Okidata Group

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Okidata Group

founded: 1972

Contact Information:

headquarters: 532 fellowship rd.

mount laurel, nj 08054 phone: (609)235-2600 fax: (609)778-4184 email: [email protected] url: http://www.okidata.com

OVERVIEW

Okidata is a maker of computer peripherals, items that are attached to a computer. Its primary product is the dot matrix printer, but it has moved into laser printers, fax machines, and multi-function peripherals (MFP) as well. MFPs combine the functions of printers, fax machines, and copiers in a single piece of equipment. In December 1997, the company kicked off its twenty-fifth-year anniversary celebration.

COMPANY FINANCES

For the fiscal year ending in March 1998, Okidata Electric, the parent company, reported net sales of $5.8 billion. Sales in 1997 were $5.9 billion; 1996, $7.1 billion; 1995, $7.3 billion; 1994, $6.3 billion; and 1993, $5.5 billion.

ANALYSTS' OPINIONS

A sampling of reviews of Okidata products from late 1996 through mid-1998 showed mostly favorable results, with a few mixed reviews. For instance, the Okipage 4w Personal Printer, a laser printer, received high marks from Fortune and Business Week. The OkiOffice 44 MFP got a solid rating from Computer Shopper in April 1998. But PC/Computing in June 1998 gave the OkiJet 2020 color ink jet printer a middling review in its ranking of nine machines. Okidata products can almost always be found in "top" or "best" listings such as "Top 10 Printers" inPC World, and "Meet the Perfect Type: Seven Printers That Fit Seven Business Personalities," in Home-Office Computing.

HISTORY

In 1877, Kibataro Oki was working for the Japanese Department of Industry when it received samples of an astounding new invention introduced by Alexander Graham Bell in America the year before: the telephone. Four years later, in 1881, Oki founded his own telephone manufacturing firm, Meikosha Co. By 1917, the firm had adopted the name Oki Electric Co., Ltd. Oki began manufacturing a wide array of electronic instruments, and during the buildup of the Japanese military in the years leading up to World War II, it became a major supplier of communications equipment for the Army and Navy.

Following the war, Oki Electric was very nearly dismantled in an effort to decentralize the Japanese economy and thus make it less of a potential war machine in the future. But Oki, which in 1949 became Oki Electric Industry Co., Ltd., remained intact. During the 1960s, Oki Electric became part of efforts by the Japanese Ministry of International Trade and Industry (MITI) to encourage development of high-technology international industries. It also emerged as one of the so-called "Big Six," the most influential companies in Japan, all of them high-tech industries, along with Fujitsu, Hitachi, Mitsubishi, Nippon Electric Co. (NEC), and Toshiba.

Under the guidance of several MITI projects, Oki-data became involved in the emerging computer industry. Also in this period, Oki Electric entered into joint ventures with several American companies and increased its Latin American market. It established a software division in 1970.

In 1972, Oki Electric launched Okidata as a joint venture with two Philadelphia entrepreneurs who had previously supplied it with printer equipment. The new company became a leading supplier of dot matrix printers, and one of its most successful early products was the CP-210, a bank passbook printer. After a period of low profits and resultant restructuring in the late 1970s, Oki Electric consolidated its U.S. ventures into one subsidiary, Oki America, in 1984. Okidata, along with Oki Telecom and Oki Semiconductor, became a division of this subsidiary.

In the late 1980s and early 1990s, Okidata weathered another period of low profits for the mother company, brought on in part by the strong yen in Japan. Japan depended largely on the export business, and a "strong" Japanese currency meant that it took fewer yen to equal other currencies (such as the dollar). This cut into Japanese companies' profits, creating a disastrous situation for the Japanese economy. But by the mid-1990s, Oki Electric seemed to have recovered, and Okidata prospered as one of the leading competitors in the field of printers and computer peripherals.

In mid-1998, Okidata moved into its new 434,000-square foot, $30-million complex in Mount Laurel, New Jersey. The complex housed more than 600 employees and served as corporate headquarters for the company's American, Canadian, and Latin American operations.

STRATEGY

From the time of its founding in 1972 through the early 1990s, Okidata concentrated its efforts on the lower end of the printer market: dot matrix printers. With advances in printer technology in the 1990s, however, it increasingly moved into more advanced types of printers, including LED (laser), inkjet and laser jet, and color. However, it remained known as a maker of dot matrix printers, which continued to be in demand in markets where high text quality is not considered significant. A survey by Computer Reseller News in June 1995 found that a majority of respondents gave Okidata highest ratings for dot matrix printers, scoring higher than Epson, its chief rival in that market.

FAST FACTS: About Okidata Group

Ownership: The Okidata Group is a division of Oki America, Inc., which is a subsidiary of Oki Electric Industry Co., Ltd., a publicly owned company traded on the Tokyo Stock Exchange.

Officers: Bernard Herman, Chmn. & CEO; Dennis Flanagan, Pres. & CEO; James J. Hargadon, Sr. VP-Finance

Employees: 567

Principal Subsidiary Companies: The Okidata Group is a division of Oki America, Inc., which is a subsidiary of Oki Electric.

Chief Competitors: Okidata competes worldwide with makers of computer peripherals and other electronic devices. Its competitors include: Brother; Canon; Epson; Hewlett-Packard; IBM; Lexmark International; NEC; and Xerox.

However, the market is shifting. "Dot matrix printers have been Okidata's strength, but the growth area in printers is in the color ink-jet and laser markets," Hank Kim wrote in Adweek. Kim reported that in October 1997, the company launched a print and radio campaign, aimed at the small/home office market, advertising its printers and fax machines as "hard-working and reliable."

Okidata set a new standard for service in 1997, offering toll-free customer service and around-the-clock technical support. "We are the only printer manufacturer offering this depth of service to customers," said Joe Mangiaracina, Okidata's general manger for customer service and support.

INFLUENCES

Aside from its connection to its Japanese parent, the biggest influence on Okidata has been its competition. Among printer companies, the one that casts the longest shadow over Okidata is not its direct competitor in the dot matrix market, Epson, but industry giant Hewlett-Packard (HP). Computer Reseller News reported that the majority of business users surveyed preferred HP printers—excluding the dot matrix market—above all others. A 1994 survey by the same magazine found that HP was the hands-down favorite among printers, and that only Okidata showed any significant market gains against it.

CURRENT TRENDS

In the late 1990s, Okidata moved to capitalize on a major trend toward multi-function "all-in-one" peripherals, which combine the functions of a printer, fax, copier, and sometimes even scanner. This was expected to appeal to the growing market of home-based offices, where there would be high demand for a single, relatively inexpensive piece of equipment that would combine several functions.

Also recognizing the growing importance of the Internet, Okidata continued to expand its site on the World Wide Web, offering manuals, printer driver downloads, and 24-hour assistance online.

PRODUCTS

By 1997 Okidata had sold more than 10 million printers. It produces 9-pin and 24-pin dot matrix, color inkjet, and LED personal page printers. In addition to MFPs, it also markets plain-paper fax machines with a PC interface, and other accessories and support services. As part of its increasing move into laser printers to round out its dot-matrix-focused product line, the company introduced two Adobe PostScript printers, the OL-810/PS and the OL-1200/PS, in 1996.

With the price of printers going down and an up-surge of interest in higher quality laser and color inkjet printers, Okidata increasingly moved into this market in the mid- to late 1990s. Given the market environment, the company was forced to lower prices on some of its lower-end printers.

CORPORATE CITIZENSHIP

Okidata has a broad strategy embracing environmentalism. All its printers carry an Environmental Protection Agency (EPA) pollution prevention logo and, while idle, are designed to cut energy use in half. The company's line of LED page printers are environmentally responsible and are equipped with toner recycling systems.

CHRONOLOGY: Key Dates for Okidata Group

1881:: Kibataro Oki founds the telephone manufacturing firm Meikosha Co.
1917:: The company becomes Oki Electric Co., Ltd.
1948:: Oki is marked for breakup after the war, but remains intact
1949:: Incorporates as Oki Electric Industry Company
1954:: Enters into a joint venture with Raytheon to develop radar equipment
1962:: Begins working with five other companies to develop IBM-compatible mainframes for Japan
1972:: Okidata is established as a joint venture to create printers
1984:: Oki Electric consolidates its U.S. ventures into Oki America, of which Okidata becomes a division
1995:: Okidata is given the highest rating from customers for its dot matrix printers
1997:: Begins offering toll-free and 24-hour technology support to customers

The company also emphasizes recycling within its own operation, working with solid waste companies to establish markets for their recycled products. In 1996, Okidata collected more than 1,300 tons of waste for recycling.

The company also supports charitable and community efforts through monetary contributions, donations of new and used products, volunteered time, training and materials.

GLOBAL PRESENCE

Having opened a subsidiary in Brazil in 1997, Oki-data was considering producing copiers in this South American country in March 1998 as part of an overall plan considering opportunities across the Latin American market. As part of plans for expansion into Latin America, Okidata offers a page on its Internet site in Spanish.

EMPLOYMENT

Since it is only a division of a larger company, and has fewer than 600 employees, Okidata does not have as wide a range of available jobs as some major corporate entities do. However, a February 1997 article in the New York Times reported that it was one of a handful of New Jersey companies expected to create more than 1,000 new high-tech jobs in the state, according to Governor Christine Todd Whitman. New Jersey ranks seventh in the country for number of high-tech jobs, and second—behind only Washington state—for average annual salary.