"ONKYO" hit by the period May 16th 19:15
ONKYO speakers that play delicate and clear high frequencies.
The prestigious company "Onkyo" has been captivated by audiophiles.
Although I have been suffering from poor business performance, I finally filed for bankruptcy on May 13 and received a court decision to start bankruptcy proceedings.
Why have you been driven so far?
As I deepened my coverage, I saw the big swells of the times and the bad habits of the Japanese manufacturing industry.
(Kotaro Tanigawa, Reporter, Economic Department Tomokazu Kogi, Reporter, NHK Osaka)
A series of regrettable voices on the net
(From Twitter)
"Wow, really, I'm lonely ..."
"I'm very sad because I've been using it for many years ." "I wonder
if the number of people who are particular about" good sound "has decreased ...
"
When information about Onkyo's bankruptcy was transmitted, there were a series of surprises and regrets on the Internet.
Some of them miss the heyday of the company, even such a voice.
"Onkyo was a commercial for" Nanno "..."
Onkyo Glory Age
"I want you to like it slowly,"
says Yoko Minamino, an idol, with a moist voice.
This is a commercial scene from Onkyo's popular mini component system "RADIAN" in 1986.
At that time, this mini component system became popular because younger generations wanted to get it when they went on to school or got a job, and it was a representative product of Onkyo.
In 1991, the high-end speaker "Grand Scepter GS-1", which costs 2.4 million yen as a pair, won the prestigious French award.
It is still talked about as a legendary machine.
The company was founded in Osaka.
Takeshi Godai, who was the factory manager of the speaker manufacturing factory of the former Panasonic, former Matsushita Electric Industrial Co., Ltd., started his business in 1946 as "Osaka Electric Sound".
We have released products that are particular about sound to the world one after another, and have grown into a leading audio brand in Japan.
Insolvency for 5 consecutive years in deficit
However, after the Lehman shock, the situation has not been such that large profits will be generated, and we will be forced into severe management.
From the financial results for the fiscal year ended March 2014, it became the final deficit for the fifth consecutive term, and in the fiscal year ended March 2020, it recorded the largest deficit of over 9.8 billion yen.
In the end of the fiscal year ending March 2021, the company was delisted in August 2021 due to a deficit of 5.8 billion yen, which resulted in insolvency for the second consecutive term.
After that, we have been streamlining and rebuilding our business, such as by selling our main AV business, but due to the influence of the new Corona, the downward trend in production and sales has not changed, and we finally continued our business on May 13. I gave up.
Perry Expedition called Apple
Why did the prestigious audio brand fall so far?
One of the factors was the invasion of a black ship called Apple.
In 2003, Apple launched an iTunes service in the United States where you can download and enjoy music using the Internet.
It unleashed the music that was previously taken for granted by buying and listening to CDs into the world of the Internet.
The iPhone was released in 2007.
Music was taken into smartphones, and the digitization of music accelerated rapidly.
Can't keep up with changes in the market
Onkyo wasn't looking at it with his fingers in his mouth.
I was trying to support digitalization, such as by acquiring the personal computer maker "Sotec".
When I talked to the executives of the company at that time in January 2021, the market change was faster than I imagined, and above all, the significance of the existence of audio equipment that reproduces sound by incorporating music into smartphones. He recalled that it was a big pain for him to fade rapidly.
Director Hayashi (at that time)
"There was a misunderstanding that the market was moving much faster than expected and digital technology was evolving. Since it is a company that only does audio, the market was seriously influenced by it. I didn't have enough speed to catch up with
How is it different from other companies?
Of course, Onkyo is not the only manufacturer that has struggled with rapid changes in the environment.
However, Denon and Marantz had merged and rationalized as early as 2002.
Kenwood also merged with JVC in 2008 to make car audio, drive recorders and other car-related equipment its strengths.
And Sony, a large company, has profitability other than audio, and has the capacity to invest in development.
Cases that are common in the Japanese manufacturing industry
Onkyo is also embarking on a corporate acquisition.
In 2015, we acquired the AV equipment business division of Pioneer, a manufacturer that was once higher than Onkyo and was also called the Audio Three Family.
We tried to make a leap forward by standardizing product development and increasing profitability.
However, I was too particular about maintaining the size of the company.
Despite the shrinking market, we focused only on maintaining sales and continued to sell a large number of products in a wide range of prices such as mini components.
On the contrary, it is said that the development cost increased and the profit deteriorated.
Company executives regret that management has been weakened faster than the integration has been effective.
Also, although it is often thought of as a small thing, some industry insiders point out that they neglected to explain the product carefully and aftercare.
It is said that the fans were disappointed because there were few people in charge of giving detailed explanations at the store.
Professor Atsushi Osanai of Waseda University Business School, who is familiar with corporate management, has analyzed for more than a year that the deterioration of Onkyo's business performance is a common case in the Japanese manufacturing industry.
Professor Nagauchi
"Most Japanese electronics manufacturers in the 20th century have made a difference in technology. Therefore, the idea was that if you develop a product with high performance, you can do anything else. Onkyo was, so to speak, "keeping making" that customers would understand if they made a good product. The problem was that they didn't attach much importance to the process of selling, so it was manufactured in Japan. It can be said that it is a typical failure example of the industry. "
Seeking recovery
What kind of strategy did Onkyo take when it was driven to the brink?
First, he abandoned his idea of maintaining the size of the company.
Moved the head office from the center of Osaka city to Higashi Osaka city for thorough cost reduction.
We have also taken bold steps to reduce personnel.
The number of employees, which was 4,600 at the peak, was reduced to more than 800, which is less than one-fifth as of September 2021.
We are also focusing on selling hearing aids and sound collectors, which are expected to meet the needs of an aging society.
I was trying to make a product that "sounds well" by using the technical capabilities that I had trained with audio.
With the new corona, conversations through masks have increased, and elderly people are increasingly demanding hearing aids and sound collectors that are easy to hear.
Hearing aid sales for the year to January 2021 have quadrupled from the previous year, and he said that this is an area that he would like to continue to strengthen.
In addition, we have stopped the principle of making finished products on our own and strengthened OEM production of speakers to be incorporated into notebook computers and TVs of other manufacturers.
However, some of the products we delivered continued to have a small pride in the brand, such as having the Sound by ONKYO logo put on them.
In addition, the company was divided into three parts to create an environment where it was easy to raise funds.
Exhausted
In September 2021, Sharp sold its main business such as speakers and amplifiers to a joint venture company made by VOXX in the United States, which manufactures and sells audio, for 3.3 billion yen.
In addition to this, we also let go of the planning and sales business of products such as earphones and headphones.
The company was trying to generate profits by focusing on sales of audio products produced by other companies while retaining the "ONKYO" brand, but due to the impact of the new Corona, the semiconductor shortage also overlapped, and the product was supplied as desired. I couldn't do it, and I've run out of measures.
A credit bureau official said:
A credit bureau official said,
"There was no business left in the parent company due to overlapping sales, and there was no material for management to improve. It is also possible that the corona-ka and the shortage of semiconductors have hindered the deterioration of management. It seems that the fact that the employees could not pay their salaries was also a factor in the decision. "
What is the real cause?
What is the true cause of Onkyo's bankruptcy?
Professor Nagauchi believes that the acquisition of Pioneer's AV equipment business division was a turning point.
The number of employees has increased, and as he tried to protect his employment, he focused on pursuing sales, which led to a misunderstanding of the direction of management.
Professor Nagauchi
"Since the acquisition of Pioneer, in order to support our employees, we have had to prepare a product lineup to increase sales. On the other hand, between the Onkyo brand and the Pioneer brand, we have to work within our company. I was in a cannibalistic situation. When I was in a financial crisis, I should have organized my business properly and clearly created a brand image that "Onkyo is such a company." Because of its strong technology, I should have created a clear brand image. Management has weakened. "
Instead of clinging to the glory of the past, we will utilize our technology and flexibly respond to fields of need.
It is an important management strategy in the complex and accelerating changes of the times, but it seems that Onkyo did not see its importance, or even if it did, it was delayed in putting it into a real business. ..
Sound creation technology that has fascinated many audiophiles.
While the speed of change is accelerating due to the evolution of technology, the financial crisis and the spread of the new coronavirus infection, the direction of business strategy and the timing of decisions are becoming more difficult.
"I want you to like it slowly" As I
introduced at the beginning, it is a phrase used in the commercials of mini components in the 1980s.
What is required in this era is to have people "love quickly" and follow changing consumer tastes, or to "love deeply".
It made me realize how difficult it is for a company to grow its business in a stable manner.
* Posted in the business special feature "What will happen?" ONKYO "on the brink" released on March 3, 2021 with major revisions.
What it will be?
“ONKYO” on the brink
Kotaro Tanikawa ,
Reporter, Economic Department
Joined in 2013
After working at the Okinawa and Osaka stations, he has been in charge of the information and communication industry since November last year.
Tomokazu Kogi , NHK
Osaka Broadcasting Station
Joined in 2007 Covered
the financial industry at the Ministry of Economic Affairs, and is currently in charge of economics at the Osaka Station.
NHK Osaka reporter
Yukifumi Yoshida
Joined in 2016
After working at the Oita station, he has been
interviewing the economic manufacturers and the energy industry at the Osaka station since last year.