GK sat down with Shiro Yahara, President of Pioneer Corporation, to discuss Japan’s enduring approach to monozukuri and the company’s push into intelligent mobility solutions
In your opinion, what is it that makes Japanese products so desirable? What gives Japan a competitive advantage?
For the last 30-40 years, Japan has been a leader in terms of monozukuri, which is pushed by the high rapidly growing economy, because the Japanese diligently refine their techniques and technology to produce high-quality goods. The Japanese have also never stopped being innovative and always continue to pursue equality and credibility, and the benchmark or foundation behind it is customer satisfaction.
You might have heard the phrase “Our customer is a god.” This applies to the Japanese mindset, which drives Japanese businesses to produce high-quality products for lower prices. Japan also has a unique approach to developing not only the products but also the process and method to make the products, following Toyota’s business model or production system, which is ‘Kaizen’, a continuous improvement. However, for the past one or two decades, the IT revolution has changed the landscape of the business setting around the world to speed up their improvement of productions in terms of quality, credibility, and cost.
Currently, Japan has a tradition of new innovations repeatedly coming out of businesses such as Honda and Sony. After the peak in the 1970s or 1980s, we haven’t seen much innovation or so-called ‘wow innovation’ until the 2000s, so it’s a relative competition against IT-driven companies such as Apple. To clarify, I only joined Pioneer in 2020, but of course, I knew a lot about Pioneer, which the founded product is a speaker, before I came into this business, and I know that they’ve always been innovative. Starting from the home audio system to the laser disk or the plasma tv and other leading products, like car information systems. Therefore, I think the company name, Pioneer, suits us quite well.
In light of the current semiconductor shortage and supply chain disruptions, how has Pioneer, a firm active globally, been adapting in response to these challenges?
In order to accelerate growth as a SaaS business, we did two things: one was to hire external experts. Because looking around internally, Pioneer has been very focused on monozukuri, hence not much focus, almost zero, on the service business. Hence, we had to hire talents in those fields as well. The executives came from companies such as Salesforce, Microsoft, Rakuten, from P&G; the chief marketing officer in Pioneer right now, and from Japan Taxi – our CTO. I hired those software SaaS business leaders to build the capability of our SaaS business.
We also carved out the non-core business from our portfolio. For example, we had a small healthcare business, leveraging our existing technology, just an application focused on healthcare equipment. Because our focus on investment and future growth was, first of all, mobility fileds and more on the SaaS side, healthcare business was carved out.
It is a pity that we cannot continue to invest for these people even though they have good technology and assets, and we decided to carve out the business and sell this technology to big healthcare companies. I recently talked with someone from one of the companies and he was pleased with it because he’s leading the R&D capability of this firm. This is just one example, not only in healthcare, but other non-core businesses which we conduct. By doing so, we can focus on developing the capability of the SaaS business with the people and invest our time and brain to focus in that. That’s where we are at the moment.
Within the space of intelligent automobile systems, what technologies are you planning to introduce next?
We are expanding our partnership with other third-party service providers. An example is the major travel agency, JTB, which has excellent travel content in each city, through activities of demonstration experiment in Kumamoto Aso area. When you visit and drive a rental car in an area you are unfamiliar with, it would be good to have a rental car with NP1 that can tell you what an area is famous for. For example, if you like ramen, then it will tell you like that a particular ramen restaurant is a good spot. Our role is to use NP1 and connect it to the provider’s services that are good for the drivers, first and foremost, and also be suitable for JTB. And it is also good for local businesses.
