Fundamental Management Policy/Mid-term Management Strategy

The Company in February 2013 established the “Citizen Global Plan 2018” medium-term management plan, which covers years until the fiscal year ending March 31, 2019 (hereinafter “the Management Plan”).
Under the “Aiming to Be a Solid Global Company - business group with speed and dynamics -” slogan, the Company, with the following two targets as a basic management policy, aims to be a “solid global company” that consistently provides “value” required in the global market.

1) The Company will focus on the business area it can make use of the strengths developed and accumulated on years of experience of the watches and clocks business, and aim to establish an industry leading business group with global competitiveness.

2) The Company will enhance its earning power through manufacturing innovation, to establish a high profit structure.

Mid-term Management Strategy

The first three years (FY2013 - FY2015) of the Management Plan will be devoted for thorough structural reform and improvement, and funds generated as a result of the structural reform for cost-effectiveness will be put in aggressive growth investments in the latter three years (FY2016 - FY2018) to enhance business performance. Through these stages the Company will pursue the FY2018 goal to become a “solid global company,” so as to survive against international competition.

During the first three years (FY2013 - FY2015), the Company implemented comprehensive structural reform and improvements, in an effort to establish a more robust management structure. During the latter three years (FY2016 - FY2018), it intends to further strengthen manufacturing capabilities, with the aim of overcoming increasingly fierce global competition and improving profitability, and to increase performance through active investment in growth, with the goal of becoming a “Solid Global Company” by fiscal 2018.
During the latter three years (FY2016 - FY2018), the Company is focusing on the following four tasks to overcome its management challenges.

1. Comprehensively strengthening the Company’s structure and manufacturing capabilities
2. Actively investing in business growth and strengthening marketing capabilities
3. Refining and targeting products and businesses
4. Improving human productivity and strengthening human resources

The Company booked 23.603 billion yen in an extraordinary loss in this fiscal year to cover the expenses necessary to implement these measures.

Strategies of each business segment

1. Watches

The Company implements a multi-brand strategy revolving primarily around growing the Citizen brand product business, based on the slogan “From Functionality to Corporate Branding.” Initiatives will be firmly targeted at Japan and North America continuously, as priority markets. The Company also continues to effectively strengthen manufacturing capabilities, in order to overcome fierce competition and improve profitability.

2. Machine tools

The Company is pushing forward with the establishment of a position as a “new manufacturing company” that creates products equipped with new technologies that precisely fit customer needs as well as the most advanced production innovation solutions in the world, based on miniaturization and precision machining and control technologies developed through the manufacture of watch parts, and to secure a stable position with a leading share in the automatic lathe market.

3. Devices and components

The Company expands its precision component business to outperform competitors in global niche markets, based on the Group’s strengths in terms of processing technologies for metallic parts and brittle materials. With regard to LED products, the Company is looking to stabilize and increase profits by further refining the Group’s unique strengths in terms of miniaturization, ultra-thin and high brightness technologies, whilst at the same time making the most of its capital and business alliance with Nichia Corporation. With regard to other devices products, the Company intends to prioritize stable revenue ahead of increasing sales, aiming to enhance profit margin.

4. Electronic products

Having commercial and photo printers of high quality/reliability as the core products, the Company seeks to generate stable profits by developing businesses mainly in the global niche market. It is also promoting the enhancement of profit margin through efficiency improvement in the areas of development, manufacturing, and sales.

During the fiscal year ended March 31, 2017, which marks the first year of the latter three years (FY2016 – FY2018) of the Management Plan, our performance temporarily stagnated due to the strong yen and the decrease in inbound demand. However, we will aim to further improve profitability and expand sales by continuing our efforts to build a solid foundation to return to a growth stage.