Victor Company of Japan, Limited (“JVC”) and Kenwood Corporation (“KENWOOD”) established a joint holding company, JVC KENWOOD Holdings, Inc. (“JVC KENWOOD HD”) on October 1, 2008, and carried out a management integration. With an 81-year history, JVC is a video and audio equipment manufacturer that also has an entertainment business centered on music software, and KENWOOD is an audio and wireless equipment maker with a 62-year history. Through the management integration of these two historic companies, a unique specialty manufacturer with video technologies, audio technologies, wireless technologies, and entertainment business is born in Japan.
The purpose of the management integration is to build an existing base of a complex company to survive the digital era through the integration of the management resources of the two companies, and to realize new growth by synergies through not only expanding our corporate value but also by creating new added-value.
And this idea is simply expressed in the JVC KENWOOD Group vision, “Realize the unconventional (Katayaburi wo katachi ni).” This concept is held in common in JVC’s Brand Statement, “The Perfect Experience,” and in KENWOOD’s Corporate Vision, “Reaching out to discover, inspire and enhance the enjoyment of life,” and through the sharing and realization of this idea by all of the employees of JVC KENWOOD Group, we will evolve into a corporate group that provides customers with wonder, inspiration and services such that they have never before experienced.
In many cases the business results of companies remain stagnant as the industry becomes mature. However, mature industries have great fundamental attractions, such as the pre-existence of a large, stable market, and the accumulation of resources including technologies,facilities, sales networks, and brand presence.
Although KENWOOD had excess liabilities in fiscal 2001, in order to capitalize on these mature industry attractions and achieve rebuilding of management, KENWOOD has worked on “four structural reforms” of financial affairs, business, cost and management since July 2002. As a result, KENWOOD posted record-high net income in fiscal 2002, and thereafter achieved the overall completion of the reform of its financial infrastructure and capital structure and the resumption of dividends, completing the series of structural reforms. In addition, to overcome the limitations of its own capability to achieving strategic growth, KENWOOD worked toward structural reforms of the industry including forging strategic alliances and M&A, such as making Zetron Inc., a U.S. systems-based communications company, a subsidiary in May 2007, or providing financing to JVC in August of the same year.
Meanwhile, as for JVC, since it recorded a net loss for three straight fiscal terms since the term ended March 2005, it has put Action Plan 2007 into practice since April 2007, and has reinforced the consumer equipment business, entertainment business, and industrial equipment business as core businesses, and meanwhile has worked toward drastic reforms, such as business and employment structure reforms, including transfer and withdrawing from non-core businesses. As a result, JVC achieved the return of operating income to the black in fiscal 2007. Moreover, in the first half of fiscal 2008, JVC initiated a drastic business reform of its display business and audio business, which had been the biggest problem, and a final conclusion is projected for the series of structural reforms.
Thus, both companies have finished their respective structural reforms, and moved to the next stage of aiming at a new growth strategy through management integration.
JVC KENWOOD Group reorganized the businesses in which the two companies have been engaged up to now into four individual business segments, the “Car Electronics business,” “Home & Mobile Electronics business,” “Professional Systems business,” and “Entertainment business” and will promote the “Genre Top Strategy” in the global market.
The Genre Top Strategy is a strategy to display strength in each business field or genre in which it engages and to aim at being in the global top group. For example, the Car Electronics business will be the genre with the largest scale of sales as a result of integration, and because of this, the greatest impact from integration is predicted, and in its primary product, the consumer car audio, JVC KENWOOD Group will be a global leader. Moreover, video cameras (camcorders), which is one of the genres that makes up the Home and MobileElectronics business and land mobile radio equipment, which makes up the Professional Systems business, have global top group presence. We will heighten our business competitiveness and presence in the market of these primary genres even further through the effects of integration, and aim at being a corporate group with a solid earnings structure that lead the world in multiple genres.
Moreover, JVC KENWOOD Group will integrate video, audio and wireless communications technologies at a high level, and make efforts toward development of “unconventional” products and services appropriate to the digital network era, making use of the vast resources that both companies have been cultivating over long periods. By these “unconventional” and unique ideas, we will send out to the world products and services that stimulate the sensitivities of people and awaken latent needs, and also bring surprises and change to everyday lifestyles and create new corporate-value.
JVC KENWOOD Group considers that the mission of a corporation is to respond to the expectations of all stakeholders, to be trusted by society and to contribute to society, and these things are also requisites for a company to achieve continuous development in society. For this purpose, in addition to seeking compliance in all our activities as a matter of course, we believe that working toward adequate corporate governance, promoting highly-transparent management, and also contributing to society through business activities while enhancing efforts toward environmental preservation for the next generation are our most important tasks.
In our business activities in particular, since our video and audio equipment business and Entertainment business support a part of cultural activities to foster people’s sensibilities, and our wireless business supports a part of communication activities to convey necessary information to people, following our course of action in “perpetual reform centered on each and every individual,” all employees of the Group will fulfill this heavy responsibility as a united group.
JVC KENWOOD Group has just taken the first step as a new corporate group, while passing on the DNA of both JVC and KENWOOD. Please count on us.
We will keep taking steps together with you, and we sincerely request your continued understanding and support.
