Sharp Corporation

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Richard lvey S(hool of Eusiness
Thc University of Western ODtario



Derck Lehmberg wrcte this case solely to provide material lor class discrssior. ftre author does not intend to illustrcte either effective or ineffective handling ol a managerial situation. The authot may have disguised ceftain nanes and other identifying intornation to protect confidentiality.

Richad lvey Schoo/ of Eusiness Foundation Nohibits any form of reprccluction, storage or trcnsmission withoul ils written pemission. Reqoctuction of this mateial is not covercct uncler aulhoization by any rcprcduction ights oeanization To otdet copies or equest permission to rcptoduce materials, contact lvey Publishing, Rbhard lvey School of Business Founalation, The Universily of Westem Ontaio, London, Ontario, Canada, N6A 3K7: phone (519) 661-3208; tax (519) 661-3882: e-mail Copyright


2011, Rbhad lvey School of Business


Ve6ion: 2011-03-09

Mikio Katayama was the president of Sharp Corporation, a company that in the last l0 years had become recognized as a top-notch competitor in electronics products, leaving behind its inrage as a second-rate player. Sharp could brag about its leading positions in the Japanese cell phone handset and TV set markets as well as its worldwide reputation as a leader in liquid crystal display (LCD) technology. Despite these successes, however, the outlook for Sharp was far from optimistic. In the spring of 2009, Sharp reported ils first loss since 1956, the year its shares began trading on the Tokyo Stock Exchange. At the subsequent annual shareholders' meeting, Katayama apologized for "causing great anxiety and trouble to shareholders," and also announced that the firm's dividend would be cut.' With slowing sales due to the deepest worldwide recession since the 1930s, Sharp's cornpetitors were also facing hard times. However, Sharp's problems went beyond the-curent downturn. Katayama felt Sharp's fundamental way of doing business needed to be reconsidered.'

Sharp Corporation was an electronics company with headquarters in Osaka, Japan. Its business consisted of electronic products and electronic components (see Exhibit l). Electronic products were grouped into three categories: audio-visual and communication equipment, health and environment equipment, and information equipment. Electronic components included LCDs, solar cells, and other electronic devices.

Many ofthese components relied on Sharp's expertise in opto-electronrcs. Sharp's technology strategy focused on synergies between electronic components and the end products Sharp made. End consurner products provided component sales as well as opportunities for Sharp to improve its component-related technologies. Sharp also looked for new market needs lhat it could meet using its component capabilities. It strove to develop and manufaclure "Only-one" products: those that lltts case has been wrilten on lhe bas/s of published sources only. Consequently, the inleryretation and percpeclives prcsenled in this case are not necessaily lhose of Sharp Coryoralion or any of its employees. ' 'Sharp Akajide Kalayama-shachora Chinsha," The Mainichi NewspapeL Tokyo, June 24, 2009 " H. Sagimoi, "Sharp lshin: Sarcba Kameyama Model," Nikkei Business. July 6, 2009, pp. 18-21.



combined Sharp's knowledge and capabilities in ways other firms could not imitate. This approach had at ttt" ttea.t ofSharp's impressive history ofdeveloping unique, groundbreaking products (see Exhibit


Sharp was active in intemational markets, bul had chosen to manufacture ils electronic components exclusively in Japan. often, these components employed cutting-edge technology and required capitalintensive plants to manufacture. Sharp's overseas plants, on the other hand, typically focused on the final assembly of products for local consumption. The Japanese domestic plants had...
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