Reuters: Nikon Diversification

Started 6 months ago | Discussions thread
peevee1
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Re: Someone will DIED, could be Nikon, Pentax, or just Sony "Alpha" division
In reply to Camley, 6 months ago

Camley wrote:

peevee1 wrote:

justmeMN wrote:

How did you figure that? There used to be much smaller market and even more camera makers.

Camera divisions have to figure out how to make a profit in a shrinking market, a very difficult task.

Olympus, for example, "forecast a fifth annual loss for the camera business". That can't go on forever. Olympus is a thriving medical technology company, that doesn't need a camera division.

I think they know better what they want.

It isn't really what "they" want, it's what the owners/shareholders want, which is a fair return on their investment. Debt holders also want to see a financially secure and well run company.

They know better.

All areas of Olympus (or any other company) have to make a profit

It is simply impossible. First, in any sufficiently big company there are always "areas" which do not make profits, like advance research or administration. Second, in any sufficiently diversified company there are always business lines which are unprofitable at any given times for some reason - after all, it is the point of diversification of the business to be able to keep business lines alive through hard times, to gain advantage on businesses who will have to shut down in such circumstances.

Moreover, profit and cost attribution is a tricky affair. If Olympus to shutdown their camera business, it does not mean than administrative, R&D and other common costs will fall proportionally, meaning that other divisions which now share those costs will become less profitable.

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