Nikon Revs Shrink Fast, Attempts Save Through Consolidation

Nov 14, 2020 | Editorial, News, Nikon

Nikon’s video and camera business shrank 40 percent in revenues to about $1.4 billion. In its current configuration and product mix, that meant hundreds of millions of dollars in net losses. Its CEO indicated in an interview yesterday that the firm hopes to shrink its camera business to make a profit at that $1.4 billion mark, helped along with staff cuts, factory consolidations and melding sometimes unwieldy sales organizations that have previously been broken up by country.

The company intends to release three new mirrorless bodies in the first half of 2021, and the CEO’s comments may through cold water on rumors – as fresh as yesterday – of a new DSLR to replace the D850.

Over many decades, the Japanese dominance in the camera market has led to industry norms conforming to Japanese corporate structures that are seen less commonly in other industries. Japanese corporate headquarters will often incorporate a new entity in each major national market it serves, calling these “sales organizations,” that market products more in line with local cultural norms and – importantly – serve as shock absorbers for both profit and currency fluctuations.

That structure has been one of the causes for some manufacturers to gain poor service reputations in some countries, as outsourced sales companies tend to care less about service relationships. Canon and Nikon have managed to earn good service reputations, in part through special professional membership programs. But the inherent inefficiency of additional bureaucratic structures appear to be one target of current cost cutting.

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