Olympus America Inc.

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Olympus America Inc.

also known as: olympus founded: 1968

Contact Information:

headquarters: 2 corporate center dr.

melville, ny 11747 phone: (516)844-5000 fax: (516)844-5930 url: http://www.olympus.com

OVERVIEW

Olympus is a well-known company that has led in the development and introduction of lightweight single lens reflex (SLR) cameras. The company also claims an 80 percent share of the world market in endoscopes, which are being used in a wider range of surgical procedures and industrial applications, in contrast to the diagnostic applications that have dominated up until now. The camera division faces increasing competition with the introduction of advanced photo system (APS) and digital camera formats.

Olympus' products include 35mm, advanced photo system and digital cameras, microcassette and digital voice recorders, optical disk drives, CD-recorders, medical and industrial endoscopes, biomedical and industrial microscopes and measuring instruments, clinical analyzers, and other high technology products. Formed in 1968, Olympus America is also generates sales in Canada, Mexico, the Caribbean, and Central and South America.

COMPANY FINANCES

Domestic net sales in 1994 were 80.8 million yen; in 1995, 86.9 million yen; and in 1996, 95.1 million yen; an increase of approximately 18 percent between 1994 and 1996. Overseas sales in 1994 were 158.7 million yen; in 1995, 165.1 million yen; and in 1996, 160.9 million yen; an increase of approximately 1 percent between 1994 and 1996. Total net sales in 1994 were 252 million yen; in 1995, 256.1 million yen; and in 1996, 310.4 million yen; an increase of approximately 23 percent between 1994 and 1996.

ANALYSTS' OPINIONS

According to Susan Moyse, industry consultant for Info Trends Research Group, Inc., "The digital camera market is developing at a rapid pace." She predicted that the market would grow from $422 million in 1997 to $1.13 billion in 2002. Olympus seemed ready to succeed in this new market segment, winning rave reviews from trade magazines in product tests.

HISTORY

Olympus had its roots in Takachiho Seisakusho, which was founded in 1919, and in the same year introduced Japan's first microscope. In 1936, the company applied its optical technologies developed in its microscope business to the production of cameras. The company's initial effort to penetrate the consumer product market with photographic cameras was interrupted by World War II. It was not until the mid-1950s that Olympus had its first major success with compact cameras, which allowed double the number of pictures per roll by using half the normal frame of 35mm film. The company grew rapidly and Olympus became a household name. Olympus also shifted its focus gradually over the years from microscopes into other medical equipment.

STRATEGY

Olympus was fortunate to enter the medical-optical equipment market at a relatively early stage. These products emerged as the primary earner for the company, replacing cameras. In 1997, the company derived approximately half of its total turnover and a large percentage of its gross profit from endoscopes and other medical equipment.

In order to reduce its excessive dependence on the sale of endoscopes, the company expanded its product focus to include information equipment, most notably high-speed printers, magneto-optical (MO) disk drives, and laser-based bar-code scanners. None of these products was a significant source of earnings for the company in the late 1990s.

INFLUENCES

In 1993 sales of endoscopes suffered when the Clinton Administration set out to overhaul the government medical insurance programs in the United States. In short, the proposals pointed to reduced insurance coverage of some surgical treatments, which in turn meant that the uses of certain types of surgical equipment, including endoscopes, would decline sharply. While the Clinton proposal never officially made it to Congress, U.S. hospitals reduced their endoscope purchases. The trend reversed moderately in 1994 when it became apparent that no major changes to the U.S. health insurance programs were forthcoming.

At about the same time health maintenance organizations (HMOs), which manage groups of hospitals in order to gain a better overall utilization of hospital facilities and to better control operating expenses, became the dominant force in U.S. health care, tightening the reins on major surgical equipment purchases by hospitals.

CURRENT TRENDS

In Japan, the market for endoscopes lagged behind the United States and Europe by a substantial margin, due mainly to public medical insurance programs that cover only limited uses of this equipment. The types of endosurgeries that qualify for coverage under the programs were being expanded gradually by 1997, however.

While domestic sales of Olympus' microscope division decreased in 1997, exports increased. Research projects in biotechnology and genetics were increasing, and sales of bio-microscopes were strong. In contrast, demand for microscopes from the semiconductor industry was waning, and sales of this type of microscope declined in all geographic areas except for Taiwan, Korea, and Thailand.

The company's 1998 forecasts expected profits to continue to expand due to increased sales of cameras, endoscopes, and personal computer (PC) peripherals. There are about 20 other companies producing digital cameras, including Canon, Ricoh, Sony, and Sharp, suggesting the company will find stiff competition. Still, increases in camera exports are expected. Endoscope exports are also likely to rise, given that endoscopic technology became an integral part of medical services in developed countries in the late 1990s. Endoscopic demand has increased in Europe and the United States, as well.

FAST FACTS: About Olympus America Inc.

Ownership: Olympus America Inc. is privately owned by Olympus Optical Company Ltd. in Tokyo, Japan.

Officers: Sidney Braginsky, Pres.; Yasou Takeuchi, CFO

Employees: 1,500

Principal Subsidiary Companies: Olympus America is a subsidiary of Olympus Optical Co. of Tokyo, Japan.

Chief Competitors: Olympus competes worldwide with a range of companies that distribute products for consumer, scientific, health care, commercial, and industrial markets. Some primary competitors include: Eastman Kodak Co.; Casio Inc.; Chinon; Ricoh; Polaroid; Fuji Photo Film USA Inc.; Minolta; Epson America Inc.; Dycam Inc.; Philips; and Sony Corporation.

In the late 1990s, Olympus' sales of magneto-optical disc drives and digital cameras were expanding rapidly, while sales of microcassette tape recorders remained stable, and bar-code related products were regarded as an area promising future growth. In 1998, according to Olympus Optical's annual report, digital photography was quickly becoming one of the company's core businesses.

PRODUCTS

The company's products are sold by digital dealers and distributors such as Ingram Micro and Tech Data. In 1990, Olympus introduced the world's smallest and lightest weatherproof 35mm camera, the Infinity Stylus Zoom 115. By the late 1990s, the company's Stylus Series was used by more than seven million photographers. Olympus also introduced the lightweight, compact D-500L and D-600L digital cameras in October 1997, and launched the ES-10 SCSI film scanner for 35mm and advanced photo system film.

In another coup for the company, PC/Computing rated Olympus' D500L the top digital camera for home use in a June 1988 product test. "It was the clarity and crispness of the D-500L's photos that won us over," the magazine reported. Two months before, Olympus unveiled a new line of virtual display eyewear that fit like eyeglasses for about $500, putting such futuristic technology within the reach of many consumers. First-class passengers on some Japan Airlines Co. Ltd. flights were among the first to get a chance to try out the equipment.

CORPORATE CITIZENSHIP

Since 1982 Olympus has actively supported the World Wildlife Fund's mission with funds and equipment. Also, they developed a CFC- and trichlorethane-free cleansing system to eliminate harmful cleaning agents from all its production plants. Olympus is also seeking measures to reduce waste and to use resources more efficiently in the packaging of its products, while improving the materials used to pack products for shipping.

Olympus supports various educational and philanthropical institutions as well. For example, the company has been sponsoring the Student Microscopy Contest since 1959. Other academic societies the company supports are the Endoscope Society Congress, as well as academic gatherings in Japan and elsewhere. Olympus also supports the Yamagiwa/Yoshida Foundation, which itself supports cancer research sponsored by the Geneva-based Unio International Contra Cancrum (UICC); operation and management of the Photo Gallery; and addresses social issues in corporate advertisements.

After the bombing of the federal building in Oklahoma City, Olympus America shipped industrial endo-scopes by air to help in rescue efforts. According to its 1998 annual report, "Olympus aims to fuse corporate and social objectives by developing beneficial products that create value and improve the quality of life."

CHRONOLOGY: Key Dates for Olympus America Inc.

1919:: Established as Takachiho Keisakusho to manufacture microscopes
1921:: Olympus first used as a brand name
1936:: Develops photography equipment and introduces the Olympus camera
1948:: The Olympus 35, Japan's first 35mm camera with a lens shutter system, is introduced
1949:: Takachiho becomes Olympus Optical Co., Ltd.
1959:: The Olympus Pen half-frame camera brings Olympus their first major success in cameras
1968:: Olympus Corporation of America is established
1969:: Introduces the world's first microcassette tape recorder
1977:: Olympus Camera Corporation is established in the United States
1983:: Olympus Corporation of America and Olympus Camera Corporation merge to form Olympus Corporation
1989:: Olympus Technology Research Institute is established
1991:: The Infinity Stylus, the best selling camera in the world, is introduced
1994:: Olympus' endoscopic sales are hurt by restructuring within American health care
1997:: Introduces its Advanced Photo System camera and film

GLOBAL PRESENCE

Olympus' aggressive international strategy evolved into a global network. By 1997, exports accounted for more than 60 percent of Olympus's total turnover. The company's major markets included Japan, the United States, and Europe. Each account for roughly 30 percent of total sales. Olympus Europe (OE) was established in 1963 and by the late 1990s had a total of 18 subsidiaries with approximately 2,500 people from 26 nations in sales, service, research and development, and manufacturing. Olympus Japan Co., Ltd. is in charge of sales and after-sale service of Olympus products in every region of Japan. Established in 1988, Olympus Hong Kong Ltd. has expanded its operations into mainland China.

SOURCES OF INFORMATION

Bibliography

bertolucci, jeff. "film free photos." pc/computing, june 1998.

hara, yoshiko. "olympus promises improved ergonomics, visual impact of a 62-inch screen for around $500—'face-mount' virtual display fits like eyeglasses." electronic engineering times, 27 april 1998.

hill, jonathan. "just one step away." pc magazine, 4 february 1997.

"olympus announces es-10(tm) scsi film scanner." pr newswire, 4 november 1997.

"olympus introduces the newpic zoom 90 advanced photo system camera compact, slim body with a 30-90mm 3x zoom." pr newswire, 18 november 1997.

"olympus introduces very affordable lightweight binoculars; the very portable, compact 7x21 pciii." pr newswire, 17 november 1997. "olympus' new cameras tout zoom capabilities." pc week, 15 september 1997.

parpis, eleftheria. "warning! lots of words. kirshenbaum breaks the rules for olympus." adweek eastern edition, 9 october 1995.

stone, david. "olympus sys.230 universal: olympus powermo 2600/scsi." pc magazine, 6 may 1997.

wiener, grota. "heave-ho silver!" pc magazine, 7 january 1997.