Manufacturer Raising Industrial Device Production While Reducing Ratio of Office Printers
Toru Hatano, president of OKI Data (OKI’s Printer Business Company), recently revealed the status of the company’s “Mid Term Management Plan 2019,” part of a three-year plan for its printer business, which was originally announced during OKI Data’s 2017 fiscal year (FY).
The biggest initiative of the company’s printer business strategy is a shift to industrial printing. OKI Data is looking to increase sales within its industrial printing business from 26% today to 40% by FY 2020. The company’s business strategy of increasing operating profit without pursuing sales continues. However, because the weight of fixed expenses will increase, placing pressure on operating profit when sales fall short of 100 billion yen, the company has revised its policy to aim to increase sales again in FY 2019, matching or exceeding the sales of 105 billion yen from FY 2018.
“In the printer industry, the transition to paperless has long since begun, and we need to deal with it,” said Hatano. “Because our competitors are five to ten times larger than us, if we continue with the same strategies as in the past, we cannot win.”
As the industry changes in accordance with and to accommodate the trend of printing less within the office, Hatano reported OKI Data is leveraging its Mid Term Plan to capitalize on its strengths and maintain a certain level of market share within the print industry.
OKI Data’s strategy is to raise the proportion of industrial printers it is producing, while lowering the ratio of office printers it produces, which currently accounts for 76% of its printer business. Its industrial printers, which also include office printers and wide-format printers for signage and wallpaper, and multifunction devices for design drawings will target vertical industries and be designed to handle specialized applications. The primary vertical markets for these special-purpose machines include industries such as healthcare and distribution. For example, in the U.S., a national drugstore chain is using OKI Data printers as an on-demand printer, enabling customers to create personalized Christmas cards and other materials in its U.S. locations. Meanwhile, in Japan, the number of printers integrated with electronic medical record systems has doubled in recent years, while in Europe, the use of OKI Data printers in the fashion industry has been growing.
“Although consumable usage has been decreasing in the office space [as people print less], print volumes for industrial operations are growing,” maintained Hatano. “Looking at the vertical markets that use large amounts of consumables and further the business operations for which our LED printer can be used, in a trial calculation, [resellers] can increase their profit margin by 5% in a few years. This is quite significant. On the other hand, as printing in the office declines at an even higher rate, it will be thoroughly streamlined.”
According to Hatano, OKI Data is planning to streamline its business model as well.
“While the conventional business model for special machines and large-format printers is to make profits with consumables, while losing money on the hardware, OKI Data aims to make profits with our hardware by delivering distinctive printers,” he said.
Those “distinctive” printers include label printers, ticket printers, and T-shirt printers. Referencing results from surveys in France, Germany, and the U.K., Hatano identified healthcare, social welfare, financial and insurance, wholesale, and retail verticals as markets with a large MIF and large consumables usage attached to that MIF.
“These are the target markets for OKI Data,” concluded Hatano. “We want to offer products for specialized needs by cooperating with system integrators.”
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