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Panasonic's Taylor Outlines Near Future

1/23/2012 12:01:00 AM Eastern

LAS VEGAS — Joe Taylor, Panasonic Corp. of North
America chairman/CEO, outlined
his company’s strategy
to expand its role in electronics
beyond the A/V business
in the near future, plans for its
TV business and industry profitability
during a one-on-one interview
with the TWICE during
International CES.

Panasonic North America is
projected to make a profit by
the end of the fiscal year, ended March 31. It will
happen with CE sales being lower, but with higher
sales on its B-to-B side. Here is part of the conversation
with Taylor we had at Panasonic’s CES booth.

How much of your business is consumer vs.
B-to-B now, and where will it be in the future?

Taylor: Globally, consumer sales are 50 percent
of our revenue. In North America we were close to
that in revenue five years ago, and that was without
major appliances. Today that ratio is significantly
less [in CE] due to our focus on the B-to-B business.

What does that mean for Panasonic’s consumer
business in North America?

That does not imply that we are walking away from
the CE business, but sales there will lessen as we
go into the near future. Also, we have no intention of
bringing home appliances into the U.S. at this time.
Those products [for Japan] are smaller than what
would be needed in the U.S. and higher priced. The
focus in the short term — the
next two to three years — will
be with the B-to-B side and
then come back [with an emphasis
on] the consumer side.

How do you calm fears
on the part of retailers who
think you are backing out of
the CE business?

Taylor: Our core DNA as a
company is in CE. Because of
technology we developed on
the B-to-B side we have more
technology in CE. But we must
be smarter in CE and not sell products that do not
have value.

We will be in the TV business, but that doesn’t
have to make all the components. We can source
them less expensively. [And] you will see in 2011 a
reduced portfolio of TVs, reduction of our SKUs in
smaller plasma sizes, expansion in larger plasma and
an expansion in LCD. Ninety percent of our line will
feature 3D, 94 percent will feature smart TVs. We
want profitable growth from value-added products.

How can manufacturers take control of MAP
pricing? Offer different lines to different retail
channels? Open boutiques within stores?
Open your own stores?


Taylor: They are all valid points but represent a
larger issue — there is a gap between consumers,
retailers and manufacturers. And the gap concerns
me the most the manufacturer and the retailer …
sense that we are not in this together. When you talk
MAP, what is the relationship between retailers and
the manufacturer?

We have no intention to open up stores. Unless
your name is Apple, it is crazy. But we do need to
have a relationship with the ultimate customer, the
consumer.

In the past five to seven years
manufacturers [and retailers]
feel all the industry’s problems
were dumped on them.
We intend to make money on
everything we sell. We want it
to be clearly understood that
we want to make a profit and…
we want our retail partners to
make money.

I am pleased as we go into
this new model year that meetings
with our main retail partners
that there is a real sense an understanding of
this.

Some retailers complain that Panasonic has
undercut its own MAP pricing on your sales
site online. Has that happened?

Taylor: Our web sales, though improved with a
new web site, are insignificant. If, and I mean if, a
price of Panasonic product is lower by one day, is it
affecting a retailer’s business? Our sales are 99.9
percent from our channel partners. Is the 0.1 percent
affecting their business? I don’t think so. We
want our sell more products and make a profit, and
we want our retail partners to sell more and make a
profit, and have consumers get excited because they
have bought our products.

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