| Toshiba Announces Major Renovation of Personal Computer Business
16 September, 2003
core competence and regain cost competitiveness
TOKYO -- Toshiba Corporation today announced that it would reshape its portable personal computer business and implement a series of strategic measures designed to restore the business to profitability. The wide-ranging program revealed today covers all aspects of the company's PC business, including enhanced product development, reorganization of manufacturing and supply, intensive cost reduction measures, and a sharper focus on sales and marketing through structural innovation. Toshiba will take rapid steps towards full implementation of the program and expects to achieve an early turnaround in results.
Toshiba has long been a world leader and technical innovator in the market for portable PCs. However, consolidated results for April to June 2003, the first quarter of fiscal year 2003, saw the business record a loss. This result reflects overemphasis on a wide product line-up, the impact of price erosion, a shift in market demand from large-sized businesses to home-use and small-to-medium-sized businesses, and the need for structural reforms.
Toshiba has met diversifying demand from different markets by producing an increasingly wide range of platforms and an increasingly wide range of motherboards, the main printed circuit board found in every computer. The burden of producing this extended line-up was not confined to development but also influenced procurement, manufacturing, logistics and sales and marketing, producing a dispersion of resources at each step of the business process. In addition, price erosion in the first quarter of fiscal 2003 far exceeded initial expectations, and appropriate countermeasures were not implemented in a timely manner.
Toshiba is now promoting a series of measures that are expected to make an early and effective difference. The company is reorganizing its domestic and overseas sales structures, reducing the number of platforms and motherboards, reviewing product strategy to improve development efficiency, expanding production at its facilities in the Philippines and China, and promoting effective utilization of manufacturing outsourcing. Implementation of these measures is expected to revive market responsiveness and drive the company toward reinforced profitability.
Toshiba has consistently led the portable PC market in advanced products incorporating leading-edge technologies, most recently in video processing, wireless connectivity and storage. Combining this approach with world-leading capabilities in electronic devices established Toshiba as the pioneering brand in the portable PC market, a global presence supported by a highly experienced sales and marketing operation. With the emerging age of ubiquitous networks and computing, in which portable PCs are expected to be a key product, Toshiba is readying itself for further growth, and has reaffirmed its basic strategy of introducing advanced strategic products offering technological innovations that create new markets.
Outline of measures
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