To our investors
Top Message
James C. Collins wrote a highly acclaimed book titled "Built to Last: The Successful Habits of Visionary Companies." The book states that a "visionary company" is one that continues to carry on its operations for 50 years or longer while achieving excellence within its industry. Such a company incorporates a structure that allows it to continue to flourish regardless of the lifecycles of its products and generational shifts in management. Of the tens of thousands of companies in the U.S., fewer than 20 are said to have achieved this status. Only 20 companies have managed to become "visionary companies" in the global economy and have continued to grow and flourish during the seven decades since the end of World War II. As such, the outstanding nature of these companies is clear to see. Collins' book says the "visionary companies" were all established with a clear picture of the future of the company.
Recently, we have seen on the news that Japanese-made television sets are no longer selling well.
I can still remember the impact on the nation when televisions first appeared in Japan in the 1950s. TV allowed you to witness events taking place around the world as you sat at home, and to enjoy sports and dramas unfolding before your very eyes.
Television sets were originally imported from the U.S., and Sharp was the first company in Japan to produce them. Matsushita Electric (now Panasonic), Toshiba, and Hitachi followed suit mass-producing television sets. Japan went on to surpass the U.S. in TV production, demonstrating its strength as an industrialized nation.
In later years, Sony developed the Walkman, a device that allowed people to listen to music while moving around, and Japan's electronics makers became acknowledged as the most technologically advanced in the world.
Despite this glorious past, television manufacturing has now largely been taken over by emerging economies such as South Korea and China, and Apple in the U.S. created the iPhone, which allows one to listen to music and watch videos while moving around freely.
The sad thing is, since it is not possible for a single company to completely dominate the electronics industry, companies are fated to compete with each other eternally.
Fifty-three years ago, as Japan was rapidly shifting from being a nation highly dependent on fishing and agriculture to becoming an industrial powerhouse, Sanrio realized the importance of the role of communication in this new world, and established itself as a "social communication" business. Sanrio's business is one step removed from the competitive elements found within material society. Instead, it is based on a philosophy of people getting along and helping one another, as well as on communication between people such as parents and children, brothers and sisters as well as friends.
Holding onto the belief that communication among people is key to creating a peaceful society, and based on the motto "Small Gift Big Smile," our company has worked hard for the past 53 years to promote communication between individuals including parents and children, siblings and friends with the aim of encouraging to live together while getting along and helping one another through exchanging gifts and cards.
In developing this "social communication" business, we created characters to express our unique perspective. These characters have been imbued with the characteristics of "getting along" and "helping one another" so that these messages can be conveyed to the entire world. We hope that by creating collaborations between the characters and different kinds of products, a culture which links Asia to the rest of the world can be created. At present, our characters are used in 109 countries on products including clothing, household items, food, postage stamps, and educational materials as well as in areas including finance, insurance, hotels, government, medicine, sports, entertainment, theater, and the Japanese Red Cross Society.
Recently, a Sanrio theme park opened in Malaysia, and an astounding number people turned out for the Hello Kitty show. We expect to further expand into Turkey, China, South Korea, and other countries in Asia as well as Europe and South America.
Furthermore, in the U.S., data shows that sales of greeting cards have increased during the past two to three years. This trend reflects a diminished ability among the younger generation to choose the right words and to convey themselves in writing. The youth have thus come to see greeting cards as a completely different and valuable way of communicating as opposed to using email and short texts, and we believe that this market will continue to grow in the future. We would like to continue to actively export Sanrio's greeting cards through its unique planning skills, to the U.S. and the world.
We believe that our "social communication" business combined with the power of our characters will—as people increasingly feel the importance of communication—spread throughout the world.
I would like to thank you, our shareholders, for your understanding and continued support of our business.
December 2012
