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Why would a cash strapped Sharp cut off Global?

October 27, 2012

I read the What’s Happening Report from From Industry Analysts, Inc. that stated Sharp has cut off Global Imaging (GIS). Sharp will no longer sell Global Imaging (a Xerox Company) hardware or accessories after November 26th 2012. Global will still be able to buy parts but at a higher price.

I asked myself why would a cash strapped company like Sharp cut off a revenue stream, any revenue stream? If you want your copier division to survive and prosper during the turmoil that that they are experiencing you would not arbitrarily cut off one of your distribution channels. During good economic times there are a number of reasons why Sharp would not want Xerox selling their products. Let’s face it Sharp doesn’t want to help Xerox (Global) anymore than Macy’s wanted to help Gimbals.

So why do it? Even a better question, why do it now? The most obvious answer to me is that they are preparing to sell the copier division to a buyer that doesn’t have or want to have a relationship with Xerox \ Global. It a lot like when someone is selling a building, and the buyer makes the seller clear out all the undesirable tenants as conditions of the sale. If anyone else has a more plausible explanation I am all ears.

I know that Sharp USA is working their A__ off signing up dealers and putting out press releases. I believe that there are a lot of good industry professionals who work at Sharp USA. But Sharp Inc owns Sharp USA, and they are not likely asking Sharp USA for permission or advice. It’s not even likely that the leadership of Sharp USA is fully informed about whether or not they are being sold. Sharp Inc wants to keep the worker bees at Sharp USA making (m)Honey.

I am sure that this is very stressful to the folks at Sharp USA. Having lived through the Ricoh \ Lanier merger myself I understand, and even sympathize. But it looks like the hand writing is on the wall for Sharp USA. Since the copier industry is going through a significant contraction this will be a particularly difficult time to go through a merger, or even worse a takeover. If you currently work for Sharp USA this would be a good time to get your resume updated, and start to network with other professionals. The good news is good people will always find work. the bad news is that with all of the consolidation there are a lot of good people looking for jobs in this industry. Some of the folks at Sharp USA will make the transition to who ever buys them, some will not. Take your future in your own hands, start looking around for other opportunities so at least you will have options. Options are a good thing!

That’s my $0.02
Vince McHugh
vince.mchugh@necs.biz
WWW.NECS.BIZ

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7 comments

  1. There is a very strong precedent for this in the market. Canon has a long history of doing the same thing. The minute a dealer is acquired by a competitive vendor they pull the plug, even when it means pulling the plug on 50% of their distribution channel. Even when it means killing an order in hand to ship hundreds of MFP’s to unseat competitive hardware.

    Because of this I have seen a decided shift in large customer buying habits who now often specify that they will only buy from *BS entities because they have been burned by purchasing from an independent dealer who was cut off after an acquisition, leaving the customer like a beached whale with slow parts and supply orders, and no manufacturer support.

    I can see the possibility that there is a long term business strategy for a manufacturer to increase the presence of their direct selling arm. I can see the wisdom of steering a customer towards doing business with an authorized dealer, but when you yank the rug out from under the guy who is paying for your gear, they place the blame on the manufacturer, not the dealer.

    An alternative to this is the approach follower by KM. Xerox acquires Global, and they kept selling KM gear for a long time afterwards. Ricoh acquires Ikon, and its business as usual. If you would rather place KM gear than your own gear, party on dudes, KM loves that action. Oh and by the way since you like that box so well Mr. Customer, KM will be happy to upgrade you to their new gear when the time comes around.


  2. Rudy,

    The Manufacturers do one thing really well, they manufacture hardware. The problem with the _BS branches is not the lack of good or talented people, many of whom have been successful in this industry for years. The problem with the _BS branches is the lack of local infrastructure.

    Running a manufacturing company is not the same as running a service organization. I think it has surprised many of the Manufacturers that their Direct Sales Branches have struggled so. They thought how hard can it be (LOL). The strategies used to be a good manufacturer of hardware do not transfer to being a good service provider. Just in time inventory may work well in manufacturing, we call it “Not in time inventory” when a customer has to wait days or weeks for a part that is keeping their machine down.

    The Large Regional Independents have an established infrastructure, local warehouse stocked with parts & inventory. local dispatch knowledgeable of the area & weather conditions, local System Support for network, connectivity, and software problems.

    The _BS branches roll into town, hang a shingle on a sales office and say “We are the manufacturer” , “Why would you want to buy our equipment from a dealer”? I have a one word answer “INFRASTRUCTURE”! The _BS branches are a lot like a Hollywood town, nice facade but nothing standing behind it.

    By the way, when was the last time you bought a Car directly from GM or Ford? The reason you go to a local car dealer is the same reason you should buy your MFD from a local dealer….Service after the sale!

    Vince


  3. Vince

    I generally don’t spend time reading personal industry blogs; however, your recent discussions about Sharp were called to my attention by a fellow dealer. As I looked through the commentary over the past few weeks, it was clear that you not only latch onto any rumor you can find, but also create your own. Your assumptions have been so far “off base” that they are becoming outlandish.

    As Chairman of the Sharp Dealer Advisory Council, I am privy to current and future business strategies regarding Sharp’s document business. In fact, at a recent Council Meeting, Sharp Corporation’s top factory executive and Member of the Board, joined us from Japan and shared plans for the profitable B2B business which remains a key element in Sharp’s strategy going forward.

    While I realize that you are a salesman for competitive lines, I recommend that you focus on your business rather than creating stories with no basis for truth. It compromises the credibility and integrity of your blog. Your readers’ time would be better served discussing relevant topics of importance to the industry.


    • Troy,

      Thank you for taking the time to post. I appreciate your point of view.

      I have now heard directly from the Chairman of the Sharp Dealer Advisory Board, and indirectly from Sharp USA through the CDA, and I appreciate the opinion of both. But the silence from Sharp Japan has drowned out all other chatter. Yours included.

      If Sharp Japan wants to stop the speculation all they have to do is plainly state that they have no intention of selling their Copier division. I WOULD POST THAT ON THE FRONT PAGE OF THIS BLOG! Sharp Japan CAN purposely mislead you, and the Dealer Advisory Board. Sharp Japan can purposely mislead Sharp USA. BUT Sharp Japan can NOT purposely mislead their stock holders and the public in general. Their silence is deafening!

      To set the record strait, this story originated with Rueters (a very reputable source) not me. I have simply hammered it waiting for Sharp Japan to put an end to the story….. I am still waiting, your opinion not withstanding.

      Vince McHugh


  4. Kool Aid, anyone?


  5. by reading above i understood mr vincemchugh is reserching about sharp for the last few months !!!!!!!!!!!!!



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