Strengths and weaknesses as a dedicated connector manufacturer

Tanaka: In discussing the future of the company, I’d like to start out by asking you what you see as our strengths and weaknesses as a dedicated connector manufacturer. We have also entered the switch and sensor business sector. What are your thoughts on business expansion of sensor-related products such as modules combining sensors and connectors?

President Ishii: I think the first thing to consider is our own position as a component manufacturer. Component manufacturers are involved in diverse markets, and one of our strengths is our ability to create our own strategies and select from a wide range of options. Set manufacturers supplying products such as advanced consumer devices are struggling to meet the changing times, and I think this highlights the tremendous advantage we enjoy as a component manufacturer. Furthermore, given the tide of computerization and motorization of devices (ICT), our “connection business” is seeing steady growth. Connectors need to be provided in the form of advanced solutions to meet wide-ranging needs, and as difficult as it is to manufacture components they are becoming a business sector which cannot be easily copied. Even if a new company were to enter the market, in the “connection business” it is extremely difficult to achieve business success, so I believe we enjoy a very strong position.

Tanaka: What do you believe our disadvantages are as a dedicated manufacturer?

President Ishii: Until now Hirose Electric has, as a dedicated manufacturer, focused exclusively on connectors, switches, and sensors as isolated products. However, customers now seek comprehensive solutions that include systematic proposals. This is why we need to thoroughly explore how we can provide our customers with system solution proposals that connect various devices and modules. It is precisely because of these difficulties that it also presents opportunities. There is a growing number of customers that are oriented more towards software and services than hardware, but at the same time hardware demands are growing more professional. Meeting these requests is a major endeavor. As you said, connector and sensor combinations, connector and switch combinations, and relations with other devices are extremely important.

Tanaka: In my work as a concept designer, I have felt that it is becoming increasingly common for customers to discuss the potential for Hirose to provide added value by including sensors.

President Ishii: In the future we will continue to find approaches which create greater opportunities for our customers to provide us with information. At the same time, our customers may not always have all the answers. That is why we also need to think harder ourselves and produce our own ideas. If we don’t, we won’t be able to meet our customers’ needs. As you say, we may need to move forward with modularization, but practically speaking that would be difficult for us to handle entirely on our own. This is the reason for the great importance of our marketing activities, meeting needs from the perspective of the “3C (Customer, Company, Competitor) plus 1C (Co-operator)” approach, which the entire company is implementing as one. Strengthening relations with co-operators will be an important element in Hirose Electric’s future success. That’s because producing high level proposals on our own is extremely difficult.

Organization structure aimed at producing new technologies

Tanaka: As we take on business challenges, including efforts such as our sensor efforts, our typical approach is for sales personnel and concept designers to visit customers, and to develop ideas which the engineering divisions refine into products. However, creating the entire process, including the acceptance of ultimate manufacturing requests by factories, is difficult, and I feel that in many cases the engineering divisions end up having to handle everything on their own. I think we need an organization that can take on projects in these new fields in an integrated fashion. What do you think?

President Ishii: As you say, it may not be feasible to achieve major growth based on our existing methodology. However, I think that we need to dive in and look deeper into these new business sectors. For example, with respect to sensors, we need to closely examine on what grounds we will compete. Once we have identified that, then we can actively deploy resources. Factory capacity is a current business issue, and from the standpoint of taking on new technologies, as well, I think it would be extremely difficult to achieve success while maintaining our current organization and structure. Identifying challenges in the market 5 or 10 years from now will require a great deal of thought. People, however, are not nimble enough to develop future approaches while at the same time working under the status quo. Normally this would be a task for top management, but I’m convinced that we need a dedicated team for considering the company ten years into the future. We are in an era in which success is not possible without making predictions and taking action based on these predictions. I think we will need to create a dedicated team or organization in order to secure Hirose’s future.

Tanaka: I hadn’t heard you mention anything before about the need to create a dedicated team, so I’m very glad to have had this opportunity to discuss the issue with you. You’re right, it’s not unusual to find yourself overwhelmed by the work immediately at hand, but I would like our generation of employees to be able to provide a great deal of input as well.

President Ishii: Single product sales are becoming difficult. Other companies in our industry are becoming massive as the result of mergers and acquisitions and the like. We, on the other hand, wish to skillfully collaborate with outside partners and to improve our proposal capabilities. That’s why it’s important for us to be even more receptive to new information. It’s important for technical personnel who often go to customer sites, such as yourself, to have broad-ranging experience and be exposed to a great deal, and I hope that whenever you develop new ideas you create and verify new hypotheses. However, it’s hard for technical personnel to discuss crazy ideas in front of customers, and that’s when the abilities of sales personnel should be leveraged. If sales personnel propose “A,” technical personnel can say “B,” and customers would suggest “C or D” – if everyone can keep the conversational ball rolling – then conversations can grow to be more broad-ranging, leading to new ideas being created. Please get sales involved and keep moving forward.

Tanaka: I’ll definitely make sure sales personnel are an integral part.
Thank you.