Annual dealer meeting emphasized the importance of change, branding, and color.
(Pictured above: Oscar Sanchez, president & CEO of Kyocera Document Solutions America, addresses the dealer audience.)
Kyocera Document Solutions America held its annual dealer meeting April 16-18 in Las Vegas at the MGM Grand.
As the meeting took place shortly after the end of the company’s fourth quarter (March 31, 2019), final figures were not yet available for Kyocera Document Solutions Inc.’s financial performance for the previous year. Instead, we use as a basis for evaluation Kyocera’s Consolidated Financial Results for the nine months ended December 31, 2018 (IFRS) February 1, 2019. Converting yen to dollars at the rate of 113 you can reasonably state that the company generated $11 billion in revenues, and then estimate conservatively, that the last quarter was $4 billion. This results in a figure of $15 billion. That is only an estimate and the number could easily be higher.
Of that total, 24% was from document solutions. Norihiko Ina, president of Kyocera Document Solutions Inc., delivered the company’s financial results, indicating that he expected strong growth in FY19. His optimism comes from the underperformance in color throughout the Americas during the previous year, a segment where Ina sees opportunities for improvement. Last year, 62% of Kyocera placements in the Americas were in color as compared to 82% in Western Europe and 86% in Japan.
Ina is optimistic that Kyocera can increase its revenue simply by increasing color placements. He cited the investment the company is making in automating its factories, including a new fully automated toner plant in Japan.
The inkjet TASKalfa Pro 15000c, which debuted at last year’s dealer meeting and will be released this year, is critical to growing color placements. Machines are on their way to the Americas for beta testing. This is the initial release of what is expected to be a series of color inkjet production print products for North America.
Change is in the Air
The message was clear that with the reduction in print volume comes the awareness that Kyocera needs to change how it goes to market. “Put knowledge to work and accept change to promote growth,” said Ina.
Ina spoke highly of Oscar Sanchez, the new president & CEO of Kyocera Document Solutions America, who was named to that post last August. That is not something you normally hear from the CEO of the parent company. However, Ina was informing dealers that he has a 20-year relationship with Sanchez and had good reason to promote him.
Sanchez spoke eloquently about business in general and the need to make changes. He reported that Kyocera’s revenue in the Americas was up while profit had increased 3X. Cautioning the audience that now is not the time to be complacent, Sanchez reported that of the Fortune 500 companies listed in 1959, 88% are no longer in business.
To effect this change, dealers must become more product-centric as well as customer-centric, suggested Sanchez. This means dealers must listen to their customers and pay attention to what they value most. He used another statistic to make a point, 89% of customers changed their suppliers because of a poor prior experience. Sanchez then encouraged dealers to look at other industries for new personnel, focusing on their skill sets and experience while encouraging them to seek out risk takers that truly believe they can make a difference.
He closed with a message on branding. “How do we want to position ourselves?” which was particularly timely since Kyocera recently has just undergone a rebranding with a new brand platform that reflects the company’s commitment to continuously evolve into a more unified and customer-centric organization.
“I hope I have conveyed to you what we want to do and that is the need to drive the biggest transformation for Kyocera by being open to change,” observed Sanchez.
Summing things up
During a press briefing, Sanchez revealed that Kyocera does not have plans to manufacture inkjet MFPs. Its toner business is much too profitable to do anything to kill it. Ina’s reference to a new fully automated toner plant is evidence of that commitment.
Kyocera is looking towards production print to be a significant part of its future. The 15000c is only the first step. There will be many more coming. Pricing has yet to be announced, but I bet the ranch that the 15000c will be aggressively priced. We will find out just how aggressive later this year.
While the theme of this meeting was “Innovate,” the message throughout centered on change and branding. As we shared with Sanchez, which he did not deny, Kyocera has done a poor job of identifying or branding who they really are.
Sanchez agreed, then pulled out his iPhone and noted that four components of that communication device are made by Kyocera. His point, as an industrial company, Kyocera cannot boast about their technology being employed in other company’s products. More importantly, 76% of Kyocera’s revenue is derived from that segment of the business.
We will have to wait and see if Kyocera is prepared to make the necessary investments to increase consumer awareness of who they are. The same is true of making changes and hiring people from competitive companies. That is expensive and historically Kyocera has demonstrated little appetite for spending in an aggressive manner to achieve its objectives.
Kyocera is in an eight-horse race with Canon, HP, Konica Minolta, Ricoh, Sharp, Toshiba, and the sleeper FujiXerox. Add to that, companies such as Epson and OKI. The former has demonstrated awareness of where the market is going, and the latter has more of a printer footprint than an MFP footprint. In addition, OKI offers little in the way of technology to support any kind of serious competitiveness. All these companies produce MFPs and the market will not support that many vendors much longer.
We all have the same question, “Who will be the first to go?”
To be clear, we are not implying Kyocera would be the first to go even though the crowded MFP landscape presents the company with considerable challenges. In Kyocera’s favor is its strong financial footing, as well as strong leadership in Japan and the U.S. We are still getting to know Oscar Sanchez, but have been impressed with what we’ve seen so far. We already think highly of Danielle Wolowitz, vice president of Kyocera’s Corporate Marketing Group. CJ reports that everywhere he goes, she is the executive everyone is talking about. That was certainly the case while CJ was at ITEX. With the changes Sanchez is making and the company’s focus on bringing on new talent and rebranding, Kyocera appears to be making some positive strides to differentiate itself from the pack.
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