Dec 11, 2015
I have just returned from the Sharp National Dealer Show held at the JW Marriott San Antonio Hill Country Resort & Spa in San Antonio, Texas. Quite frankly I could do a positive write up on the event based on that fact alone just because I love Texas! But I’ll keep it professional and focus on the host (Sharp) and their event content but first let’s get some housekeeping items out of the way before I do a deep dive on the most exciting facets of the event.
Unless you have been living on the moon, you know that Sharp has struggled financially. In May, they unveiled an annual loss of $1.9bn. However, my prediction is that Sharp will never die and they will continue to evolve and adapt. This is not to understate the issues they face, only to emphasize the fact that Sharp, like many companies that have confronted this class of challenges before them will most certainly evolve and adapt. Executive Managing Officer of Sharp Corporation and President of Business Solutions, Mr Kazushi Mukai stated in the General Session to open the event, “As you have read in the news, Sharp is struggling through the restructuring process of transforming from its legacy categories which have been accumulated throughout history. However, while it has taken a lot of time, we are basically through that change.” So, let me make the statement again, they (Sharp) will continue to exit certain businesses; they will most certainly evolve and adapt to the changing industry landscape, but Sharp. Will. Never. Die.
The message throughout the event was on Sharp’s commitment to B2B business, not consumer expansion. Doug Albregts, President – Sharp Imaging and Information Company of America, stated “The B2B world is about relationships and we will work hard to expand your opportunities in this market” and have positioned Sharp for growth through B2B with a number of tactics:
- Simplifying Programs
- Improving Delivery Times
- Working Capital
- Tech Data
How has this strategy and execution started to pay off? Sharp had their 6th straight fiscal of revenue growth for SIICA despite exiting non-core businesses. In spite of all the challenges, MFP revenues also grew 6.5% over the prior period and the profit story is equally impressive. Last fiscal, the Sharp US Document Business was one of the most profitable in their history. SIICA grew its operating profit by 145% vs. the prior fiscal period. That is a foundation of results they can continue to build on.
The Sharp team was very excited and enthusiastic about this meeting, and rightly so, as it kicked off the strategy that Doug Albregts and his team had carefully been building over the last 2 years and of course, they also had some new print devices to launch. New products from workgroup color to high speed mono…I want to be brutally honest here, I am NOT a widget guy. The widget is the least fascinating piece of our industry to me, even back to the time when I was selling said widgets down the street in my first job at Xerox. I am more from the business vein of building solid relationships with my clients and solving business problems, the widget is just a mechanism to help accomplish that (I can hear the collective whining from the industry “Gear Heads” as I write this piece, get over it Gear Heads). Are we clear on my feelings about this? Because it’s really important as to what I am about to write next, which is something I have never ever once said or written, ever. One of the most exciting moments during the event, if not the most exciting moment was the launch of 10 new clean sheet design A3 product line in the 30 – 60 PPM range (click the link and read all about it). All models will use the same engine, accessories and most importantly common parts and supplies, making this one of the easiest product lines for service operations to support.
Did you read that last part? This is how exciting it was for the participants, just so I paint you a clear picture. When Shane Coffey, Senior Director, Product Management at Sharp Electronics, presented the new product line up, Dealer Principals, Sales and Services leaders, all in the audience literally shouted with enthusiasm and everyone in the audience was vigorously applauding…over a widget launch people, a widget launch!
Now here is why the announcement was met with such enthusiasm by Sharp constituents. Almost 70% of operating income contribution in the dealer business model (most commonly and affectionately referred to as the Tom Johnson model) is derived from service operations. So when you create a product platform that locks in the same cost structure for the 30ppm device that you will receive on the 60ppm device and all speeds in between, and reduce parts and supply expense and oh by the way, reduce “Car Stock” for technicians, you immediately drive; improved cash flow for your dealers, improved operational efficiency for your dealers, and improved profitability for your dealers. One of the number one complaints I hear from dealer principals and service leaders is that of their manufacturers developing too many models with no commonality from one product to the next and increasing the difficulty for the dealer to manage the service component of their business.
Dealer principals and service leaders repeatedly state their challenges when it comes to service efficiencies coming in variations of the following:
- Predictability of service events
- Risk of bad products
- Parts and supply stocking and ordering
- Financial risks due to improper inventory management
- Parts car stocking and deployment
- Territory structure at the technician level
- Hitting service productivity benchmarks
The new product line up was designed based off Dealer feedback and will certainly have a positive impact for all of the Sharp partners. Sharp’s product fair showcase was also excellent and one of the best I’ve seen in a long time, with over 60 partners showcased such as YSoft, DocuWare, MWAi Forza, Print Audit, the Business Technology Association and many more.
Sharp has made significant improvements in its restructuring, they continue to invest in the office technology space, they have further expanded their partner network, and, most importantly, they are highly committed to the office equipment dealer channel with the right programs and product design to improve dealer profitability and operations. With a strategy like this Sharp, will never die!”