For Sharp CEO Doug Albregts, the Future Is the Smart Office and Enabling Information Flow commitment. It’s mostly flipped the other way with most of our competitors. The litmus test for those partners who want to engage with us is this: how much do they want to diversify? How much do they want to change their business and grow with us? A lot of them seem to want to do that because they don’t see the longevity of just staying copier- or document-imaging only. They know they have to diversify their business. We want to be the go-to partner to help them do that. Our whole goal is centered around facilitation. For example, we moved our entire back end, logistics and credit to Tech Data. It gives dealers a single place and portal to integrate third-party products. It will also allow Foxconn to deliver its other technologies and products, on one invoice to a location, to help diversify our dealers’ offerings. Will Foxconn’s considerable manufacturing assets help Sharp in terms of costs or product capabilities? ALBREGTS: Yes. Foxconn is north of $150 billion in revenue. Sharp is in the high $20 billion range. The company will bring scale, and it is looking very closely at how we manufacture products today and how we can drive a lower cost without sacrificing quality. What’s best is that Foxconn is looking at how we can put more features and technology into the product. We don’t have a competitive A4 product. Foxconn will change the whole market dynamic by giving us the ability to enter into A4 and lower-end A3 categories, where we didn’t have competing products. We are looking at other product categories and enhancements that I can’t get further into detail on—things that we didn’t have a few years ago. We think Foxconn will provide us with a tremendous advantage. The question is not running into it too quickly and making sure we’re doing all this right. Have you seen dealer pushback from moving to the Tech Data portal or the Foxconn acquisition? ALBREGTS: Whenever you move almost 400 dealers to change anything, it’s never going to be perfectly smooth. It was a little bit rocky to start. We had some shipping problems, moving people over to the new credit arrangement, those 28
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types of things. But our damaged shipment rates, for instance, have been cut in half. We’re now shipping out of five locations instead of two. We used to have many out-of-region shipments, but now that’s been improved by having inventory in five locations. In addition, it took on average about seven to thirteen days to get our product. Now most places in the country are getting it between one and three days. Most dealers’ credit lines have actually been raised as a result of Tech Data doing credit. Tech has over 20,000 partners that it provides credit to. Tech Data’s exposure and risk is much more minimized than ours. The move to Tech Data now is very well received. Dealers go to one portal. They have access to third-party products, which they couldn’t have accessed before on the same invoice. As an example, if they want to buy Tech Data’s mobile telephony platform and sell subscriptions to that, they can do that through the third-party portal. It has turned out to be a tremendous asset. The Foxconn investment has brought a sense of relief, because the financial cloud hanging over our head due to Sharp Corp.’s financial difficulties was turned into a big plus quickly. We’ve only heard good things, and we’ve been able to show our dealer advisory council roadmaps of new products that are coming out. They see this as a tremendous opportunity to get access to products and software to do integration that they never had access to before. We want to be a better, an irresistible partner. Foxconn’s reputation only emphasizes that. What are you focusing on to keep Sharp competitive in the coming years? ALBREGTS: Filling out the product line. To have a smart office, you’ve got to have a product line that gives flexibility to that office. It’s not a onesize-fits-all. We found that in the display category. One of the first areas where Foxconn helped us is building out our display portfolio. Now we have a good, better, best strategy around displays. We have interactive, wireless whiteboards that connect to the cloud. You can annotate on these whiteboards and send the information to a copier. You can move it to other interactive display devices that
might be on the desktop. We want to make sure that we have product to fill all the categories. Candidly, in the copier space we haven’t done a good job of addressing all those categories for our dealer base. You can quickly move yourself out of a bid if you don’t have competitive products that fit in every single category. We’ll enable more options in all categories in the smart office space. What changes are you making to your channel partner program or what additional resources are you providing to help support the smart office strategy? ALBREGTS: We’re going to get very, very simple and easy to understand. Dealers need to know what’s available to them to help grow their business and easily understand what their net margin is on copier purchases. I don’t think manufacturers do a very good job of that. You’re going to see us also provide more investment money up front in our programs. Too much of the onus is put on the dealer to perform and get something in return for that performance, as opposed to an up-front investment. That’s how we’re going to tailor a lot of our programs. Another thing is that we will incorporate all those products I talked about into our programs and make them available to order off of the Tech Data portal, along with all of the third-party products, which will be included into our programs in some form or another. We want to drive the ability to grow with Sharp. No matter what product in our portfolio they sell, we’ve got to put our dealers in a position to succeed. Today, our programs are a little too complicated to do that effectively. Our goal is to become number three in the document space and number one in the commercial display market. To get there, we have to invest more, diversify and grow our opportunities. What do you see as your biggest opportunity and biggest challenge for 2017? ALBREGTS: It’s around the smart office. I keep coming back to that because for us it is the space to be. The biggest challenge is, number one, doing it correctly right out of the gate. That’s harder when you have a lot of resources at your
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