1986 1991

1986 1991
Chapter 7 : Three Challenges in Renovating the Business Structure : Creating New Demand by Strengthening Product Appeal
Chapter 7
1986 1991
Business Innovation to Overcome
the Strong Yen
Three Challenges in Renovating the Business Structure
Creating
ng New Demand by Strengthening Product Appeal
A
Responding to the surging value of the yen following the Plaza Accord,
Sharp began redefining the company’s business structure under a new management team.
The company created a three-pillar strategy: expanding the non-consumer electronics business,
such as information/communications equipment and electronic de
devices;
increasing
ncreasing the ratio of dom
do
domestic
mestic sales with products that create new demand; and shift
shifting
ting production
n overseas
overseas.
Through determined efforts in these areas,
Sharp transformed challenges into opportunities and put the company back on the growth track.
Sharp also foresaw the potential of the LCD business and made efforts to develop LCD-based applications.
Electronic organizers and word processors became a huge success,
and Sharp took a decisive leadership role in the age of information technology.
Blueprint for a refrigerator with a dual-swing door, which allows the door to open in either direction, an example of a demand-generating product
1
Chance Is Found in Changes
President Tsuji Appointed
President Saeki was convinced that Sharp was
establishing a new structure that could effectively respond
to changes in the business environment in the difficult
climate following the Plaza Accord. On June 27, 1986, he
said, “I would like to entrust management for the future to a
younger generation with the faith that their creativity and
agility can be effectively put to work.” Saeki became the
new chairman and appointed Haruo Tsuji, who had been a
senior executive director, to be the new president. On June
26, 1987, Saeki retired from the position of chairman and
became a corporate advisor.
President Tsuji had become a member of Sharp’s board
of directors in 1977 after serving as the Group Deputy
General Manager of the Consumer Electronics Marketing
Group and the Group General Manager of the Electronic
Equipment Group. His achievements included the
development of in-house production for VCRs—an area
where Sharp had been falling behind competitors—and an
increase in the market share for color TVs. From 1984, he
had worked as the head of the consumer electronics
business. He contributed to business expansion by being in
charge of a wide range of operations, including production
and domestic and international sales.
Upon his appointment as president, he expressed his
hopeful vision. He stated that, “When drastic changes are
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happening, as they are now, motivations for new
technology, new products, new demand, and new culture are
born. I’d like to take this positively, believing that there is a
silver lining within these dark clouds.” He set a
company-wide slogan for the following year of 1987 as
“Catch the opportunity in change and create new demand.
Have a creative spirit for innovation and act upon it.”
Starting a Strategy to Chase Two Hares at Once
In the currency exchange market, the yen quickly rose in
value against the US dollar following the Plaza Accord. The
value of the US dollar averaged 238.53 yen in 1985, but it
decreased to 168.52 yen the following year. The effect of
the stronger yen was serious for Sharp, where more than
60% of sales came from exports. Sales for fiscal 1986 fell to
90.9% of the previous year’s level, and recurring profit was
just 58.8% of the previous year’s total. For the first time in
11 years, Sharp reported a decrease in its income and profit.
It was an emergency situation.
Sharp took immediate measures to respond to these
developments. First, the company elicited new ideas from
all domestic and overseas divisions for emergency measures
to create a system whereby the company could make a
profit even if the dollar fell to 150 yen. From October 1986,
company-wide efforts were initiated to revitalize the
business. The plan consisted of 116 items (subsequently to
be increased in quality and quantity) such as the early
introduction of new products, the utilization of parts
procured from overseas, and a review of expenses.
Meanwhile, Sharp began making comprehensive
revisions of the business structure. The company took on a
strategy of “chasing two hares at once,” considering
pressing issues for management while also looking at the
mid to long-term future. The company created the following
three-pillar strategy.
First was a shift to growth areas. While expanding the
consumer electronics market, the company would also shift
to technology-intensive and large-scale equipment
businesses, and it would expand its business in the
non-consumer electronics market with information
equipment and electronic devices. The company would
particularly focus on the area of optoelectronics and invest
heavily in LCD technology that would become a central
driving force for the company. As a result, the ratio of sales
of non-consumer electronics increased from 32.6% in fiscal
1985 to 46.9% in fiscal 1990.
Sales by division from fiscal 1985 to 1990
(billions
of yen)
1,200
1,000
Electronic equipment
Audio equipment
Home appliances
Information equipment,
electronic devices
Consumer
electronics
800
600
400
Nonconsumer
electronics
200
0
New management team with Chairman Saeki (right) and President Tsuji
1985
1986
1987
1988
1989
1990 (fiscal year)
Second was the creation of brand new products and the
strengthening of domestic business. The company utilized
the Creative Lifestyle Focus Center (established in 1985)
and worked to create high-value-added products that
would create new demand, working from customers’
perspectives and applying key devices. As a result,
1986 1991
domestic sales increased, and the company’s percentage of
domestic sales grew from less than 40% in fiscal 1985 to
52.3% in fiscal 1988.
Third was to establish a global production system that
would not be affected by fluctuations in foreign exchange
rates. Sharp aimed to increase the ratio of overseas
production in overseas sales and opened and expanded
production facilities in both advanced countries and
developing countries to benefit from their geographical
advantages. As a result, the value of overseas production
in fiscal 1988 was nearly double what it was in fiscal
1985.
These efforts resulted in a recovery of sales. Sales in
fiscal 1987 were up slightly (100.5%) compared to the
previous year. Sales in fiscal 1988—when the yen was at
its strongest for that period—were up (113.7%) compared
to the previous year. Sharp was thus able to overcome the
strong yen.
Sharp Appliances (Thailand) Ltd. (SATL), a manufacturing
subsidiary, was established in Thailand in 1987
Implementing a Company-Wide,
Comprehensive Strategy: Jump Up 80
In 1988, a comprehensive company-wide strategy—
Jump Up 80—was implemented as Sharp prepared to
celebrate its 80th anniversary in 1992. Considering that
increasing organizational efficiency alone wouldn’t raise
the morale of the company, Sharp came up with bold
measures for the future. The strategy called for using
optoelectronics as a core technology to expand the size of
the business; it also called for placing more emphasis on
information and electronic devices as well as other new
areas. With an eye toward the 21st century, Sharp planned
to build a foundation for management that would maintain
double-digit annual growth even after the company
achieved the one trillion yen annual sales milestone.
In the late 1980s, Japanese companies utilized the
deregulation of financial markets and strengthened
corporate financing. Sharp issued domestic convertible
bonds and bonds with warrants in US dollars to raise
finance of about 98.9 billion yen in 1987 and 173.9 billion
yen in 1989. Helped by a bull market in shares, the
company increased its ratio of self-capitalization to 49.8%
at the end of fiscal 1991, up 11.2 points from fiscal 1986.
Sharp also issued commercial paper (CP)* to raise capital
for the short term and reduce finance costs.
* Commercial paper (CP): A discount style of promissory
note that leading corporations issue in the open market for
short-term financing. Promissory notes have now been
entirely replaced by a paperless electronic CP (short-term
bond).
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Chapter 7 : Three Challenges in Renovating the Business Structure : Creating New Demand by Strengthening Product Appeal
2
Aiming to Strengthen Corporate Culture
Restructuring the Sales System
Responding to the Popularity of
Office Automation Products
Around this time, office automation (OA)* was
spreading rapidly in Japan, and large-scale consumer
electronics stores carried more and more of these products.
To respond to this change, Sharp consolidated the separate
marketing groups for consumer electronics and information
equipment into one organization in 1986.
In January of the following year, the PA products* and
copier divisions of Sharp Business (SBK) and Sharp
Consumer Electronics were merged to become Sharp
Electronics Sales Corporation (SEH). This was done partly
to improve responsiveness in distribution. Meanwhile, in the
OA products area, Sharp System Products (SSP) and Sharp
Electronics Specialty Equipment Sales were integrated into
the remaining divisions of SBK, and the combined business
was restarted under the new corporate name of Sharp
System Products Co., Ltd.
The domestic
marketing division
focused on improving the
dissemination of
information to dealers.
They supplemented the
existing Sharp News
periodical with
audio-visual information
tools that could be used to
Videos were used to provide
present product
product information on a
information in a vivid,
regular basis
lively manner.
In April 1987, the Information Communication
Marketing Group was established to be in charge of dealing
with governmental agencies, large corporations, and Nippon
Telegraph and Telephone Corporation (NTT). In June 1988,
in addition to the existing OEM orders from NTT branch
offices, Sharp received an order from NTT’s headquarters.
Following that, the weight of sales for communication
devices started growing rapidly within the Group.
Additionally, in public relations activities, Sharp
increased its involvement as a sponsor in international
soccer games and at the Asian Pacific Awards—an event
honoring distinguished books in Asia and hosted by
Mainichi Newspapers Co.
Measures to Bring Out the Talents
of Employees
New Personnel Evaluation System,
Valuing “People”
Seeing that people would be the key to dealing with the
difficult business climate prevailing in the late 1980s, Sharp
developed a new personnel system.
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In 1988, the company implemented an internal
application program where employees could tackle areas
that the company was pursuing. The program was designed
to advance the company’s goal of placing appropriate talent
on important and pressing work, while meeting the needs of
employees wishing to take on a new and interesting
challenge. In 2000, it became a permanent program under
the name of the Open Recruitment System.
In 1987, Sharp started an overseas trainee program to
train employees to be ready to perform on a global stage.
Trainees were sent to Sharp’s overseas subsidiaries, to
language schools, and to major universities such as the
Massachusetts Institute of Technology. In 1988, Sharp
started a program to send employees for a limited time to
organizations inside and outside the company, so that they
could gain a wider range of knowledge and cultivate
networks of people in various fields. When sent outside the
Sharp Group, the employees were sent to research institutes,
universities, companies in other industries, and companies
overseas, to acquire knowledge and information that
couldn’t be acquired inside the company. In 1991, a career
development rotation program was implemented. This
provided young employees in the administrative and
marketing fields with opportunities to experience different
jobs and workplaces and to develop a wider perspective.
A new personnel evaluation system, based on the CM
(Creative Management) program, was implemented in 1989.
It was a unique personnel evaluation program where
employees had an interview with their superiors to set goals
and evaluate their performance. The evaluations not only
served as criteria for determining raises and promotions, but
they also helped to develop individual capabilities and
increase motivation.
Product Development by Listening
to the Voices of New Consumer
Leaders
Company-Wide Small-Group
Activities Become CATS Activities
In 1989, Sharp started a facility-maintenance program,
TPM (Total Productive Maintenance), to be participated in by
all employees. In 1990, TPM and the small-group activities
by quality-control circles were integrated into the Sharp
CATS (Creative Action Teams) program. The name
symbolized the creative and agile nature of the small-group
activities. CATS identified issues in the workplace and held
activities to address these issues and raise the quality of work.
sought quality and real value.
These were examples of Sharp’s efforts to capture and
analyze the characteristics of people’s changing lifestyles
and behavior, so that the company could develop unique
products.
Establishing the Creative Lifestyle Focus Center
In April 1985, the Creative Lifestyle Focus Center was
established based on the idea of then-Senior Executive
Director Tsuji. The center would gather the diverse voices
of consumers to understand their purchasing patterns
accurately in order to develop new types of products. Tsuji
focused on the trend of individualism in consumer leaders’
thinking and how it affected the preferences of people. He
presented the idea of “personal appliances” as opposed to
conventional “home appliances.”
The company began a program of studying about 500
highly lifestyle-conscious consumers to better understand
user trends. The program was designed to analyze their
lifestyles and product needs though group interviews and
other means.
The Creative Lifestyle Focus Center was upgraded to the
Creative Lifestyle Planning Group and the organization
further enhanced in April 1991.
A meeting at the Creative Lifestyle Focus Center (1985)
Introducing the U’s Series
Sharp supported the self-improvement of employees through
the Saturday Technology School (started in 1984) and the
Saturday Business School (started in 1985)
1986 1991
As more women were participating in the workforce,
the needs increased to make housekeeping more efficient
and to make better use of time and space. Sharp discovered the needs for “new necessities” through lifestyle
surveys and developed a product line called the U’s series.
One survey showed that, although many time-conscious
working wives were already using toaster ovens regularly,
they were not familiar with microwave ovens. From these
results, the company got the idea for a combined
toaster/microwave oven,
the RE-102. It was well
received, as it saved both
space and cooking time.
The first products from
the U’s series introduced
in September 1986 were
the RE-102 and the
SJ-30R7 “cooking”
The RE-102 was a microwave
refrigerator that had a
oven with a toaster oven
function. It could defrost
built-in microwave oven.
frozen food, warm it up, and
Sharp also launched the
bake it quickly. Its low height
“ist” series for the new
allowed for a compact size
mature generation who
that could fit on a dining table.
Introducing Unique, Industry-First Products
In January 1989, Sharp introduced the revolutionary
SJ-38WB, a refrigerator with a dual-swing door that could
open to the right or left—the first in the industry. The
mechanism of the door for this product was born from an
idea of an engineer who was inspired from seeing his
wife’s brooch. He applied the idea from the mechanism of
the turn stopper that keeps
the pin of the brooch from
releasing. Using this
insight, he persevered until
he achieved the new
design.
In 1987, Sharp released
the ES-X1 washer/dryer,
which incorporated a
washing machine and a
dryer in one unit. And in
1991, the company
introduced a fully
automatic washing
The SJ-38WB was a
machine, the ES-B750,
refrigerator with a dual-swing
which used air bubbles to
door that could open in either
clean—a world-first. The
direction. When the door was
being opened, the locking
air bubbles effectively
mechanism on the opening
dissolved the detergent,
side turned to release, but the
improving the washing
other side remained locked.
power and reducing the
unevenness of the washing.
In the area of color TVs, Sharp introduced
high-value-added products with large screens and
outstanding picture and sound quality to support authentic
audio-visual experiences. Sales at large-scale consumer
electronics stores, where Sharp was strong, increased.
Sharp’s share of domestic TV sales grew from 2.7% in
1981 to 15.5% in 1987, making it number two in the
industry. (Source: Japan’s Television Industry: The
Structure of Its Competitive Superiority, by Atsushi
Hiramoto)
In December 1990, Sharp introduced the VC-BS50, a
VCR that had a vacuum deposition head and enabled users
to enjoy high-quality images even when playing back in
extended play (3x) mode.
* OA stands for Office Automation and means products such
as word processors and fax machines that make
paperwork efficient by automation. PA means the personal
version of OA products, targeting individual consumers.
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Chapter 7 : Three Challenges in Renovating the Business Structure : Creating New Demand by Strengthening Product Appeal
3
Promoting Multimedia for Personal Use
Creating New Style for Telephones
IC Cards Instead of Refill Pages
At a time when organizers (i.e., day planners) with
refillable pages were popular, Sharp began developing an
electronic version of the organizer that used IC cards to
expand its capabilities.
A prototype was completed in July 1986, but its
commercialization was delayed. Since it could display
only katakana, Sharp deemed it insufficiently
user-friendly. After further development, the world’s first
kanji-capable electronic organizer, the PA-7000, was
introduced in January 1987. The PA-7000 also had five
personal information management functions: a calendar, a
scheduler, a memo function, a phone book, and a
calculator.
With IC cards to expand functionality, users could add
functions they wanted, such as a dictionary or English
conversation guide. The organizer drew rave reviews for
its ability to display kanji and became a huge success.
With the aid of sales promotion efforts, it sold 500,000
units in a single year.
“Bware” Intellectual Information Tools
In 1988, Sharp commercialized a series of mobile
information tools, including electronic organizers, under
the brand name of Bware (“Business Ware”). These
products were targeted at businesspeople living in an
information-intensive society and wanting to utilize that
information anytime and anywhere—whether they were on
the move or at their destination of the day.
Initially, Bware products used IC cards that were
developed by Sharp. But the company made the source
code for the devices open to the public, so that software
companies and publishers could develop and sell their own
content. Sharp also introduced the Program BASIC Card
to enable retailers and general users to create their own
applications. Sharp electronic
organizers were received so
well that by August 1990 total shipments in Japan had
reached four million units.
Evolution of the Japanese
Word Processor
In the beginning, the process of inputting text in a
kana-to-kanji-converting word processor required
inputting by clause. The converter often suggested
inappropriate kanji characters, as there are many
combinations with the same pronunciation. In order to
solve this problem, Sharp designed a connected-clause
conversion method that suggested kanji characters based
on an evaluation of the content of the surrounding clauses.
In the case of the word “warm,” it could change the
suggested kanji character depending on whether it was
connected to “room” or “food.” Further, the company
developed an artificial intelligence (AI) dictionary—which
included about 40,000 examples—to increase the accuracy
of the connected-clause conversion.
In May 1987, Sharp introduced the WD-540 word
processor, which was loaded with the AI dictionary. This
was followed in the same year by the introduction of the
WD-820, which featured a large backlit DSTN LCD, and
the WD-850, which had the industry’s first large EL
display. In 1988, Sharp introduced a laptop word
processor, the WV-500. To achieve the smaller and lighter
design of this model, the word-processor section was
separated from the printer.
In May 1989, Sharp’s cumulative production of word
processors reached two million units. Sharp continued to
fulfill customer expectations by introducing new products,
one after another. In 1990, the company released the
WD-A340, which included Super Outline Fonts that could
be printed beautifully regardless of font size. In 1991, a
business-use word processor, the WD-SD70, was
introduced. It had a 17-inch LCD screen that could be
oriented either vertically or horizontally for better
visibility.
The WD-A340 offered
quality nearing that of
printed type thanks to
built-in Super Outline Fonts
and a 64-dot 400-dpi
high-resolution printer
Sharp electronic organizers steal the show at the
1987 Data Show in Tokyo
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Efforts in Computer Products
Scanners
Facsimiles
Development of Electronic
Organizers
1986 1991
With plateauing
demand for facsimile
machines in the
business market,
Sharp shifted focus to
the home market.
October 1990 saw the
introduction of the
UX-1, which was
made to be as small,
thin, and light as
possible and which
could be set up
beneath a telephone.
The UX-1 was a stylish home-use
fax that redefined information
The model’s
equipment (phone sold separately)
nickname, Illustalk,
reflected Sharp’s
effort to promote sending illustrations by facsimile as a fun
new way of communicating. Advertised with the catch
phrase, “A better way to communicate than words,” it was
well received and helped popularize home use of facsimiles.
Telephones
In April 1985, NTT was privatized, and the market for
telephone equipment was opened up. Responding to this
change, Sharp established the Communication Audio
Division inside the Audio Systems Group. The following
year, the company introduced an answering machine.
Next, Sharp entered the cordless phone market. Cordless
phones were divided into two types—the ultra-low-power
type (for communication distances within 10 meters) and
the low-power type (for communication distances within
100 meters). Sharp introduced the ultra-low-power CJ-S30
in December 1987 and the low-power CJ-S100 in April
1988. The latter was priced at 89,800 yen—significantly
lower than the prices of competing models—as Sharp had
made the key components in-house and had automated its
production. Later, Sharp focused on the low-power type that
could provide more stable communication.
In September 1989, the company introduced the
industry’s first low-power cordless phone with an answering
machine, the CJ-A300.
It was developed in just
six months through
cooperation between
the development teams
for cordless phones and
answering machines. In
April 1991, Sharp’s
cumulative production
of cordless phones
reached two million
units. The expansion of
the business was
extremely fast.
The CJ-A300 could control
answering machine functions via
the handset and make calls from
the base unit, which was not
possible on previous models
In July 1986, Sharp introduced a desktop-size
high-precision color scanner, the JX-450. It became popular
in the design and fashion industries, gaining status as the
global standard.
Copiers
In 1989, Sharp introduced its first full-color copier, the
CX-7500. The year 1991 saw the release of the SD-2075, a
high-speed copier that could output 76 copies per minute
with air paper feeding and a form feeder function. In fiscal
1991, the worldwide production of Sharp copiers reached
500,000 units a year and cumulative sales surpassed 3.6
million units.
System Products
In the POS terminal market, the RZ-5100 series (for gas
stations) increased efficiency for software development by
using a multitasking general OS. Sharp also released the
RZ-5800, which could handle bar-code input. In the handy
terminal market, the RZ-5550, with a touchscreen LCD, and
the RZ-5541R, with wireless communication capability,
were commercialized in rapid succession.
PCs
In March 1987, Sharp introduced the X68000 series,
which had evolved out of the X1 PC-TV. Natural color
graphics—with 65,536 colors—and superb sound quality
suited for games made this product popular for personal use.
It was supported in particular by dedicated fans and
remained popular even after sales ended. In July 1988, the
AX386 was released, featuring a high-resolution display.
This model was an AX (architecture extended) PC based on
common specifications developed by a consortium of
Japanese electronics companies. Sharp enhanced its PC
lineup by introducing models such as a laptop type and a
laptop type with a color LCD.
English-to-Japanese Translation System
Sharp succeeded in developing an industry-first,
English-to-Japanese translation system for minicomputers
and exhibited it at the Business Show in Tokyo in 1985. In
September 1988, the DUET E/J was introduced. Onboard
AI technology enabled it to achieve high-level
semantic/language processing. It could also automatically
read English text through optical character recognition
(OCR).
School Education Support System
In 1984, Sharp began developing an education support
system for elementary schools and junior high schools in
cooperation with, among others, Professor Kazuhiko
Nakayama from the University of Tsukuba. Initially, the
system comprised mainly hardware; but positive feedback
about the system prompted the development of software that
could be used for other manufacturers’ PCs. Thus, Sharp
System Products (SSP) developed classroom/learning
support software that utilized networks and supported the
creation of teaching materials. This software was introduced
in 1990. With schools moving forward in response to the
information age, sales increased and the business expanded.
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Chapter 7 : Three Challenges in Renovating the Business Structure : Creating New Demand by Strengthening Product Appeal
4
Positioning LCDs as the Core Business
Strengthening Development and
Production Systems for LCDs
Establishing the Liquid Crystal Display Division
In 1985, Sharp succeeded in creating a prototype for a
3-inch LCD color TV. The final decision was made to
build a plant for thin-film transistor (TFT) LCDs and the
company organized a Sharp Taskforce to study methods
for mass production. Manufacturing of TFTs is similar to
that of LSIs in terms of the construction of transistors.
Initially, the company considered building a facility for a
6-inch (15 cm) wafer size, which was the standard for
LSIs at that time. However, Sharp was aware from its
experience in manufacturing LCDs for electronic calculators that creating multiple panels from a single glass
substrate was important in terms of cost efficiency.
Therefore the company insisted upon using the larger A4
size (14.3 inch [36 cm] diagonal) glass substrates that had
been used for production of passive-matrix (duty) LCDs.
Sharp had also heard about the prospects for development
of a large exposure device suited to this purpose, and it
made the decision to use the A4-size substrates.
In 1986, Sharp exhibited a 3-inch TFT LCD TV with
about 92,000 pixels at the Japan Electronics Show in
Tokyo. The high image quality, which had not existed
previously, drew a great deal of attention.
Thoroughly Examining the Potential
for LCD Application Products
The 14-inch color TFT LCD was a sensation at the Japan
Electronics Show in 1988
the success rate for 14-inch displays was close to zero.
Sharp continued to try different approaches, such as using
multiple wiring to the pixels or dividing the pixels into
four and using multiple transistors. Finally, Sharp’s first
prototype 14-inch color TFT LCD was completed in 1988.
The 14-inch size was the best-selling size for portable CRT
TVs; this new LCD had the same screen size but with
amazing dimensions. It had a thickness of just 27 mmone-thirteenth as thick as a conventional CRT TV—and it
weighed just 1.8 kg. This success cemented Sharp’s
decision to begin full-scale operation of a large-size LCD
business; in 1989, the company started building a
large-size TFT LCD production line (the NF-1 line) at the
Tenri Plant. The company also decided to build a plant in
Mie Prefecture. In April 1990, the Liquid Crystal Display
Division was upgraded to the Liquid Crystal Display
Group.
Display of
conventional STN
LCD
The WD-820 word processor had a
revolutionary easy-viewing
“paper-white” display
In 1987, Sharp’s yearly shipments of word processors
surpassed 500,000 units. In 1988, the company succeeded
in creating a color version. Duty LCDs, which were
increasingly being used for office automation products,
became a driving force for the LCD business.
Developing Ever More LCD
Application Products
and-white viewfinders, as users could identify objects by
color. Customers reported their satisfaction at being able
to, for example, identify their child at a school sports
festival. The video camera had a high resolution of 70,400
pixels per inch, achieving both high contrast and detailed
image quality.
Sharp also introduced the AX386LC color TFT LCD
laptop PC in 1990.
Creating the World’s First Wall-Mount TV
In 1991, Sharp introduced the industry’s first
wall-mount TV, the 9E-H series. It utilized the largest
screen in the industry at that time, an 8.6-inch color TFT
LCD. It was stylishly designed to enhance interior décors,
and the media reported that the “dream wall-mount TV has
finally arrived.”
The production value of LCDs was only 8.9 billion yen
in fiscal 1986 when the Liquid Crystal Display Division
was established. Following that, the markets for LCDs and
LCD application products both grew and reached 180
billion yen in fiscal 1993. In short, the LCD business had
grown by 20 times in just seven years.
Debut of the LCD Projection System
Development of the 14-Inch Color TFT LCD
7-07
green cast of its display made onscreen objects look quite
different to those printed on paper. The company therefore
aimed to produce a “paper-white” display by eliminating
the color cast. In order to accomplish that, the LCD was
overlapped in two layers to reverse the light twisting.
Beyond merely creating this structure, Sharp’s research
extended to examining around 2,000 different liquid
crystal materials and the effects of polish quality on the
LCD glass. In the end, Sharp succeeded in developing
DSTN (double super twisted nematic) LCDs, which
appeared “paper white.” In 1987, DSTN LCDs were used
for the WD-820 word processor. The model’s easy-to-view
display played a large part in helping Sharp to increase its
market share.
Home theater with the XV-100Z LCD projection system
As well as further developing LCDs themselves, Sharp
extensively reviewed the potential of products utilizing
LCDs. For example, the company considered new
products such as in-vehicle TVs and projection TVs. Sharp
made the decision to utilize LCDs to open up business
areas with new products while developing the LCD
business itself, following a corporate strategy based on
uniqueness, social contribution, and feasibility.
In January 1986, the LCD department was upgraded to
the Liquid Crystal Display Division—an indication of the
company’s determination to focus on LCDs. At the TFT
LCD plant, efforts were made to improve the efficiency
rate and the quality of production. In October 1987, Sharp
released the 3C-E1 3-inch LCD color TV.
In the process of establishing production technology for
3-inch LCDs, Sharp also took on the challenge to create a
14-inch LCD, utilizing the entire glass substrate. The
company decided to investigate how well the thin film
would form and to see if there would be defective
transistors created in making a large TFT LCD panel using
the entire surface of the glass substrate. In the initial
stages, the efficiency rate for 3-inch LCDs was low and
1986 1991
The LCD plant in Tenri, where large, high-quality TFT LCDs
were efficiently produced
Establishment of the DSTN Passive-Matrix
LCD Business
STN (super twisted nematic) LCDs were used for the
first time in the WD-250 word processor, which was
released in 1986. It offered good contrast, but the yellow-
Sharp proceeded to aggressively develop LCD
application products. LCDs became widely used for the
displays on information products such as word processors
and electronic organizers, as well as on phones, copiers,
VCRs, humidifiers, and many other products. This
contributed to the improved operability of the products.
In 1989, Sharp introduced an LCD projection
system—the XV-100Z—that made it easy to create a
100-inch display. Offering a dynamic visual experience at
home, this product received the grand prize at the 1989
Nikkei Outstanding Products and Services Awards. SEC,
Sharp’s sales company in the US, actively engaged in sales
promotion by touring the country with a XV-100Z loaded
on a large trailer to create a mini theater.
Meanwhile, Sharp introduced the VL-C860 video
camera with a color LCD viewfinder—an industry first.
The viewfinder was different from conventional black-
The industry’s first wall-mount TV, the 9E-HC1
7-08
Chapter 7 : Three Challenges in Renovating the Business Structure : Creating New Demand by Strengthening Product Appeal
5
In 1989, Sharp achieved a practical conversion
efficiency of 17.1%—the best in the world at the time—
for terrestrial-use monocrystalline silicon solar cells, and
in 1991 it achieved a 20.4% conversion efficiency at the
research level. This was made possible by bringing
together a number of advanced technologies, including
thin-film control technology to improve absorption of
surface light; optical diffusion control technology to
efficiently convert absorbed light to electrical current; and
technology for maximizing efficiency in the formation of
the back-side aluminum electrodes that prevent light from
going through the back of the solar cell.
For the cheaper-to-produce polycrystalline type of solar
cell, Sharp worked on improving conversion efficiency by
developing technology for sandwiching a layer of
stabilized SiO2 (silicon dioxide) on the surface of the solar
cell and creating a reflection-prevention film.
Confidence in Optoelectronics
Advancing in the Optoelectronic
Device Business
In 1988, Sharp made it clear in its basic corporate policy
that it intended to become a comprehensive electronics
company with optoelectronics as its core technology. The
company had already achieved a large market share in
optoelectronic devices in Japan.
Around this time, there was a widespread increase in
technologies that could process high volumes of
information using light—for example, fiber-optic
communication devices and compact discs. Also, the
market for LCDs was growing fast.
Solar Cells in Action around the World
Advancing in Lasers
In 1981, Sharp began mass production of laser diodes
for pickups (readers) used in CD players. The company
reportedly achieved an 80% market share for laser diodes
installed in CD players released in 1982.
The company endeavored to develop a new method of
growing crystals—the vapor deposition method*—that
would increase power output and productivity. In 1987,
Sharp developed the low-current quantum well laser. The
following year, Sharp developed a hologram laser unit in
cooperation with Philips International B.V. of the
Netherlands. This new product was made by housing
together in a single package the laser element (the
light-emitting part)—which had previously been an
independent device—and the signal-reading element (the
light-receiving part). This product made it easier to
assemble pickups and also reduced the process of optical
adjustment after assembly, contributing to lower costs and
smaller product sizes. Sharp increased its market share in
lasers.
EL panel deposition device that put a thin film
coating on a glass substrate by high-temperature
vacuum deposition
Inorganic EL
Sharp overcame the issue of service life in the
development of thin-film electroluminescence (EL)
technology, to make it suitable for practical applications.
Sharp’s 10-inch display from 1987 achieved high image
quality and low power consumption not found on CRTs.
The company made progress in utilizing it for factory
automation (FA) products and other applications. In 1989,
Sharp also developed an EL display capable of processing
handwritten text that users could input as if they were
writing on paper. This was achieved by simultaneously
detecting the coordinates of the stylus pen and displaying
input on the EL panel. In 1988, Sharp was awarded the
Karl Ferdinand Braun Prize from the Society for
Information Display (SID) for pioneering the development
of stable, high-luminance thin-film EL displays.
Leading the industry in terms of conversion efficiency
and other aspects, Sharp’s solar cells contributed to
people’s lives in various places. Three solar power
generation plants were installed in Thailand in 1986,
supplying electricity to 240 households in three
off-the-grid villages and greatly pleasing the 2,500
residents. These power generation plants were installed
with grant assistance from the Japanese government. For
space missions, Sharp’s outer space solar cells were
adopted for satellites such as the Fuji in 1986 and Kiku
No. 5 in 1987.
1986 1991
components show in the Tokyo metropolitan area in 1987,
with the exhibit centered on IC-related products—such as
CCDs, microcomputers, and memory devices—along with
other unique products such as LEDs and color LCDs.
An electronic components trade show was held at Sharp’s
head office as well
Urged to Purchase Foreign Products
In 1985, the Japanese government requested industry to
increase imports and this called for the increased
utilization of imported semiconductors. Sharp held a joint
exhibition with foreign semiconductor manufacturers in
1989 to promote sales of imported semiconductors.
This exhibition contributed not only to the increased
sales of new components but also to the exchange of
technical information, benefiting both foreign
semiconductor manufacturers and Sharp.
Expansion of Device Sales
Sales Promotion Activities for Devices
Laser diodes strengthened Sharp’s brand power in
electronic devices. In order to further boost the brand and
gain more orders, Sharp held its first electronic
* The vapor deposition method is a method of growing
crystals on a substrate surface by condensing the
vaporized form of the material.
Inside structure of a hologram laser
Light reflecting from the disk
Hologram glass
Laser light
Laser diode
chip
Photo diode
for laser
output
monitor
High-speed
OPIC
light-receiving
element for
detecting
signals
Progress in LED/EL
LED
Sharp developed an ultra-high-luminance, 5,000 mcd
(millicandela) LED lamp in 1987, expanding the
application of LEDs to electronic billboards, tail lights for
automobiles, and other uses.
7-09
Steady Growth in RF (Radio Frequency)
Components and Mask ROM Business
Sharp developed a DBS tuner for satellite broadcast
receivers. Its reliability and functionality were regarded
highly and many orders came in from Europe, North
America, and other areas. In the mask ROM business, the
company responded to the needs of videogame and OA
product manufacturers for higher speed, larger storage
capacity, and faster delivery. In 1994, the company’s
domestic market share reached 41.9%.
Technological Advances in Solar Cells
Progress in Conversion Efficiency
The biggest issue for solar cells is the power generation
cost, and improvement of conversion efficiency to reduce
this cost has long been a challenge in the field.
Columbus Sails the Nation Promoting Sharp
For 18 months starting in June 1988, the Sharp Columbus, a
2,800-ton ship, visited a total of 72 ports around Japan
including Kobe and Yokohama and was boarded by a total of
1.37 million people.
Inside the Columbus, visitors could experience Sharp
products like high-definition TVs, EL displays, and laser
diodes, and see lifestyle/office-style exhibits featuring the
latest models of Sharp audio-visual and office equipment.
Everywhere the ship docked, it was enthusiastically welcomed
by harbormasters and local mayors. About 600 media
organizations came by to do stories on this Sharp promotional
vessel.
Also at each port of call, Sharp held negotiations with
dealers and joint sales exhibitions for customers, making the
tour an excellent opportunity to sell Sharp products.
The Columbus (top) and a bustling
product exhibit inside (bottom)
7-10
Chapter 7 : Three Challenges in Renovating the Business Structure : Creating New Demand by Strengthening Product Appeal
6
Seeking the Best Locations for Production and Sales
Enhancing the Network of Sales
Bases
Taking on a Difficult Environment in
Production and Sales
The Plaza Accord on September 22, 1985 triggered a
sudden and dramatic increase in the value of the yen.
However, that change didn’t fix the US trade deficit with
Japan, and trade friction between the US and Japan didn’t
subside at all. In 1986, the two countries reached an
agreement on the trade of semiconductors. In the
following year, the US enacted a 100% tariff on color TVs
and PCs, claiming that Japanese companies had violated
the agreement. Affected by these developments, Sharp’s
exports in fiscal 1986 decreased to about 80% of those in
the previous year. In 1989, the Japan-US Structural
Impediments Initiative was held to correct trade
imbalances. Similarly, European markets moved to restrict
imports of products such as VCRs. Under these difficult
circumstances, Sharp made progress in production and
sales based on a concept of the “best locations for
production and sales.”
In Europe, where the integration to the European Union
(EU) was set to commence in 1992, Sharp bid to improve
its market responsiveness by adding six new sales
organizations—making nine sales subsidiaries in nine
countries. In 1990, the company established a financial
subsidiary, Sharp International Finance U.K. Plc. (SIF) in
the UK. By managing financing for the European
subsidiaries in one place, Sharp minimized the negative
impact of currency exchange fluctuations and effectively
raised and managed funds.
In the US, Sharp released a new product, the facsimile,
in 1985. Starting from 1987, it kept the top market share
for 11 consecutive years (based on a Dataquest survey).
The company also kept the top market share for 11
consecutive years in the sales of microwave ovens, starting
from 1990 (based on a Trendata survey).
Further, in February 1987, the Overseas Business Group,
product divisions, and overseas sales subsidiaries held their
first joint product strategy and management policy review.
Lively discussions were held regarding sales plans,
marketing initiatives, and trade issues.
The first product strategy and management policy review
was held in 1987. Six sales companies from overseas (SEC,
SEEG, SECL, SCA, SUK, SRS) participated.
In 1988, a new in-company English-language periodical
called We’re Sharp was launched to keep close
communication with employees and their families at
manufacturing and sales subsidiaries around the world. A
Chinese edition has been published since 2004.
Company-Wide Efforts to Increase Imports
In August 1985, Sharp established an import company,
Sharp Trading Corporation (STC). In that year, the
Ministry of International Trade and Industry (now METI)
took measures to adjust Japan’s balance of trade surplus by
asking 60 major companies to increase their imports of
products. Through STC, Sharp made company-wide
efforts to increase the number of items
imported—including components and products made at
Sharp’s overseas bases, as well as general consumer
goods—while increasing sales volume in order to stabilize
and develop overseas operations. As a result, imports by
Sharp surged from approximately 4.3 billion yen in fiscal
1984 to 29.8 billion yen in 1991. The company created a
virtuous cycle by connecting with overseas markets more
tightly through imports and exports.
Localization of Production
Facilities
In developing a network of dealers for office products and
communication equipment, Sharp expanded the market for
business-use facsimiles. (Photo shows FO-800 fax)
Sharp also established new sales bases in the Asia and
Pacific regions and continued to improve its product and
marketing strategy to fit the needs of the regions.
7-11
Sharp’s company-wide plans were formulated in line with
a division of production facilities into two categories:
production facilities for local consumption (where the
primary purpose was sales in that country or region) and
production facilities for re-export (where the primary
purpose was for export to third countries).
Efforts to Become Part of the Local Community
1986 1991
Active Enhancement of Re-Export Bases
In markets in Europe and North America, the focus was
to ease trade frictions while continuing to secure the
company’s position in those markets. The company also
made efforts to contribute locally by hiring local staff.
SMCA in the US began production of PCs and LCD
projectors in addition to microwave ovens and color TVs.
SMCA’s microwave ovens were also exported to Europe.
As a result of progressive improvements in quality control
(QC) and streamlining and automation of manufacturing,
the cumulative number of color TVs and microwave ovens
manufactured by SMCA reached 10 million units in
November 1988, in just eight or so years following the
company’s establishment.
Sharp developed production facilities in Europe as well,
but Japanese companies (including Sharp) were criticized
by EU nations claiming that they performed the
value-added process in Japan and then merely had the
products assembled in Europe. Responding to this, Sharp
strengthened local design technology divisions and made
efforts to increase the portion of locally procured
components.
SUKM in the UK began manufacturing electronic
typewriters, copiers, and CD players—in addition to VCRs
and microwave ovens—and expanded its business by
exporting to EU nations. SUKM was awarded the 1990
Queen’s Award for Export and Technology in recognition
of its contribution to increasing exports from the UK. It
was rare for a foreign company that had been in operation
for less than five years to receive the honor. It became big
news, with SUKM receiving a lot of praise.
Re-export bases, mostly in Asia, were expected to bring
two benefits. By replacing exports from Japan, they helped
to ease trade friction. They also helped to establish a
system where profits could be made even with the strong
yen. Actively enhancing re-export bases enabled Sharp to
secure an inexpensive but excellent workforce and procure
high-quality materials at lower costs. Sharp was able to
dramatically increase its competitive position in terms of
pricing. SREC in Malaysia was even awarded the 1987
Export Achievement Award from the Malaysian
government for its contribution to the growth of the
country’s industry. Sharp was responsible for 14% of
Malaysia’s exports of electric and electronic products and
was seen as an industry leader in that country.
Sharp also established Creative Lifestyle Focus Centers
in the US in 1986 and in West Germany in 1987 to expand
its development of lifestyle-based products, which had
been achieving strong results in Japan. The company
researched the needs of
local markets and worked
both to develop new
products locally and to
redevelop mature
products.
The ultra-thin VL-50C video
camera, developed at the
US Creative Lifestyle Focus
Center
Sharp overseas manufacturing and sales bases established between 1986 and 1991
(Business activities are those at time of establishment)
Company name
1986
1987
Sales base
Country or region
1990
1991
Business activities
Sharp Electronics (Schweiz) AG (SEZ)
Switzerland
Sales of office equipment
Sharp Electronics GmbH (SEA)
Austria
Sales of consumer electronics and office equipment
(incorporated into SEEG in 2004)
Sharp-Roxy Sales (Singapore) Pte., Ltd. (SRS)
Singapore
Sales of consumer electronics and office equipment
Sharp Electrónica España S.A. (SEES)
Spain
Manufacture and sales of color TVs,
sales of consumer electronics
Sharp Electronics Taiwan Co., Ltd. (SET)
Taiwan
Manufacture of electronic tuners (business stopped in 2008)
Sharp Appliances (Thailand) Ltd. (SATL)
Thailand
Manufacture and sales of microwave ovens and refrigerators
Sharp Electronics (Singapore) Pte., Ltd. (SESL)
Singapore
Supply of components and kits for Sharp manufacturing bases
Sharp-Roxy (Hong Kong) Ltd. (SRH)
Hong Kong
Sales of consumer electronics and office equipment
Sharp Corporation of New Zealand Ltd. (SCNZ)
New Zealand
Sales of consumer electronics and office equipment
Sharp Precision Manufacturing (U.K.) Ltd. (SPM)
United Kingdom
Manufacture of precision press components
(business stopped in 2005)
1988
1989
Manufacturing base
Sharp Manufacturing France S.A. (SMF)
France
Manufacture of copiers and facsimiles
Sharp Thebnakorn Co., Ltd. (STCL)
(Name changed to Sharp Thai Co., Ltd. [STCL] in 2007)
Thailand
Sales of consumer electronics and office equipment
Kalyani Sharp India Ltd. (KSIL)
(Name changed to Sharp India Limited [SIL] in 2005)
India
Manufacture and sales of color TVs and VCRs
Sharp Manufacturing Corporation (M) Sdn. Bhd. (SMM)
Malaysia
Manufacture of VCRs
Sharp Corporation (Taiwan) (SCOT)
Taiwan
Sales of consumer electronics
Sharp Burotype Machines S.A. (SBM)*
(Name changed to Sharp Electronics France S.A. [SEF] in 1991)
France
Sales of office equipment
Sharp Electronics (Italia) S.p.A. (SEIS)
Italy
Sales of consumer electronics
Sharp Electronics Benelux B.V. (SEB)
Netherlands
Sales of office equipment
The year of establishment is the year the company was registered. * For SBM, it is the year Sharp acquired a local dealer and made it a sales subsidiary.
7-12
What are optoelectronics devices?
Optoelectronic devices—semiconductor components that combine optics and
electronics—have played a major role in the development of an advanced,
information-based society thanks to their ability to communicate, store, and
convert large volumes of information quickly and accurately. They consist of
light-emitting and light-receiving elements, and they are available in numerous
variations of purpose and function. Sharp began dedicating resources to research
in this field early on and established a lead in the global market thanks to
technological advantages in terms of products and manufacturing techniques.
Light-based
displays and lighting
Exchange of data
Image capture
Manufacturing technology
1 Liquid phase epitaxy
LCD TV backlights
Inorganic ELs
Type of
information
that can be
displayed
5
Red LEDs
key
technologies
Text
Dots Numbers Symbols
(1) Liquid phase epitaxy
Lighting and signboards
LED lamps
5
(2) OPIC
Photocouplers/
photo-interrupters
Infrared diodes
Photocouplers and photo-interrupters
Photocouplers and photo-interrupters,
which consist of light-emitting and
light-receiving elements, convert
electrical signals and transmit them as
light. They are used to detect the
presence of objects and their position.
Infrared communications Infrared communications allow
information to be sent and received wirelessly using infrared
light. TV remote controls are a typical example of this technology,
but it is also used to send and receive image and text data
between devices such as mobile phones and computers.
Standardization bodies have established standards governing
various aspects of the technology’s implementation, including
communication ranges and formats. Compared to radio waves,
infrared communications offer a high level of security.
Signal
transmission
circuits
(V-channeled substrate inner stripe)
The creation of a V-shaped groove on a P-type
gallium arsenide substrate allows the formation of a
series of thin layers, providing stable laser light with a
long service life.
Infrared
communications devices
IrSimple high-speed infrared
communications devices
High-definition
images
Text,
still images
Positive electrode
P-type GaAs
Current
n-type GaAs
n-type GaAs
negative
electrode
Remote-controlled TVs
Air conditioners
5
5
Emitted light
key
technologies
(4) Hologram
laser unit
Infrared laser diodes
Mobile phones
Electronic organizers
5
Type of data
that can be
handled
3 VSIS structure
Operation of
consumer
electronics
key
technologies
Lasers Whereas sunlight and
fluorescent light contain various
wavelengths, laser light consists of a
single wavelength. Due to the high level
of linearity of the light they produce,
lasers are used in laser pointers, and
they are essential for optical disc media
such as BDs and DVDs.
LED lighting
LED AQUOS
Full-color LED displays
LED displays
OPICs integrate a light-receiving element and signal
processing circuit onto a single chip. Integration with
an IC reduces the effects of external interference and
allows output signals to be directly linked to a
microcontroller. The design was instrumental in the
development of more compact, more reliable, and
more inexpensive devices.
Manufacturing technology
key
technologies
Type of data
that can be
communicated
Product technology
2 OPIC (optical IC)
Graphics
Calculators
This method for forming light emitter p-n junctions at
the same time as crystal is grown allows growth of
extremely high-quality crystal. Sharp’s patents in the
area of crystal growth propelled the company to a
leading position in the industry.
LEDs for lighting
Blue LEDs
Dot matrix LEDs
LEDs for displaying
numbers and symbols
5
key
technologies
2010s
2000s
LED lighting LEDs can be used to implement lighting that
boasts lower energy use as well as a longer service life than
conventional incandescent and fluorescent bulbs.
Additionally, the emitted wavelength can be controlled to
obtain the desired light color.
(5) Vapor phase
epitaxy
Laser wavelength (color) Lasers with shorter wavelengths are needed in order to
read and store higher densities of information using optical disc media. For example,
CDs use infrared lasers, while DVDs use red, and BDs blue-violet, lasers. Of these, BDs
have the highest storage capacity. Additionally, lasers with higher output are required in
order to improve write speeds.
Hologram lasers
High-definition
images
Blue-violet laser diodes
Red laser diodes
Music
key
technologies
TV images
Computer
data
Product technology
4 Hologram laser unit
A hologram laser unit incorporates a light-emitting
laser element and a light-receiving signal-reading
element into a single package. In addition to allowing
more compact pickups, the design is distinguished by
its reduction of the need to perform optical
adjustment during the assembly process.
Inside structure of a hologram laser
(3) VSIS structure
Light reflected
from the disc
CD players
Type of data
that can be
captured
Blue cells for cameras
Mark sensors
Light and
dark areas
Cameras
Hologram
glass
MD recorders
One-dimensional
CCD line sensors
White and
black areas
Computers
CCD area
sensors
Image and
text on paper
Video recording
DVD recorders
Large electronic calculators
Paper tape readers
BD recorders
C-MOS camera modules
Sharp’s one-of-a-kind technologies
On-chip color filter
On-chip micro-lens
Sharp developed a proprietary
manufacturing method for creating a
color filter and super-small,
Micro-lens
light-collecting lens directly on the
On-chip
surface of CCD and C-MOS chips.
color filter
These innovations delivered improved
Light-receiving image quality and sensitivity, helping
area
maintain Sharp’s lead in the industry.
Camera modules
Sharp developed
compact,
thin-profile camera
modules that
integrated image
sensors and
lenses in order to
shrink the size of
mobile devices.
Videocameras
Laser light
Laser
diode chip
High-speed OPIC
Photodiode
for laser
light-receiving
element for
output monitor
signal detection
Manufacturing technology
3 Vapor phase epitaxy
Vapor phase epitaxy technology is used to form thin
films by growing crystals of the vaporized material on
a substrate. Sharp has drawn on its expertise in the
area of crystal growth technologies to establish a
lead over competitors and seize high market share.
Incident light
Fax machines
G4-01
Products: Optoelectronic Devices
1990s
1980s
1970s
1960s
Storage of data
Developing along with Application
Sharp’s One-of-a-Kind Technologies
That Bolster Its Lead in Optoelectronics
Mobile phones
G4-02
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