OlympusOpticalCo
Olympus Optical Co. Ltd Case Report
1. Why did Olympus get into trouble in the mid-1980s? Was Olympus response appropriate?
Olympus got into trouble in the mid-1980s due to both internal and external reasons.
From a company internal standpoint, the following reasons were the main concerns:
Poor product planning, leading to lack of hit products and to the inability to keep the pace with quick technology changes.
Quality problems seriously affecting the company´s reputation.
From a company external standpoint, the following reasons could be outlined:
Appreciation of the yen, creating more difficulties to sell the products overseas.
Low-growth period for the industry. Both prices and benefits for the industry dropped.
Shift in consumer preferences from SLR cameras to compact cameras, which was a weak area for Olympus.
We believe Olympus response was inappropriate as coming very late in regards to when their profit started decreasing. Indeed, Olympus started losing money already in the mid-1980´s but they did not take actions till 1987 with the three year program, while the implementations of such programs take time.
Olympus responses were focused on both internal and external factors but they were not designed well enough to counteract the negative consequences listed:
Olympus did not take advantage of their technology innovation properly as stated in the case where Olympus has technological superiority in the compact market through the early innovation of compact zoom and autofocus lens. Olympus did not capitalize on this innovation and allowed competitors to capture large market shares in this space thereby cutting into Olympus’s bottom line.
Olympus failed to predict market preferences and ended up losing out in the compact market to competitors. This coupled with quality problems caused their reputation to suffer.
Olympus was slower to react to market trends. This meant that Olympus lagged behind its competitors in areas of innovation, price cuts and
1. Why did Olympus get into trouble in the mid-1980s? Was Olympus response appropriate?
Olympus got into trouble in the mid-1980s due to both internal and external reasons.
From a company internal standpoint, the following reasons were the main concerns:
Poor product planning, leading to lack of hit products and to the inability to keep the pace with quick technology changes.
Quality problems seriously affecting the company´s reputation.
From a company external standpoint, the following reasons could be outlined:
Appreciation of the yen, creating more difficulties to sell the products overseas.
Low-growth period for the industry. Both prices and benefits for the industry dropped.
Shift in consumer preferences from SLR cameras to compact cameras, which was a weak area for Olympus.
We believe Olympus response was inappropriate as coming very late in regards to when their profit started decreasing. Indeed, Olympus started losing money already in the mid-1980´s but they did not take actions till 1987 with the three year program, while the implementations of such programs take time.
Olympus responses were focused on both internal and external factors but they were not designed well enough to counteract the negative consequences listed:
Olympus did not take advantage of their technology innovation properly as stated in the case where Olympus has technological superiority in the compact market through the early innovation of compact zoom and autofocus lens. Olympus did not capitalize on this innovation and allowed competitors to capture large market shares in this space thereby cutting into Olympus’s bottom line.
Olympus failed to predict market preferences and ended up losing out in the compact market to competitors. This coupled with quality problems caused their reputation to suffer.
Olympus was slower to react to market trends. This meant that Olympus lagged behind its competitors in areas of innovation, price cuts and