For Konica Minolta dealers attending the company’s annual dealer meeting with its theme of “Shape the Future,” it’s unlikely anyone came down with future shock after listening to the presentations during the General Session, visiting the Product Expo, or sitting through the various seminars. The future that Konica Minolta presented wasn’t all that shocking for anyone paying attention to what’s going on in the office imaging industry and with Konica Minolta.
Future shock value aside, let’s take a look at what I found to be the Top 10 take homes from the event.
The press and analyst community revels in numbers, and what’s a dealer conference without a healthy helping of numbers and percentages about the company’s financial status. President & COO Rick Taylor reported that the company’s revenue grew 6 percent during the past fiscal year. Meanwhile, hardware revenue and the number of units sold grew 9 and 9 percent, respectively. Beyond the core business, Taylor noted that Konica Minolta’s solutions business grew 44 percent and IT services, 59 percent during the past fiscal year. But wait, there’s more, for the first six months of this current fiscal year ending in September, Konica Minolta’s overall numbers are running about equal to the previous year. Additionally, Konica Minolta grew machines in field and page volume. “You can only do that by taking share from your competitors,” added Taylor. “To grow your page volume and MIF in field is an unbelievable effort in this kind of market.”
Dealer vs. Direct
One of Taylor’s more notable revelations was that 52 percent of units sold were from the dealer side of the business. “We just flipped it from more direct business to more dealer business in the last six months, and October was one of the biggest dealer months we ever had,” beamed Taylor.
For an organization that at one time did a stellar job of showing their independent dealer channel little respect, it’s been an impressive turnaround over the past five years. With the aforementioned amount of business moving through the dealer channel, Konica Minolta dealers have to feel good about their future with the company.
“There’s no paranoia in Konica Minolta about driving a lot of business through a dealer organization,” said Taylor. “The dealer model is probably more conducive to the goals that we’ve got than our direct model. The future is going to be all about being flexible, adaptable, speed to market, crafting solutions for customers that take a lot of creativity, and can be implemented quickly. The branch organization is great, they’re making money, but they can’t be fast like that.”
Konica Minolta Sets the Standard in Managed IT Services
Based on the comments of Konica Minolta executives and the emphasis on Managed IT Services throughout the meeting, this is a key component of the company’s future. “That business has been a home run for us,” observed Taylor. With the All Covered acquisition behind them, the present and the future of Konica Minolta’s IT business remains strong, particularly when one looks at the pace that it’s been acquiring IT services companies across the U.S. One can talk about what some of the other manufacturers are doing in this space, but based on current performance and its strategies for shaping its future both internally and externally within its dealer channel, few do Managed IT Services better. Don’t be surprised if in the next decade or sooner the Konica Minolta name becomes just as much associated with IT services as with traditional office imaging hardware
True A4, Finally
When Senior Vice President of Marketing Kevin Kern told dealers we’ve got something we haven’t been very good at lately when introducing the company’s new A4 strategy, he wasn’t messing around. Over the next several months Konica Minolta will roll out a new A4 platform design featuring color and monochrome models as well as models for customers who don’t need a full solutions platform.
One of the first new A4 models is scheduled for rollout in the first quarter of 2014 was described by Kern as a shrunk down bizhub with the same look and feel. The new A4 models are expected to have the same Interface as Konica Minolta’s A3 products. “As you roll solutions across the A4 products, the interoperability between A4 and A3 creates an ecosystem for the solution environment that will enable us to differentiate our offerings dramatically from what customers are used to today,” observed Kern.
Embracing 3-D Printing
Other than HP’s recent announcement that it is entering the 3-D printing space, 3-D printing hasn’t been embraced by the traditional office imaging OEMs until now. The plan is for Konica Minolta to source 3-D printers from 3D Systems, one of the biggest players in the 3-D printing arena. Although Konica Minolta hadn’t officially entered into a formal agreement with 3D Systems as of yet, it might just as well have based on the discussion of 3-D printers during the General Session and the presence of 3D Systems in the Product Expo. “That market is big and growing and exciting and fits well with our vertical approach of engineering and manufacturing,” said Taylor about the 3-D printer market.
Going Beyond Light Production
Konica Minolta has already established itself in the light production space, now it has higher aspirations. “We started the light production market with the bizhub PRESS C850, stated Kern, “we’re moving up beyond that now.” And indeed the company is based on some of the devices previewed at Print 13 back in September. One of those devices, the bizhub PRESS C1100, is scheduled for an early summer release. “It’s a breakthrough product at 100 ppm,” said Kern who added that this new model will offer full machine productivity at all paper weights.
Also look for the bizhub PRESS 2250P coming next summer. This was described by Kern as two 1250 engines combined together with a transfer unit. It’s designed for creating books on demand and will produce 250 impressions per minute one-sided or 125 two-sided per minute. “This adds high value book production capabilities to [our] product line.”
Lookalike Office Products
Sticking with the hardware emphasis, Konica Minolta has unified all its office products with a common look and feel while all monochrome products are running on a common platform. “The cool thing about that from a customer interaction standpoint is we’ve got a common E Series panel design throughout the entire office monochrome and color line,” observed Kern. He added that the benefits of that approach include a better user experience, easier training, and devices that are easier to service because of that commonality. As an added bonus, they also use common accessories.
Focusing on Mobility and the Cloud
Virtually every OEM in the office imaging space has a two-track mind these days—mobility and the cloud—and Konica Minolta is no exception. The company has made a multi-million investment in its data center infrastructure and today operates more than 1,200 servers. Its current cloud offering is comprised of cloud-based solutions and mobile connections to its MFP product line. Seven new mobile solutions were on display at the Product Expo. “We will leverage and converge our All Covered capabilities and provide you with the most comprehensive cloud offerings in the market,” said Sam Errigo, senior vice president, Business Intelligence Services. (Look for more coverage on this topic in a future issue of The Week in Imaging.)
Current State of the Konica Minolta Independent Dealer Network
One question often asked by the press at these dealer meeting press briefings is the size of the company’s dealer network. That question was answered during Executive Vice President, Dealer Sales, Alan Nielsen’s General Session presentation. He reported that Konica Minolta currently has 334 authorized dealers in the U.S., and that over the last five years cancelled or non-renewed a total of 124 dealers while recruiting 59 new dealers for a net reduction of 125 dealers. Nielsen predicted that there will continue to be changes in a few markets where current partners don’t have the technological, financial or leadership strength to be able to successfully transition into the future or are not able to achieve Konica Minolta’s 20+ percent market share objective.
3 Strategies for KM’s Dealer Channel
Nielsen also revealed three strategies that Konica Minolta is focused on for growing its independent dealer channel. The first is creating a partnership with minimal channel conflict and clean distribution. “That’s been pivotal in our mutual success,” he said. “Our dealer and direct channels are working better together than ever.
The second strategy is to earn its dealers trust, loyalty, and dedication while the third strategy is to grow its dealer’s local and major account business. “It’s the natural outgrowth of the first two [strategies],” noted Nielsen. “The best indicator of success is we consistently grow total revenue at an average annual compound growth rate of 9 percent over the past five years. What’s more impressive is we’ve grown machine and accessory revenue at 11 percent and major accounts almost 14 percent. The Konica Minolta dealer business is very important to us and plays a key role in our industry leadership objectives.”
While we’re on the subject of the KM independent dealer network, besides selling 52 percent of total units the past year, Nielsen noted that sales have been strong across all product categories. Dealers have grown total unit sales 16 percent and shown growth in every product category. “This is by far the best performance in our industry,” concluded Nielsen.