| Isao Uchida was appointed Yokogawa's Chief Executive Officer on June 26, 1999. Taking advantage of the opportunity presented by this change in the company's top management position, Mr. Uchida announced in January of the following year his VISION-21 and ACTION-21 corporate strategy for revitalizing Yokogawa.
Outline of the VISION-21 and ACTION-21 Corporate Strategy
The two components of this corporate strategy are VISION-21 and ACTION-21. VISION-21, referred to hereafter as V-21, sets out the overall direction that the Yokogawa Group will take, while ACTION-21, or A-21, defines how this will be achieved. Specifically, A-21 sets out how the Group's business structure will change and states quantitative targets for consolidated sales, operating profit, ROS, and ROA that are to be achieved by fiscal year 2005.
V-21 Corporate Vision
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The Yokogawa Group will work together with its customers in the industrial, public sector, and individual consumer domains to create systems that add value and contribute toward the realization of a thriving global society. In order to achieve those objectives, the group will strive to improve its management practices and focus on providing customers solutions that help them run their businesses more efficiently.
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The Yokogawa Group will structure its business to achieve profitability and maximize the return to its shareholders.
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Each member of the Yokogawa Group will take individual responsibility for maximizing his or her contributions to the organization so that the Yokogawa Group is better able to add value in its solutions for clients.
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All employees of the Yokogawa Group will unite around a shared set of core values and move forward with the goals of creating the framework for a prosperous society. |
A-21 Strategy
A-21 is divided into two strategies, the first being concerned with business reform and the second with group management revitalization. The business reform strategy sets quantitative goals for fiscal 2005 that are to be realized by capitalizing on the Yokogawa Group’s strengths, focusing on the most promising industries, and growing new businesses.
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Transformation into a company that provides solutions |
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As the conditions of doing business become ever more competitive, the need grows for companies to improve efficiencies, implement leaner organizations, and cut costs. An important tool to executives of our client companies is the capability to manage in real-time the entire range of a company's operations -- from planning to procurement, production, sales, and service.
We are transforming our business from the simple provision of hardware to being a provider of solutions such as the above that will enable enterprises to run more efficiently. This is the essence of our Enterprise Technology Solutions (ETS) concept, which was first announced in October 1997 and focuses Yokogawa on providing its customers with solutions to specific needs that make use of the best and most advanced technologies.
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Capitalizing on our strengths |
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We will move into promising new markets by capitalizing on Yokogawa's following strengths: |
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Global network
Yokogawa has established a presence in all key markets with its global sales, engineering, and service network |
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Superior production
Our manufacturing processes ensure the highest quality, both for small-lot, high variety production and high-volume production. |
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Innovative technology
We offer unique test and measurement, industrial automation and control, and information technologies and are able to integrate these for an optimal solution. |
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Financial strength
We have a healthy balance sheet with a high equity ratio. |
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Enhancing the profitability of our existing businesses |
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We will make our Group's existing businesses more profitable through reforms at the organization and product levels that will increase efficiency.
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Developing growth-phase businesses and promoting new-era businesses: |
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We have defined the following businesses as being in the growth phase and will change our business composition and structure by moving people into these areas: |
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Advanced information and communication networking |
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Advanced production support |
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New social infrastructure |
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New biotechnology and life science businesses |
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Group Management Revitalization
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We intend to enhance our consolidated management practices and grow the Yokogawa Group overall. We will establish a new business model that enhances the Group's organizations, infrastructure, and systems, thereby maximizing consolidated profit and improving quality management. |
Quantitative Goals for Fiscal Year 2005
By accomplishing the aims of the V-21 and A-21 strategy, the Yokogawa Group intends to attain specific quantitative goals by fiscal 2005. Our basic policy in this is that of emphasizing the bottom line, i.e. placing the priority on profits, not on sales. Our targets for turnover and operating income are as follows:
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Fiscal 2005 Target |
| Consolidated Operating income |
¥50 Billion |
| ROS |
10% |
| Consolidated Sales Turnover |
¥500 Billion |
| ROA |
5% |
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