Word: sharpness
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...Sharp got its flat-screen focus from Katsuhiko Machida, the company's president, who for years fretted that his outfit was doomed to be a second-tier player. When he ran Sharp's television business in the 1980s, Machida says, the firm had trouble competing because it didn't manufacture the most important TV component, the cathode-ray tube. Forced to cobble together parts bought from competitors, Sharp was little more than an assembler, cranking out sets that were always a little too expensive and a little too poorly engineered to attract many customers. It was a dispiriting struggle, says...
When Machida became president in 1998, he wasted no time acting on his theory. Sharp, he knew, had long excelled at developing products featuring liquid-crystal displays (LCDs). It released the first mass-market LCD calculator in 1973, developed its first flat-panel LCD TV in 1987 and dabbled in LCD televisions throughout the 1990s. Building on that foundation, Machida moved LCD TVs to the forefront of Sharp's strategy. He spent heavily over three years on the design, manufacture and marketing of a new flagship TV brand dubbed Aquos, and his bet paid off. Launched in January...
...Sharp's momentum has been a drag for struggling Sony, which recently brought in a non-Japanese CEO, Howard Stringer, to orchestrate a turnaround. Sony also demonstrates Machida's theory: the company has lost its primacy in TVs, and it shows. In July, Sony reported a quarterly loss of $330 million in its consumer-electronics division. Sharp, meanwhile, posted operating profits of $138 million for its consumer-products division...
...rare in corporate Japan, where a bias toward bulking up still reigns. Gerhard Fasol, president of Eurotechnology Japan, a tech consultancy in Tokyo, says, "The Toshibas and Hitachis of this world are in about 20 or 30 different industry areas. There is no focus." Even in secondary business lines, Sharp tries to develop what it calls one-of-a-kind products. A recent example: the new Healsio oven that reduces fat and salt content by cooking with superheated steam. The oven is a smash in Japan, even though it is small and retails for nearly...
Even in his core business of manufacturing LCDs, Machida is playing to Sharp's strengths and avoiding margin-killing commodity products. Taking on Goliaths like LG Electronics and Samsung Electronics across every LCD product line would be foolish, he says. They're dominant, for example, in mass-market LCD panels used in smaller, cheaper TVs and in laptops. Rather than engage them in a murderous price war, Sharp concentrates almost exclusively on ever larger TVs or on small, high-quality panels found in cell phones, car navigation systems and handheld game players like Sony's PSP and Nintendo...