Sharp, one of the world's leading
TV manufacturers, is now on
mission globetrot, literally. The Japanese consumer electronics
manufacturer is looking to shift part of its production base from its home
market to overseas so as to cater better to local consumers and bring down costs
and bring in local flavor in design and other attributes. The move comes after
the company reported its first ever loss since 1950, as consumers, hit hard
by the global economic slump, shied away from buying new flat-panel TVs,
LCDs and other electronic gadgets. It also registered lower sales to other TV
manufacturers; Sharp is a major supplier of main panel components to other
TV manufacturers, globally. A stronger yen does not help its cause either. In
contrast, rivals, especially LG and Samsung, gained at its cost,
helped partly by a weaker won.
Saddled with mounting inventories of unsold products, the company,
taking a leaf out of the success book of compatriot automakers, is all set to
embrace their time-tested model of `chisan-chishou'—local production for local
consumption. The model has allowed the automakers like Toyota and Honda
to avoid import duties and shield them from exchange rate volatility. This is
in contrast with its strategy so far of keeping manufacturing facilities only in
Japan, so as to stay near to its key suppliers and also design engineers. As
per the new plan, the company will be entering into manufacturing alliances
across continents, which have markets of high consumption capacities. To
achieve that, it has zeroed in on China, Southeast Asia, Europe and North
America, where it will manufacture large specialized sheets of glass that are used
in flat-screen LCD TVs. The move will mean that Sharp shifts focus away
from Osaka (its production hub in Japan) to promoting its in-house
state-of-the-art production systems across the
continents. "Our core technology isn't making LCD panels, and it isn't making
LCD TVs. It's production technology," said Mikio Katayama, President,
Sharp Corporation.
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