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03-16-2013, 08:30 AM   #331
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Not possible, when you're too busy complaining.

03-16-2013, 04:19 PM   #332
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I'll be just a bit responsive here, but I've written about this for over a year throughout this Forum. I believe it is healthy to try to understand Pentax as a business unit of a large corporation and to reflect on their actions in the context of stakeholder analysis. Customers are not the only stakeholders considered when making business decisions, nor is the immediate term the only term cosidered.

Pentax isn't perfect, but their decisions are at least understandable in the context of Ricoh's larger business circumstances, and the lingering effect of decisions and structures made by former PRIAC leadership no longer in place. These are my opinions, based on extensive reading and many years of experience in my field. I respond well to rational argument based on facts and reality. I don't respond well to invective and sarcasm.

UPP Benefit ONE - B&M stores can stock product (just one example linked) against a price-managed internet competitor but can't compete against high volume low overhead competition. Physical stocking in local markets is good for the brand long term. It takes more than just price management to induce stores to stock (I posted about this recently on another thread) but price management is essential.

UPP Benefit Two - Pentax Canada can stock product. PRIAC was disrupting literally the entire western world's distribution with its pricing laxity. It is not difficult to imagine the other regional distributors complaining about PRIAC and their BigBox distribution and pricing strategy.

UPP benefit Three - Pentax Ricoh Imaging can stabilize its business and begin re-establishing its brand identity - and doing the things such as warranty extension we all want. Stability has to come first, then they can implement changes in a planned, measured and prudent fashion, over a longer time horizon. Pricing is Strategy, products are Tactics. Strategy is driven by longer term corporate needs as well as shorter term customer needs - there is a balance. Tactics (products) are driven by short term customer needs and competitive brand positioning. Products are a tool of Strategy.

UPP was installed to shock the system and forestall a truly disastrous emerging trend. James Malcolm is developing a broad, long-term business strategy for the Americas. Speaking directly to interested customers is ONE part of his information gathering process. Ricoh will commit some certain amount of capital to a long-term market and product development plan as time and circumstances permit, most of which are global in nature. US customers are not yet accustomed to the notion that the world market no loner revolves around our every whim. In 1970 67% of World Gross Product was in US markets. Today that number is about 20% (or the EU combined is about the same). China is second, at about 10%, Japan is third at about 7%, and so on. Canada is a bit more than 10% the size of the US. Pentax market share in other regions exceeds that in the US (for inbstance, in France Pentax has approximately a 20% market share, I believe). Other global regions are growing much faster than the West. PRI isn't about to let the US destroy 90% of the world's distributor relationships by poaching their sales with uncontrolled low prices. Loss of some sales in the USA due to UPP just doesn't matter as much as it once did.

When readers understand the relationships between a corporate Income Statement, Balance Sheet and Statement of Changes in Financial Position - as expressed by US Generally Accepted Accounting Principles - they will at least have a less emotional response to changes that disadvantage them personally. There is a bigger picture than just the individual Household.

Readers who generally do not accept the validity of capitalism and the integrity of corporatism will have a very difficult time understanding Pentax in the context of these principles. Their main concern is that Pentax gives them that to which they feel entitled, at a price which they are willing to pay. If Pentax does otherwise these customers become aggrieved and lash out at Pentax. Pentax can do no right.

Whatever Pentax business strategy emerges may look irrational to USA customers for these and other reason, but it may be perfectly rational and healthy from the perspective of a global corporation.

No further comments will be made.

Last edited by monochrome; 03-16-2013 at 08:02 PM.
03-16-2013, 05:13 PM   #333
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I hope you didn't saw my post as an attack on yours. I was just pointing out (OK, in a sarcastic manner, as a response to the others' sarcasm) that some people from this forum don't seems to be interested in such useful insight, preferring to complain instead. You, personally, weren't complaining about anything.

I believe some of the new prices are way too high, so I understand people's dissatisfaction; however this doesn't mean UPP in itself is bad. What they did in the past didn't work, they lost a lot of ground; as you're pointing out the first step is to have a working mechanism, and then to use it well. Of course, UPP by itself is one tool with a specific function, not a complete strategy.
I'm living in another continent so I'm not really affected by this, but I hope we'll see more signs that UPP is working (and normal prices for the 16-50&co ).

Have a nice evening.
03-17-2013, 07:53 AM   #334
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Seems to me, if a company doesn't give customers what they want, that company will loose their customers to the competitor who will. Customers drive business not balance sheets. A happy customers equal more sales. Balance sheets will reflect this.

03-17-2013, 08:01 AM   #335
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QuoteOriginally posted by monochrome Quote
Whatever Pentax business strategy emerges may look irrational to USA customers for these and other reason, but it may be perfectly rational and healthy from the perspective of a global corporation.
Profits drive business. More sales does not directly relate to more profits. Much as we'd like it, Pentax isn't

Last edited by monochrome; 03-17-2013 at 09:13 AM.
03-17-2013, 09:43 AM - 1 Like   #336
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How much profit does a company without customers have?
03-17-2013, 10:28 AM   #337
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QuoteOriginally posted by monochrome Quote
I'll be just a bit responsive here, but I've written about this for over a year throughout this Forum. I believe it is healthy to try to understand Pentax as a business unit of a large corporation and to reflect on their actions in the context of stakeholder analysis. Customers are not the only stakeholders considered when making business decisions, nor is the immediate term the only term cosidered.

snip
While what you say may apply to the USA, the picture looks very different from where I am, in Europe.

Here, there is no resale price maintenance, it's illegal. In my own country - maybe not elsewhere in Europe - the B&M dealer system has been shot to pieces and is finished. That leaves a tiny handful of specialist stores and the big electronic goods retail chains which are themselves looking extremely green at the gills thanks to onlne sales. Pentax here is vanishingly hard to find unless you know where to look. I can find Pentax on the website of the country's biggest electrical goods chain but so far not in the branches I have visited. These look to be in quite a large part web sales only.

Pentax UK has an excellent and lively Facebook page and they run some good advertising and competitions too. But my overall impression is that Pentax here lacks the manpower and the money to be more than a small distribution hub - and I would be very surprised if the same wasn't the case in many other countries in Europe.

This may all sound news of no consequence from a far-away country were it not that what is happening here will happen in North America sooner or later if "business as usual" remains the default setting. The reason is that so far as I can see, in the electronics goods retail biz, it's all about size and scale and that demands a lot of money. Thus if you want to play in the same game as the big players, you need to produce a minimum stake. No matter how good your product may be, no retailer is likely to go with you unless you can produce the sales and marketing network, the stock, the turnover of new products, the fulfilment and the marketing millions which support the retailer directly and indirectly. That's the minimum stake. If you can't produce it, why should any retailer bother with you when Canon, Nikon, Sony, Olympus, Panasonic, Samsung and god knows who else are queuing up outside the door with a battalion of sales reps and tens of millions of instore marketing support? Even if the other companies are losing money hand over fist, you still can't get your stock in the door.

I don't see any way round this. It's a case of produce the grub stake or leave the game because otherwise the game will leave you. This was the #1 question when Ricoh bought Pentax and it still is today. It goes back to a question some of us have been asking for a long time now. Is Pentax 1) a Japan-focused company which exports products around the world on something of an arm's length consignment basis, or 2) is it an international company active in many markets but whose home market happens to be in Japan? Imho, the answer to the grub stake question hinges on this. So far I am bound to say it looks as if Pentax is firmly in option #1 because without some very evident investment option #2 will never happen. But if option #2 doesn't happen then it's hard not to think that Pentax will be slowly but surely squeezed out of the game. Since Ricoh's executives surely know this, I'm finding it very, very hard to work out why Ricoh bought Pentax and what they hope to do with it.

Last edited by mecrox; 03-17-2013 at 11:40 AM.
03-17-2013, 10:56 AM   #338
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QuoteOriginally posted by mecrox Quote
While what you say may apply to the USA, the picture looks very different from where I am, in Europe.

Here, there is no resale price maintenance, it's illegal. In my own country - maybe not elsewhere in Europe - the B&M dealer system has been shot to pieces and is finished.
Pretty much the case here, too. There's about 1.5 to 2 million people living withing 20 miles of here, and there's one B&M store that carries Pentax in that area. I consider myself lucky, actually. I'm aware of one other B&M non-chain store in that same area, that does not carry Pentax. There might be more but a quick google search says no.

There's one large electronics store chain around here that allegedly carries Pentax, but in reality there's sometimes an entry level camera there, sometimes not in my experience. I've never seen a K-5 or equivalent there. There's also another camera store chain around here that's been through bankruptcy at least once and doesn't look to be in good shape.

03-17-2013, 11:10 AM   #339
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QuoteOriginally posted by mecrox Quote
I don't see any way round this. It's a case of produce the grub stake or leave the game because otherwise the game will leave you. This was the #1 question when Ricoh bought Pentax and it still is today. It goes back to a question some of us have been asking for a long time now. Is Pentax 1) a Japan-focused company which exports products around the world on something of an arm's length consignment basis, or 2) is it an international company active in many markets but whose home market happens to be in Japan? Imho, the answer to the grub stake question hinges on this. So far I am bound to say it looks as if Pentax is firmly in option #1 because without some very evident investment option #2 will never happen. But if option #2 doesn't happen then it's hard not to think that Pentax will be slowly but surely squeezed out of the game. Since Ricoh's executives surely know this, I'm finding it very, very hard to work out why Ricoh bought Pentax and what they hope to do with it.
Pentax have been very firmly entrenched in your #1 category for some years now. It wasn't took long ago (but before Ricoh) that Pentax Forums interviewed a Pentex exec who seemed at most vaguely aware of Pentax Forum's existance, and for example, was surprised at the mention of PF's own complete Pentax lens database.

Since Ricoh, there have been some good signs about PRIAC (America). PRIAC management now has much closer ties to Japan. Yet 2012 was a tough year to be in the camera business, as far as I can see, and I wouldn't doubt if Pentax has been put on the back burner wrt financing. I agree Pentax has to change from it's Japan-centric mindset to survive as a DSLR camera company.
03-17-2013, 11:10 AM   #340
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mecrox: The USA market feels very much the way you have described the EU, despite retail price management. Rather than quote the entire post, you have stated in real, on-the-ground terms precisely what I have been writing about here for months. Frankly, Pentax might be well served to simply lease and staff small "showroom" areas in Box Stores and advertise, bypassing dedicated B&M distribution altogether.

The investment necessary to make Pentax competitive (as you describe) is so great that external Japanese financial analysts.consider the cost a threat to the investment thesis in Ricoh shares. It would cost so much money that it would materially alter the company's financial and cash flow outlook and might not yield a positive outcome. When this is pointed out here some posters bleat and rail against "Golden Boys" and capitalism, as if calling names will cause fiduciaries to act in a risky fashion to supply non-profitable items at a price they want to pay.

I've felt it might be helpful to explore what I understand to be the financial challenges - but perhaps it isn't helping.

That in no way means Ricoh won't make the long-term investment commitment to grow the brand. It does mean we can't blithely post here, "Me want x,Me want y" and expect Ricoh to roll over and just do it with no profit-making business rationale. Achieving their stated goal of "A strong third" is complex, challenging and will take a long, long time - and will probably require just a little bit of luck.

Last edited by monochrome; 03-17-2013 at 12:00 PM.
03-17-2013, 03:04 PM   #341
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Monochorme

If I told my customers that I was going to make some immediate business decisions to make my company stronger, and while those decisions were going to cost them money,without any immediate benefits to them, if they would just hang in there, things would get better for me in a couple of years and I would then be able to provide them with better service, value and products, this is what they would tell me.....

"Let us know when you've got your act together, and maybe we'll consider doing business with you again"
03-17-2013, 03:53 PM   #342
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You're talking as if we're giving money to them, for nothing; we're not paying for the Pentax investment program, but for their products. If they're not good enough for you, if they're not supported enough by quality services, as per your requirements - you don't have to buy. But there are people who buy; and their number will gradually grow while Pentax' strategy is being implemented.
IMO a quick effect strategy would be very costly, maybe even impossible to implement regarding how much $$$ they would put in. It should also be easier to assume small-scale risks, seeing what works and what not than to come up quickly with a fast growth strategy and implement it all over the world.
A fast growth strategy which would leave them bleeding red for years could also be unacceptable for Pentax' stakeholders - and I'd refer to monochrome's numerous posts on this subject. Unfortunately there is no shortcut.

I'd say we shouldn't look for anything dramatic, but for small signs of change. Pentax getting back in some B&M stores, the rumoured service centre in Cebu, pushing forward with their main DSLR systems and so on. We should keep in mind the state they were in, on 1st October 2011, when we're measuring their progress, because any singular item would probably look not terribly significant to us.
03-17-2013, 04:18 PM   #343
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QuoteOriginally posted by wildimages Quote
Monochorme

If I told my customers that I was going to make some immediate business decisions to make my company stronger, and while those decisions were going to cost them money,without any immediate benefits to them, if they would just hang in there, things would get better for me in a couple of years and I would then be able to provide them with better service, value and products, this is what they would tell me.....

"Let us know when you've got your act together, and maybe we'll consider doing business with you again"
So would I - which is why it is such a challenging business exercise and why I write the way I do.

In my own company we're going through a similar transformation - takeover, identity change, loss of executives and valued employees, culture change, financial downsizing, product change, customer loss (and some gains), despondency on the part of those who have stayed, poaching by competitors (daily recruiter calls to me and my team), etc, etc.

We look for quick wins while we rebuild, but they seem to be harder and harder to find. It will eventually be better than before the buyout, but that is still three years away; I don't expect major visible benefits until late this year.

Then the tide will turn and benefits will start coming in waves - but waiting is just awful.

Last edited by monochrome; 03-17-2013 at 04:25 PM.
03-17-2013, 04:36 PM   #344
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QuoteOriginally posted by monochrome Quote
It will eventually be better than before the buyout, but that is still three years away; I don't expect major visible benefits until late this year.
It's only a hunch, but I think that's spot on.
03-19-2013, 09:39 AM   #345
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QuoteOriginally posted by wildimages Quote
Monochorme<br />
<br />
If I told my customers that I was going to make some immediate business decisions to make my company stronger, and while those decisions were going to cost them money,without any immediate benefits to them, if they would just hang in there, things would get better for me in a couple of years and I would then be able to provide them with better service, value and products, this is what they would tell me.....<br />
<br />
&quot;Let us know when you've got your act together, and maybe we'll consider doing business with you again&quot;
<br />
<br />
Of course, which is why Pentax doesn't say so.
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