Activity 2. Sharp: From Technology to Market–First



Following is an article on the Japanese high-tech company, Sharp. Articles like this present background information on business successes and failures so readers can make informed investment decisions. They appear in magazines and periodicals such as Fortune, Barrons, Business Week, Wall Street Journal, etc. This article, from the March 23, 1992 issue of Fortune, explains how Sharp’s stock stayed high in the early 90s despite the consumer electronics recession.

 

Before reading, discuss these questions with your group:

1. What do you know about Sharp? What are the best known products?

2. How is the company doing right now?

 

SHARP: FROM TECHNOLOGY TO MARKET–FIRST

by Sally Soto

The world according to Sharp: Master a technology; mould it into products so useful that even the most gadget-averse consumers can't resist; repeat.

The Japanese consumer electronics maverick is the world's largest supplier of liquid crystal displays, which first illuminated calculators and are now lighting up sales of electronic organizers, the gizmos that store phone numbers, appointments, memos, you name it. Sharp plans to use the technology to hang a flat TV on your wall and put a computer in your pocket.

Less than a quarter the size of its Osaka neighbour Matsushita, and not half as big as glamorous compatriot Sony, Sharp has forged a path all its own. The secret? Sharp is, well, sharp at keeping one eye on research, the other on the ever-changing consumer. The reward? In the fiscal year that ends March 31, Boris Petersik, analyst at Barclays de Zoete Wedd in Tokyo, figures that operating income will fall only 10% - not bad in a consumer electronics recession when rivals' profits will drop further or disappear.

Although RCA was experimenting in the 1960s with LCDs, made by sealing liquid crystal between sheets of glass, Sharp designed one into a calculator in 1973. The company has since put the screens on portable computers, mini-colour TVs, projectors, and more. It claimed a 38% share of the $2.1 billion world market for LCDs in 1991, a business expected to hit $7.1 billion in 1995.

The Wizard, a 10-ounce, 7-by-3.7- inch organizer based on displays and semiconductors developed for Sharp calculators, began as a product of the Personal Home/Office Electronics: Division, fondly called "Phoo-ey." Says Gil DeLiso, now head of the division that markets it in the U.S: "We saw that lifestyles were becoming busier. People had more information to manage." The gadget, aimed at business travelers, was introduced in 1988.

Bingo. Sales approached $400 million last year. Says Richard Shaffer, editor of Computer Letter: "Sharp essentially created a market that others dismissed as toys. Computer makers think everything is an office machine. The big payoff comes in finding a machine for people who say no to the question 'Do you need a computer?'" A dedicated sales force is trying to get companies to say yes to WIZards with software customized for their travelling salesmen and such. Among the takers: Prudential Property & Casualty Insurance and PepsiCo.

Sharp's keen take on U.S. consumers has made it No.1 in fax machines and microwaves. In the mid-1980s it foresaw a big reception for faxing when competitors saw only a niche for what were exotic, expensive devices. Sharp scaled down a model to fit standard 8½ -by-11-inch American paper. Japanese paper is larger. It lowered the price below $2,000, and the boom on rivals. Sales quadrupled in 1987 to 100,000 units and have more than tripled since. In microwaves, Sharp was first with a sensor for popcorn popping.

The company's American surge came largely under Toshikazu Mitsuda, 56, until recently chairman of the $2.2- billion-a-year U.S. subsidiary. Mitsuda, now head of European operations, hit the road often, making unannounced calls on dealers: "I saw how they treated customers. I got their honest feelings about Sharp. Chocolate never helps. Bitter medicine does."

Sharp's next breakthrough product could be wall-hanging TVs. The latest is 8.6 inches diagonally and costs about $4,800. But the company's three-year, $714 million investment in LCD research aims to make the devices bigger and cheaper. Robert Garbutt, head of the LCD division in the U.S., notes that in the past year the clarity of an LCD picture closed in on that of today's standard, bulkier cathode ray tubes.

Sharp is also about to apply itself to a new technology called "flash" semiconductors. In February it signed an agreement with Intel to develop and manufacture the reprogrammable chips, which retain information stored in them even when the power is turned off. The company believes flash chips will boost development of smaller and more powerful portable computers, say, Wizard-size ones. Says Richard Pashley, general manager of Intel's memory components division: "We're expecting the flash market to explode" – to $2 billion in 1995, from $130 million last year. Sharp, he predicts, will lead the push into consumer applications.

RCA  Radio Corporation of America – Ар-Си-Эй (фірмова назва грамплатівок, програвачів і т.н.)

LCD Liquid Crystal Display – рідкокристалічний індикатор

 

Exercise 1.   With your group, answer the following questions about the passage you just read.

1. What technology is Sharp best known for? What percent of the world market share does Sharp have for products incorporating this technology?

2. What gadget created by Sharp increased that company's profits and helped them avoid the high-tech slump?

3. What two other very successful product lines has Sharp been heavily involved in?

4. List the two products Sharp intends to come out with in the near future.

5. Come to a consensus opinion – a group decision – regarding Sharp's formula for success. Write your team's opinion on a sheet of paper.

6. This article was written in the spring of 1992. How is Sharp doing today? With your group, do research to complete the following grid with current facts about Sharp. Get the information, using one or more of the following:

· Ask a partner.

· Look in today's paper. (Sharp is on the Tokyo stock exchange – look for "Foreign Markets.")

· Go to the business section of your university or community library and look for articles on Sharp in current business publications.

· Find necessary information in the Internet.

 

SHARP
New products currently on the market:
Plans for future products:
Current stock policy:
Other facts about the company:

 

Exercise 2.       Rewrite the following statements taken from the article. Replace the underlined expressions with the journalistic jargon equivalents from the list:


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