The booming market compact system cameras is a place where all the major manufacturers are trying to gain an upper hand, since it is only in its first stages and will likely replaced in a near future DSLR cameras. Several manufacturers have devoted their special attention to the production of these compact system cameras, along with the high end compact cameras incorporating some of the features of low end DLSR cameras. This strategy is something that will be pursued by Olympus during the next-medium term management plan of the company. Regarding the imaging business of the company, it was recently announced that “…focus on mirrorless interchangeable-lens cameras and high-end compact cameras while improving profitability.”
Olympus has also laid down the profit targets during this mid-term period. The sales target by the end of March 2013 would be of 149b yen sales and 1b yen profits. By the end of March 2015, this would rise to 160b yen sales along with 7b yen profits, and culmination would be reached at the end of March 2016. Apparently Olympus has been very humble in laying out these targets, since they amount to 1%, 4% and 5% operating margin, even though generally 7% is considered to be the bare recommended operating margin for a healthy business.
Probably the most important aspect of this mid-range plan happens to be the expansion of compact system cameras production. According to the official estimates by Olympus, a 180% increase in unit volume of compact system cameras would take place from now till 2017. However, considering the abruptly expanding market of compact system cameras, the overall share of Olympus, even after the increased volume of production, would actually drop from 5.1 percent in 2013 to 4.8 % in 2015. Under such a situation, it seems that Olympus has a strategy of selling fewer high price cameras making large profit. However, the plans to cut down the production of low end compact camera would not be in favor of Olympus when it comes to the American market. Because of this reduction in the low-end cameras, many small and medium dealers might consider simply dropping Olympus as a full line.
The strategy of Olympus is quite similar to nichedom which, again, does not make much lens. Had Olympus made this move some 8 eight years ago, it would have been quite valid but such a decision at this point seems quite out of joint. The strategy of nichedom is always followed in an expanding market but the situation is not exactly like that at the moment. But still this mid-range plan of Olympus is more practical compared to the previous plan, which had a target of double the revenue of this year. The present plan is with no doubt achievable, but it has its certain problems and there is also much risk involved in the presence of other major stakeholders such as Canon, Nikon and Sony. So this news can generate mixed response from Olympus users but the real worth of this decision and prediction would only be known once the production of Olympus compact system cameras goes into full swing, as intended.