The news that NEC and Sharp, two major players in ‘Japan Inc’, are to create a joint venture is not terribly surprising. Both brands have been battling an increasingly competitive landscape for several years. According to Futuresource’s Worldwide Quarterly Tracking Services, in 2019 the brands had a combined volume share of 7.5% in the LCD market, and 5.1% in the projector market.
Their competition is moving west from Korea to China, with domestic Chinese brands now presenting the most significant threat due to their low price-points. The only option for brands not in a position to fight on price is to focus on the customer by incorporating relationship building into their sales approach, providing high-quality products and offering superior aftersales services.
The merger of NEC and Sharps’ offerings will enable both brands to adopt this strategy more effectively; NEC’s consultancy-led sales approach will no-doubt provide more opportunities for Sharp’s high-end solutions. Whilst Sharp’s focus on innovation will enable NEC’s broad portfolio to focus more on the lucrative high-end niches.
In short, the joint venture will no doubt prove to be a positive one but the threats that led to its creation are only set to grow. Dynamics in the display industry are shifting rapidly and whilst this may lead to further mergers between Japanese, and even Taiwanese companies, brands must be able to react swiftly, or risk being left behind.