![\"\"](\"https:\/\/www.enxmag.com\/twii\/wp-content\/uploads\/2022\/06\/Mike_Marusic_cropped.jpg\")
president and CEO,
Sharp Imaging and Information
Company of America<\/figcaption><\/figure><\/div>\n\n\n\n
Marusic\u2019s calculating nature has enabled Sharp to weather the storm in spectacular fashion, at least by pandemic standards. Most importantly, the manufacturer finds itself nestled in the top four among industry OEMs by market share. That\u2019s as much a credit to the entire organization as it is Sharp\u2019s handling of supply chain woes and chip shortages. As Marusic sees it, the success comes down to two areas: execution and communication, with a dash of emphasis on the latter.<\/p>\n\n\n\n
Having Foxconn as a technology partner certainly gives Sharp a leg up in proffering technologies that can add revenue opportunities for resellers. The OEM has also made (and continues to back) significant investments for rollouts across the A3 and A4 lines. Marusic sat down with ENX Magazine to provide insight into the cadence and decision-making approach he\u2019s followed to enable Sharp to continue garnering more share while ensuring dealer partners are fully aware of the whens and hows that will enable their own growth amid the product disruptions.<\/p>\n\n\n\n
Provide some insight into Sharp\u2019s financial performance during 2021. What were some of the variables that played into how the company performed?<\/strong><\/p>\n\n\n\n Marusic<\/strong>: Our revenues from a top-line perspective were down about 3%, but we managed a good profit level. We had supply chain impacts stemming from companies that provide us components. All our divisions made money in 2021, which is a strong position to be in and provides a lot of stability. In the B2B space, that business was up 8.5% for the year, which was very nice to see. It was similar to where we were in the U.S. operations. We don\u2019t disclose the local markets, but that was in line with where we were, and also a good profit for business\u2014about 4.5%. We did a good job of managing inventory. With supply chain impacts, especially the shipping, we maintained a lot more inventory than we usually do. And that was a big part of our success last year. A lot of dealers have shared with me the difficulties their other OEMs have experienced, so it\u2019s nice to be on the positive end of that conversation. Plus, it helps that we\u2019re well diversified, and we\u2019ve had a good balance of investments. It\u2019s been a very positive year.<\/p>\n\n\n\n What were some of the highlights for Sharp during the past year?<\/strong><\/p>\n\n\n\n Marusic<\/strong>: The most important thing this year has been supplying product to our dealers, and maintaining inventory was key. When I talk to dealers, I always use 2019 as a basis for inventory comparison so they get a better understanding of pre-pandemic versus post-pandemic. When you look at a dealer and they have product coming off lease that they placed in 2018 or 2019, the ability to have a Sharp product ready to go in 2021 and 2022 was tremendously valuable to the dealer. They didn\u2019t have to worry about extending the leases. The vendor-managed inventory program we put in place about seven years ago really positioned us well for the supply chain issue. We had to understand supply chain A to Z to do that program. As we entered this period, our team was really well positioned to understand what needed to get done, how to do it, and how to make those changes. It\u2019s been a crazy year, but certainly interesting.<\/p>\n\n\n\n In terms of market share, we finished 2021 at about 10%, according to IDC. During the last two quarters, we were over 11%. Considering we were about a 6% market share company a few years ago, that\u2019s tremendous. And as a result, we\u2019ve moved into fourth place in market share among OEMs for the last two quarters. That\u2019s made for a little disruption in the playing field, which dealers have been taking notice of. With that type of sustained success, it\u2019s allowed Sharp to continue investing in new products and categories. We\u2019re seeing the dealers take advantage of our AV and laptop offerings. The ability to get product to our dealers and let them sell other technologies that we can provide on one invoice has been key to our success.<\/p>\n\n\n\n Sharp hosted its first-ever hybrid employee event in conjunction with the start of its new fiscal year. What were your goals for this gathering, and did it meet expectations?<\/strong><\/p>\n\n\n\n Marusic<\/strong>: It was great just getting people in the room. We had done a few employee meetings where it\u2019s just a few of us in our atrium talking to a camera. You really lose that in-person energy, and I\u2019ll be honest, it was awkward. When there\u2019s so much negativity around, being able to share positive news about the company was really well received. Employees are happy to hear that their contributions actually meant something. We had about 150 people in the audience, and we brought in about 50-75 people for meetings that week. Getting everyone together and planning out things for the coming year was also a nice byproduct. It was productive to have that face-to-face interaction and really talk about the issues confronting us. It comes across better when you can have casual conversations rather than a Microsoft Teams meeting. All in all, I felt it was very positive, and we\u2019ll probably do another update soon with all of our employees. Hopefully, we\u2019ll be able to get everyone together this fall.<\/p>\n\n\n\n At the onset of 2022, Sharp issued guidance to its dealer community regarding chip shortages. Can you provide an update on where you stand with these efforts?<\/strong><\/p>\n\n\n\n Marusic<\/strong>: We\u2019ve continued to do this monthly. It\u2019s critical to share this with the dealers because they need to plan out what\u2019s going on. We were a little ahead of the curve in this regard; we actually started sharing a monthly update in July 2021 that showed the next 60 days\u2019 worth of incoming product for our dealers. The dealers helped us manage our inventory better because they understood what was coming in and what wasn\u2019t, and they adjusted their business accordingly. That allowed us to load balance our business. It was mutually beneficial. We typically give a 60-day map, but for the May update, I provided guidance through August. Usually it\u2019s been a lot of fun sending that out, because it\u2019s generally good news. But obviously, we had the Shanghai shutdown, where the whole region of China production was down for about eight weeks. So it looks as if Sharp, along with everyone else, will have some challenges in the late summer timeframe. But the most recent updates we received forecast a quick recovery for Sharp. Our production and availability through June are going to be well above the 2019 levels. In fact, as we close May right now, this will be our highest May on record for shipments.<\/p>\n\n\n\n It\u2019s going to be a long year. This supply chain issue isn\u2019t going away until 2023. Others were saying they\u2019d be okay in the fall of 2021, but we were honest; we knew it wasn\u2019t going to be the case. We knew it would be at least a year at that point, and now it looks like it\u2019s going to be a year and a half.<\/p>\n\n\n\n If the supply chain issue continues for another year, how would that impact your bottom line?<\/strong><\/p>\n\n\n\n Marusic<\/strong>: We\u2019ve done well. We\u2019ve been profitable in the U.S. and over in Japan. I think the real issue is the investment in chips that Sharp has been willing to make. There are enough chips, but it\u2019s an interesting dynamic. In 2021, more chips were made than in any other year in history. It\u2019s not that production is down, but rather that demand is up. OEMs have to decide if they\u2019re willing to pay slightly more for those chips, and we\u2019ve been willing to do that. There\u2019s a cap in growth though; with increased demand comes higher pricing, which makes it harder to buy even more chips. So there\u2019s a balance. We\u2019ve been comfortable with pricing of chips at 120% of 2019 levels, so we should be fine. I think the bigger issue is how many companies continue to make those investments in providing the chips. That\u2019s really where the opportunity is for Sharp.<\/p>\n\n\n\n Earlier this year, Sharp rolled out the latest iteration of its AQUOS Board interactive displays. How have these products fared in a post-pandemic landscape?<\/strong><\/p>\n\n\n\n Marusic<\/strong>: Right before the pandemic, we introduced our Windows collaboration display, and it came out exactly a week before everything shut down in March 2020. And that really, really hurt us. People were completely out of the office, and companies shifted their priority to other technologies. As companies now have done a hybrid approach, I think it\u2019s actually helped us. With the unpredictability of remote and on-premise, there\u2019s a focus on the ability to share content and do collaboration in real time. People understand how to use Microsoft Teams, Zoom meetings and Google Meet, so they\u2019re able to share content. It allows for a little bit more interaction than perhaps was done during face-to-face meetings. You might not draw something when you\u2019re face to face, but you\u2019re more likely to do that when remote. So we\u2019re having a lot of success.<\/p>\n\n\n\n It\u2019s going to be a long year. This supply chain issue isn\u2019t going away until 2023. Others were saying they\u2019d be okay in the fall of 2021, but we were honest; we knew it wasn\u2019t going to be the case. We knew it would be at least a year at that point, and now it looks like it\u2019s going to be a year and a half.<\/p><\/blockquote>\n\n\n\n What\u2019s nice is our copier dealers are picking up on it. In April, one of our copier dealers\u2014not a huge dealer, either\u2014won a $1.5 million deal on the interactive board. We\u2019re beginning to see a lot of dealers take these products on. Dealers don\u2019t have to be Sharp customers to sell our interactive boards. They\u2019re available through IT distribution, and a lot of our biggest customers are actually non-Sharp MFP dealers. With our AV business, the office space is doing well. Surprisingly, what\u2019s really been harder for us is digital signage. Brick-and-mortar-type businesses are struggling with openings and traffic. We haven\u2019t seen investments there in digital signage, but as far as office technology, it\u2019s been pretty good.<\/p>\n\n\n\n While A4 and hybrid\/remote tools continue to grow, Sharp has also been busy with the launch of the A3 color workgroup document systems as well as the Pro Series line of production printers with inline finishing capabilities. Can you tell us a little about both releases and the philosophy on fortifying the entire catalog?<\/strong><\/p>\n\n\n\n Marusic<\/strong>: We\u2019ve been trying to do all the above. In the A4 space, as we maneuver the supply chain issues, I told our dealers in early 2021 that I would pause some production of A4 because we needed the chips in our A3 products. I got some criticism from others about it. But looking at it from a dealer perspective, Sharp was not strong in A4 a few years ago, so the majority of fleet turnover would be A3. I wanted to secure the dealer\u2019s existing business; I didn\u2019t want them to not have product in A3. We quickly recovered and were able to catch up a little bit later in the year. As far as our A4 business, we\u2019re actually up over 200%. I\u2019d like to do a lot more, but it\u2019s really hard right now due to chip prices. It\u2019s a tough balancing act, and we need to layer in the logistics side of it. It becomes really hard because the cost of importing the $600 printer becomes fairly high relative to the cost of printers.<\/p>\n\n\n\n We\u2019ve made a lot of investments, and the decision to build out the products that we\u2019re introducing this year was made during the pandemic. A lot of companies were able to introduce products during the pandemic, but those planning periods happened prior to knowing what was going to happen in the world. Right in the midst of a pandemic, Sharp decided \u201cwe\u2019re going in.\u201d We were refreshing our entire A3 color and, ultimately, monochrome lines this fall. We\u2019ve introduced new production printers. Hopefully, the dealers are seeing that we\u2019re really committed to the office space. We\u2019ve been able to bring new technologies. I\u2019ve talked a lot with our dealers the last couple years about our access to new technology before most of the market can get it due to our Foxconn relationship. Bringing these new products out with different chipsets in them that maybe aren\u2019t yet available to the industry allows us to avoid some of these supply chain bottlenecks. And we\u2019re buying from different suppliers and using different chips. That\u2019s another advantage we\u2019re seeing.<\/p>\n\n\n\n How has your Sharp Business Systems direct business fared?<\/strong><\/p>\n\n\n\n Marusic<\/strong>: We had challenges a few years back in driving profitability. I think a lot of OEMs struggle with their direct branches as far as being profitable and growing the business. Over the last year and a half to two years, we\u2019ve made a lot of progress. The branches are profitable and growing. Like everyone else, our branches struggle with the click counts, which has had an impact on the overall business. From my standpoint, branches really allow us to understand the life of a dealer. As we go through the struggles of clicks and different types of service, we\u2019re still servicing the machines but not getting the same volumes as before. All those struggles help us better understand what we need to do for our dealer community. We\u2019re also seeing what\u2019s difficult or easy and what does or doesn\u2019t work in selling laptops and the displays to existing copier companies. We bring that knowledge and insight into our dealer channel.<\/p>\n\n\n\n What else can we expect to see this year from Sharp in terms of new product rollouts?<\/strong><\/p>\n\n\n\n Marusic<\/strong>: In the fall, we\u2019ll be refreshing the monochrome A3 line, and we\u2019ll be sharing more details with the dealers shortly. With some of the hiccups in the supply chain, we\u2019ll be announcing products a lot earlier than previously. Traditionally, companies such as Sharp have tried to wait until the 11th hour to introduce products. I think more communication is better at this point. We\u2019re going to have a pre- pre-announcement in the sense that it\u2019ll be months before we introduce the product, but we\u2019ll share the details with our dealer community. In the spring or into 2023, we\u2019ll have more A4 products coming to market. The entire A3 product line will be refreshed and we\u2019ll have a lot more A4 products coming soon.<\/p>\n\n\n\n Is there anything new on the horizon from a program or partnership standpoint?<\/strong><\/p>\n\n\n\n Marusic<\/strong>: We\u2019ve done a lot of revamping of our programs during COVID. I think we have a solid program in place right now that our dealers really like, and we\u2019ll do any necessary tweaks to make it better. In terms of partnerships, we can\u2019t announce any right now, but we\u2019re looking at a number of different things. For Sharp, it\u2019s a little different. Other OEMs have to go outside their organization to bring in technology for their dealers. We can do it in house, so things such as Dynabook or NEC displays bring another level to our dealer community that they don\u2019t get elsewhere. Whether you sell a display or Dynabook, we try including that in your goals. It\u2019s another value we bring to our dealers. We\u2019re still not where we need to be; we can always get better at it. We have a lot of dealer participation, but I think we can probably get another third of our dealers involved in that space.<\/p>\n\n\n\n What are Sharp\u2019s goals for the balance of 2022 and beyond?<\/strong><\/p>\n\n\n\n Marusic<\/strong>: We\u2019re in a good spot because we were lean going into the pandemic. Now, it\u2019s all about building out our foundation so we can be more nimble than our competitors. I want to continue that progress of expanding our market share and expanding penetration with the dealers. I think the industry really shifted its viewpoint of Sharp. Five years ago, I think it was fairly common for a dealer to question whether or not Sharp would be in the space. I heard that a lot. Today, few people doubt Sharp\u2019s going to be among the last standing\u2014dealers tell me as much. That topic\u2019s been closed.<\/p>\n\n\n\n Dealers can see how we keep making investments in the office space. It\u2019s great to talk about it, but how do we support our dealers in selling these other products? How do we support them in going into markets and understanding how to lock in customers across all technologies? That\u2019s where we have to improve. Dealers see Sharp\u2019s commitment to staying in the space, not diversifying away. We need to make sure our dealers are fully capable and buying and selling on a regular basis. Finally, we just need to secure that position. We\u2019ve had a lot of growth, and growth can be fickle. So we\u2019ve got to stay grounded and really focus on executing what we\u2019ve been doing. If we can continue with our market share growth and get dealers buying into those other technologies, I would say that would be a successful year for us.<\/p>\n\n\n\n And hopefully, there\u2019s a brighter light at the end of the tunnel\u2014one that doesn\u2019t include supply chain snafus and inflation. Obviously, that\u2019s going to make it really tough.<\/strong><\/p>\n\n\n\n Marusic<\/strong>: The biggest thing I see right now is inflation, as companies have made tougher decisions. If we go into a recession, I think things will change dramatically. Some have argued that we may be in a recession already; I\u2019m not there yet, but I\u2019m not an economist. For our industry, it comes down to how do we execute properly? Too much was spent for years in this industry on pie-in-the-sky ideas. I think execution always wins, and communication always wins. Effective communication can get you through any issues, and hopefully as an industry, we continue to focus on it. <\/p>\n","protected":false},"excerpt":{"rendered":" As president and CEO of a major industry manufacturer, Mike Marusic must be tempted to wear a fireman\u2019s helmet to the office. Just like an effective FD captain, the leader of Sharp Imaging and Information Company of America takes a measured approach to the smoldering post-pandemic flare-ups he encounters on a seemingly daily basis. After all, rushing into a burning building can have dire consequences. Marusic\u2019s calculating nature has enabled Sharp to weather the storm in spectacular fashion, at least by pandemic standards. Most importantly, the manufacturer finds itself nestled in the top four among industry OEMs by market share. That\u2019s as much a credit to the entire organization as it is Sharp\u2019s handling of supply chain woes and chip shortages. As Marusic sees it, the success comes down to two areas: execution and communication, with a dash of emphasis on the latter. Having Foxconn as a technology partner certainly gives Sharp a leg up in proffering technologies that can add revenue opportunities for resellers. The OEM has also made (and continues to back) significant investments for rollouts across the A3 and A4 lines. Marusic sat down with ENX Magazine to provide insight into the cadence and decision-making approach he\u2019s followed to enable Sharp to continue garnering more share while ensuring dealer partners are fully aware of the whens and hows that will enable their own growth amid the product disruptions. Provide some insight into Sharp\u2019s financial performance during 2021. What were some of the variables that played into how the company performed? Marusic: Our revenues from a top-line perspective were down about 3%, but we managed a good profit level. We had supply chain impacts stemming from companies that provide us components. All our divisions made money in 2021, which is a strong position to be in and provides a lot of stability. In the B2B space, that business was up 8.5% for the year, which was very nice to see. It was similar to where we were in the U.S. operations. We don\u2019t disclose the local markets, but that was in line with where we were, and also a good profit for business\u2014about 4.5%. We did a good job of managing inventory. With supply chain impacts, especially the shipping, we maintained a lot more inventory than we usually do. And that was a big part of our success last year. A lot of dealers have shared with me the difficulties their other OEMs have experienced, so it\u2019s nice to be on the positive end of that conversation. Plus, it helps that we\u2019re well diversified, and we\u2019ve had a good balance of investments. It\u2019s been a very positive year. What were some of the highlights for Sharp during the past year? Marusic: The most important thing this year has been supplying product to our dealers, and maintaining inventory was key. When I talk to dealers, I always use 2019 as a basis for inventory comparison so they get a better understanding of pre-pandemic versus post-pandemic. When you look at a dealer and they have product coming off lease that they placed in 2018 or 2019, the ability to have a Sharp product ready to go in 2021 and 2022 was tremendously valuable to the dealer. They didn\u2019t have to worry about extending the leases. The vendor-managed inventory program we put in place about seven years ago really positioned us well for the supply chain issue. We had to understand supply chain A to Z to do that program. As we entered this period, our team was really well positioned to understand what needed to get done, how to do it, and how to make those changes. It\u2019s been a crazy year, but certainly interesting. In terms of market share, we finished 2021 at about 10%, according to IDC. During the last two quarters, we were over 11%. Considering we were about a 6% market share company a few years ago, that\u2019s tremendous. And as a result, we\u2019ve moved into fourth place in market share among OEMs for the last two quarters. That\u2019s made for a little disruption in the playing field, which dealers have been taking notice of. With that type of sustained success, it\u2019s allowed Sharp to continue investing in new products and categories. We\u2019re seeing the dealers take advantage of our AV and laptop offerings. The ability to get product to our dealers and let them sell other technologies that we can provide on one invoice has been key to our success. Sharp hosted its first-ever hybrid employee event in conjunction with the start of its new fiscal year. What were your goals for this gathering, and did it meet expectations? Marusic: It was great just getting people in the room. We had done a few employee meetings where it\u2019s just a few of us in our atrium talking to a camera. You really lose that in-person energy, and I\u2019ll be honest, it was awkward. When there\u2019s so much negativity around, being able to share positive news about the company was really well received. Employees are happy to hear that their contributions actually meant something. We had about 150 people in the audience, and we brought in about 50-75 people for meetings that week. Getting everyone together and planning out things for the coming year was also a nice byproduct. It was productive to have that face-to-face interaction and really talk about the issues confronting us. It comes across better when you can have casual conversations rather than a Microsoft Teams meeting. All in all, I felt it was very positive, and we\u2019ll probably do another update soon with all of our employees. Hopefully, we\u2019ll be able to get everyone together this fall. At the onset of 2022, Sharp issued guidance to its dealer community regarding chip shortages. Can you provide an update on where you stand with these efforts? Marusic: We\u2019ve continued to do this monthly. It\u2019s critical to share this with the dealers because they need to plan out what\u2019s going on. We were a […]<\/p>\n","protected":false},"author":166,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2938],"tags":[],"_links":{"self":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/50451"}],"collection":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/users\/166"}],"replies":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/comments?post=50451"}],"version-history":[{"count":6,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/50451\/revisions"}],"predecessor-version":[{"id":50573,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/50451\/revisions\/50573"}],"wp:attachment":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/media?parent=50451"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/categories?post=50451"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/tags?post=50451"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"https:\/\/www.enxmag.com\/twii\/wp-content\/uploads\/2022\/06\/Marusic-Conference.jpg\")