1. Realizing the Goals in the NEXT50-Phase II Plan
In implementing the NEXT50-phase II medium-term management plan, we are working hard to create value that differentiates Yamaha; to continue the profit-oriented approach; and to maximise opportunities for business growth. Let us review the progress of each of these management issues in more detail.
To create distinctive value that sets Yamaha apart from the competition, we are stressing the unparalleled technology, products, and marketing that define the Yamaha identity. We intend to deliver added value that our customers cannot get anywhere else. In the ASEAN market, for example, we have introduced a new concept -- automatic motorcycles -- and vitalised the market. However, I do not believe we have achieved comparable results in Europe and the United States. Because the environment in these mature markets makes it more difficult to differentiate Yamaha, we need to redouble our efforts to enhance the brand image through the kind of high-value-added marketing that only Yamaha can offer. With this approach, we will surely win greater brand recognition and advance towards the goal of differentiating Yamaha from the competition.
By continuing the profit-oriented approach, we intend to build on the profitable structure that we created during our previous medium-term management plan, and extend it group-wide. However, there is room for improvement in this regard. Last year, our profitability actually declined, due to rising raw material prices and other negative factors.
To reverse this decline, we need to improve profitability at every step in the operation -- product planning, development, purchasing, production and sales -- by deploying our system-supplier system group-wide. We are resolved to become more cost conscious, reviewing once again all product processes from a comprehensive, upstream perspective.
In order to maximise growth opportunities, we aim to enhance our business foundation in markets with potential for further growth, thereby creating new businesses and demand. In India, we are still facing some difficulties in expanding our business. However, we have been able to achieve growth in Brazil and successfully exploit demand in Russia. In addition, our new life science business has begun full-scale operation. Overall, I believe that these efforts have paved the way for further success in the next medium-term management plan. In 2007, we intend to accelerate our action on all these fronts.