Innovating for a Better Society:
Kyocera’s Solutions Business Segment
Kyocera has implemented major organizational reforms to consolidate various business lines into three segments. The newly established Solutions Business is seeking market expansion by capitalizing on horizontal and vertical synergies generated among a diverse range of product lines. The Solutions Business Segment Director, Norihiko Ina, told us about his vision, strategy, and concrete actions for the future.
Maximizing on horizontal and vertical synergies
In April 2021, Kyocera completed large-scale organizational reforms, consolidating a vast portfolio of existing businesses into three segments: Core Components, Electronic Components, and Solutions Businesses. The Solutions Business Segment comprises seven product lines – Information Equipment, Telecommunications Equipment, Information Systems and Telecommunications Services, Industrial Tools, Liquid Crystal Displays, Printing Devices, and Smart Energy – which represent the largest of Kyocera’s three segments by annual revenue.
ー The Solutions Business Segment spans a wide range of business areas.
Ina：Yes, it does. This segment has brought together a diverse collection of product lines from around the Kyocera group companies including Kyocera Document Solutions, which develops printers, MFPs, and business software solutions, and Kyocera Communication Systems, which provides systems and telecommunications services. Each product line has its own organizational culture and business model, but I think this diversity is a strength. We will take advantage of synergetic effects wherever possible by applying and combining the strengths and resources of each product line with the others.
ー Could you describe the synergetic effects more specifically?
Ina：We are implementing three key strategies to maximize synergies for business growth. The first is to create horizontal synergy among product lines. We are encouraging the shared use of business models and functions to enhance existing product lines. One example is the Telecommunications Equipment division, which has established a domestic market strategy based on the concept of “JAPAN MADE” production. The division is building a business model that incorporates all processes domestically – planning, designing, manufacturing, sales, and post-sales support – to achieve differentiation based on high-value-added solutions and quality unique to Japan. Growth strategies for the Information Equipment division have been formulated based on the concept “Put knowledge to work,” which is the brand promise to support customers processing information into useful knowledge. We are looking to apply this business model with other product lines to boost synergies. We are also facilitating the use of shared methods and functions for development, manufacturing, marketing, and sales. For example, one major plan under discussion is introducing advanced agile development to enable faster development of new solutions. This would replace the traditional waterfall development model that has been used by some lines. Others on the table are implementing shared digital marketing platforms and remote service systems applicable to the other lines across the segment.
The second strategy is to offer new solutions by combining the businesses of existing product lines. One such leading project is the development of digital textile printing machinery for the apparel industry, which was achieved by combining technologies from the Printing Devices and Information Equipment product lines. This project is designed to offer a solution to problems faced by the fashion industry, mainly that conventional machinery consumes a huge amount of water in the textile printing process and with correspondingly high environmental costs. It can also help solve the issue of long lead times for processing at dye houses that often result in overstocking and clothing waste. In this project, the head and ink technologies were combined from two product lines to create a compact pigment inkjet machine to overcome the above issues. We will promote more collaborative projects taking advantage of horizontal synergetic effects, with the aim of offering solutions to some of the most critical challenges facing society while also creating new markets.
The last strategy is developing new businesses by drawing on vertical synergetic effects generated through collaboration with the Kyocera Group’s marketing and R&D divisions, while pursuing horizontal synergy within the segment. To generate vertical synergies, we are pursuing two approaches, specifically the marketing approach to develop the energy and mobility markets, and the technical approach to engage in R&D for next-generation telecommunications and other systems. We are examining combinations of these activities to create new innovations. One relevant project in progress is the development of Kyocera’s AI-enabled autonomous collaborative robotic system to be applied to various manufacturing processes.
Aiming to create as much happiness as possible
ー What do you think is essential to creating effective synergies between divisions?
Ina：First and foremost, we need to invigorate productive communication between divisions. To this end, we are preparing internal networks and systems to encourage cross-divisional interactions. At the same time, it is important to build good interpersonal relationships within an organization, particularly in the manufacturing and R&D divisions. I myself have engaged in on-site operations over the years, working to offer solutions to various customer issues by combining internal resources. I believe I can utilize this experience to implement growth strategies for the new segment.
ー Would you describe the vision of the Solutions Business Segment?
Ina：Our vision is to “create as much happiness as possible and build a better society.” By implementing the above-described three key actions and encouraging out-of-the-box thinking, we will endeavor to provide new solutions to challenges faced by society and our customers. Also, to ensure sustainable development, we must go beyond focusing only on profitability. We should also value contributing to overcoming common issues faced by society and building a better world. This is something we will prioritize in the Solutions Business Segment. Contribution to society through work can become a strong source of motivation. As such, one of my important responsibilities as a business leader is to help each individual employee achieve a sense of fulfillment in this regard.