Panasonic reorganizes business fields, places more focus on energy-related biz

Kyodo

Japan’s major electronics maker Panasonic Corp. launched its new group structure Sunday, reorganizing its business fields and two wholly owned units into three main groups as it places greater emphasis on energy-related businesses.

Panasonic’s business fields are now divided into three groups — consumer, components and devices, and solutions — after it restructured five business segments that included operations of the two subsidiaries, Sanyo Electric Co. and Panasonic Electric Works Co.

The 16 business divisions were consolidated into nine divisions including appliances, energy and healthcare under the three business fields. The company is also proceeding with a reduction in the group’s workforce, aiming to reduce the number to less than 350,000 by the end of the current fiscal year in March from around 360,000 employees as of Sept. 30.

The move is aimed at expanding Panasonic’s energy-solutions business by selling energy-saving products such as solar batteries and LED lighting as a package to owners of homes, retail shops and buildings, an operation that the company is trying to establish as one of the pillars of its group amid the slumping television business.

The brand names Sanyo and Panasonic Electric will be terminated in principle.

By building on the strengths of Sanyo’s energy business and Panasonic Electric’s housing-equipment operations, the company aims to grow its “comprehensive solutions” business into a 1 trillion yen revenue source in fiscal 2018, according to Panasonic.

Panasonic, known for its Viera brand TVs, is struggling to make its mainstay TV business profitable. It announced in October that it is anticipating a huge group net loss of 420 billion yen for this fiscal year due to costs related to restructuring the money-losing business.

“There are multiple factors behind restructuring such as the strong yen and falling prices” of flat-panel TVs, President Fumio Otsubo told a news conference in October. “As a result, we have more facilities than we need.”

To revitalize its consumer electronics business, the company has adopted a marketing strategy of targeting specific customer segments for its household white goods including rice cookers and cosmetic appliances such as curling irons.

For example, its compact washing machine targeted at households of small families saw bigger-than-expected sales following its launch in April, said Yukio Nakashima, executive officer in charge of marketing.

“We had been targeting unspecified customers previously, believing that the products would sell well if they were good,” Nakashima said. “We can create demand if we specify to whom we’d like to sell.”

Regarding its comprehensive solutions business, Panasonic is aiming to deliver a combination of energy-saving equipment such as rechargeable batteries in single packages to houses and stores as well as to provide maintenance and inspection for the equipment.

“It is a business to offer solutions to the problems customers have,” Panasonic Senior Managing Executive Officer Shusaku Nagae said in an interview with Kyodo News. “By providing maintenance and consulting, we will create a new business model,” he said.

For example, the business will enable households to generate electricity with sunlight and sell surplus electricity and store cheaper electricity supplied at night in rechargeable batteries for use during the daytime, said Nagae, who served as president of Panasonic Electric through December.

It will also help commercial facilities make considerable energy savings by centrally controlling air conditioning and lighting installed by the company, Nagae added.

“Many of our businesses had dealt in single-product sales. In the future, we need to find ways to offer our customers (products) as part of systems,” he said.

To further expand the packaged solution business, Panasonic is considering buying overseas companies that deal in household equipment in a bid to increase its marketing channels in markets such as the United States and Europe, he said.