CEO Yoshinori Yama****a will have to reel in the company's 'lifeline'
MANAMI OGAWA, Nikkei staff writer
Yoshinori Yama****a,CEO of Ricoh, briefing on medium-term management plan in April.
TOKYO -- Ricoh is facing its biggest crisis ever. So President and CEO Yoshinori Yama****a has decided to "Break with Past Management," as his slogan says.
Ricoh is staring at huge losses as the market for multifunctional printers, Ricoh's cash cow, evaporates and its global sales network racks up high costs.
Yama****a, who took the helm in April, is respected in-house for his management ability, but whether he can keep the renowned office equipment maker profitable is another question entirely.
Yama****a in the middle of April began visiting Ricoh's sales outlets in Japan, the U.S. and Europe, urging senior officials to pursue profits instead of more market share.
At one meeting after another, Yama****a was asked the same question: "Is it really OK to pass on deals that do not generate profit?"
His answer was the same every time: "Yes, it is."
The new policy is to rid Ricoh of its emphasis on market share above all else. This is a gamble, perhaps more so considering that gunning for market share is in Ricoh's DNA. The company will have to make a 180-degree pivot, even though doing so could further dampen sales teams' morale and further erode earnings.
Yama****a two months ago briefed reporters on Ricoh's medium-term management plan "We will incur a loss of tens of billions of yen three years from now if nothing is done," he said. "People around me warn that our survival will then be questioned."
Multifunctional printer dependence
The Imaging and Solutions division, which primarily handles multifunctional printers, contributes 90% of Ricoh's consolidated sales. For the fiscal year that ended in March, the division's profit plunged, lowering Ricoh's operating profit to sales ratio to 4.6%. This is less than half the ratio at Canon, which suffered a setback in the same segment.