We are removing duplicate functions among our divisions and are reviewing our allocation of human resources. We are also conducting a full analysis of all business activities, and advancing structural reform. To this end, we work on streamlining sales structures and processes, revitalizing non-profitable businesses, integrating and eliminating production sites, promoting centralization of purchase functions globally, and examining methods of product development.

Major initiatives for restructuring

The Ricoh Group will put these basic strategies into practice to rebuild a business structure that will support further growth of the Group. Exercising our creativity to design a future, we will keep working on building innovation that will exceed the expectations of our customers.
In the term ending in March 2014, the last year in the 17th MTP, as a reflection of the implementation of these measures, our business performance should be able to return to the level seen before the world financial crisis. We will then be on a new track for success and growth.

17th MTP final year targets(fiscal year ending March 2014)
Net sales 2,100.0 billion yen or higher
Operating income 150.0 billion yen or higher
Operating margin 7.1% or higher
ROE 10.0% or higher
FCF 100.0 billion yen or higher
Total retum ratio
(Dividends and treasury stocks)
Approximately 30%
Exchange rate US$=¥75.00、euro=¥105.00
Performance trend(15th-17th MTP)

Performance trend(15th-17th MTP)

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