Fujitsu's Role in an Ever-changing International Society
September 27 (Wednesday) 2006
On September 22, I had the opportunity to engage in discussion with new Fujitsu board members at Fujitsu's Numazu/Fuji Forum. The theme of the discussion was, "Fujitsu's appropriate response in an ever-changing international society", and I would like to highlight some valuable points that were raised.
I initiated discussion on the following issues.
1. For large corporations like Fujitsu, room for future growth will almost entirely be limited to overseas markets.
The Japanese economy has already entered a phase of long-term population decline; while a degree of improvement in productivity can be expected, large-scale market expansion in the Japanese economy as a whole is implausible. In fact, contraction is not out of the question. In such a situation, growth becomes indispensable for companies to survive, and to produce such growth large corporations like Fujitsu inevitably have no choice but to look to overseas markets. In this way, it is meaningless for Fujitsu to distinguish between domestic and international strategies, as global strategies alone are the key to future survival.
2. Concerning the global development of both domestic and international leading corporations.
Major Japanese corporations, as well leading corporations in industrialized countries, are in similar positions and both show a dramatic increase in the rate of overseas activity in recent years. For example, the overseas percentage of overall external sales for Toyota Motors stands at 63.2%, while the overseas percentage of overall regional sales for Asahi Glass comes to 43.9%. The figure is 46.7% for Toshiba and reaches 80.3% for Samsung (Korea). The foundation of overseas strategies for manufacturing companies is QPD (quality, price and delivery). As long as QPD is superior, a company can boast international competitiveness and gain a foothold in the global market. It is imperative for a corporation like Fujitsu, where solutions-providing is the backbone of business, to develop strategies that can overcome the QPD of manufacturing companies.
Oftentimes systems and solutions are interconnected with social frameworks, government policies and corporate strategies; as such, when it comes to systemic reforms, policy formation and strategy development, companies like Fujitsu must quickly secure a strong foothold and place themselves in a position to provide ideas.
Securing such a position for companies entering from abroad is not easy, and in practice it is advisable to begin by forming strategic alliances with local companies or people with established networks and know-how. ICL (England) is such a company. Fujitsu acquired capital of IUC and made it a subsidiary and in doing so succeeded in securing government-affiliated business orders, and it is important to continue the flexible pursuit of this strategy in other countries around the world.
3. Personnel in charge of promoting strategies.
In terms of forming appropriate alliances and advancing business, it is company personnel who hold the key to success. As Fujitsu pursues overseas business development, it is necessary to cultivate the kind of personnel skilled enough to be involved in the target country's formation of policy or establishment of corporate strategy. Similarly, personnel with the aptitude to perform at the hub of industries abroad will be indispensable, either as employees or as partners.
Mr. Takeo Shiina, who laid the groundwork for IBM Japan, played a leading role at the center of Japan's business world. It is clear that his efforts were vital in cementing IBM Japan's unchallenged position in the Japanese market. In this way, Fujitsu's continuing challenge is how to go about finding the kind of personnel that can perform at the heart of industrial sectors abroad.
4. Concerning social awareness and recognition.
The products of solutions-providing companies are without shape or color; therefore, intangible factors such as social awareness, reputation, and trust assume key roles in business development. For a company such as Fujitsu – with international sales of approximately US$4.1 billion and 158,000 employees – international recognition of company character is paramount. It is therefore strategically critical to develop the image of a company not only endeavoring to solve immediate business problems, but also committed to tackling issues faced by peoples and countries worldwide.
The new board members showed great interest in these issues. In particular, the coordinators of overseas business development enthusiastically discussed what can and should be done in their respective positions. Fujitsu has survived the twists and turns of recent years, and will embark this year on a full-fledged strategic course of international business development. The constructive dialogue among those who will direct and support this course was a beneficial one.