Magazine article Marketing

Sharp 'Inventor' Shift Fails

Magazine article Marketing

Sharp 'Inventor' Shift Fails

Article excerpt

Brand's repositioning has not stemmed its heavy losses.

Japanese brand Sharp Electronics' heritage of innovation - the company started off making belt buckles and invented the mechanical pencil - is a far cry from its current situation.

The value of its Tokyo-traded shares plunged by 30% at the beginning of this month, following a net loss of Yen138.4bn (pounds 1.12bn) for April to June, more than three times the figure for the same period last year. It warned it now expects a full-year loss of Yen250bn (pounds 2.05bn). The crisis has wiped almost a third off the company's value, and its management team has faced criticism for its approach to these mounting losses.

Last year the brand repositioned itself as an 'inventor for society', focusing on its reputation for innovation, as part of a pan-European strategy aimed at bolstering its flagging market share and differentiating it from rivals.

In recent years, Sharp has poured money into developing liquid crystal displays (LCD) used for flat-panel televisions and mobile devices but this investment has failed to pay off, with the market for TVs saturated, particularly in China and Japan. Sharp has also struggled with its solar-panel products, its other core business.

The brand has announced that it will cut 5000 jobs worldwide, about 9% of its workforce, the first major round of redundancies at the company in more than 50 years. Given tough business conditions, including the strength of the yen, how can the brand turn its fortunes around and overcome increasing competition from its Korean rivals, Samsung and LG Electronics?

Marketing asked Craig Morgan, head of innovation at Grey London, which previously handled the Toshiba account, and Dominic Chambers, head of marketing at Audi UK and the former European marketing director at LG Electronics.

SHARP STATS

Posted a loss of pounds 396m* in 2011

Currently employs 57,000 people worldwide

Source: Sharp *Yen49.28bn

DIAGNOSIS

Two industry experts on how Sharp can overcome tough trading conditions and competition

CRAIG MORGAN, HEAD OF INNOVATION, GREY LONDON (which previously handled the Toshiba account)

This is a brand that has lost its way because it doesn't employ a user-centric approach. …

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