Epson remains fighting fit in Skinner's hands
- 24 August, 2008 22:00
It’s not surprising since as general manager, Skinner has run the Japanese manufacturer’s local business for more than a decade.
He started out as an electrician and worked in sales and engineering roles in the lighting industry before joining Sanyo in 1990, which then still had a local operation.
He worked at Sanyo for five years as product manager for its business systems, which included dictation equipment, facsimiles and cash registers.
In 1995, Skinner joined Epson as national manager just as it was emerging from tough times. “Epson had been heavily involved in the PC industry – they had lost a lot of money and had divested out of it,” he says.
The company then entered the market that would provide it with ongoing success – inkjet printing. “This wonderful new product called the colour inkjet came through. Our technology was supreme and we went through rapid growth.”
This expansion saw Epson nearly triple its revenues over the following three years, says Skinner. “We went from being a loss-making company to being a significant profit maker – we have been profitable ever since.”
As a result Epson grew to a size where it could create a general manager role, which Skinner took on.
In his time at the company Skinner had steered Epson through some challenging variations in the market.
One of his first tasks was to adapt the company’s retail strategy to deal with the emergence of large retailers, he says. “My first years were spent evolving Epson. A lot of the industry was small resellers – there were a lot of mum and pop shops. Noel Leeming and Dick Smith were starting to come through and they were trying to add PCs and peripherals to their products. I had experience at Sanyo putting our facsimiles into mainstream retail.”
While the inkjet market gave Epson a new lease on life, growth in this market has since plateaued as the printers have become commoditised, says Skinner.
He concedes that the company did suffer some revenue decline as a result, but says this has been reversed in recent years largely on the back of the company’s introduction of individual ink cartridges. “About 18 months ago, we went to total individual cartridge machines, [which] improved the price value of consumables to consumers and promoted that heavily – we saw a very good lift in our sales. It met what consumers wanted — low-cost individual cartridges.”
The public’s attitudes to buying consumables have also changed, says Skinner. “There has been a shift by consumers to buying genuine products. That’s because we have given them the price equation they were looking for. You do pay a premium over a clone, but we’ve pushed the advantages such as ink longevity, and colour and light fastness.”
Epson now has ink cartridges that sell for $9.99, which he says is a reasonable price.
Skinner points out that producing quality ink cartridges is not an inexpensive exercise, adding Epson employs a high level of technology to ensure a clean air environment in its consumables factories. “If you just want to take any old ink and put it into a plastic container – it is cheap to do. You can make silicon chips in the environment where we’re making ink cartridges.”
Meanwhile, Skinner acknowledges that Epson faces particular challenges because to date it has focused mainly on the consumer inkjet market, which makes it a niche player in a very competitive industry.
“We are very niche with inkjet technology, but we go a long way with that. In the retail market Epson has been very photo-centric – that has done us a lot of good, but it has probably niche-marketed us tighter than we would like to be.”
The company is now branching out into the commercial printing market and plans to launch a range of office-based inkjet products in coming months, he says. “Epson is starting to push its technology into the business arena. We have been focussed on the consumer market. That has been difficult because the price contraction and commoditisation has all happened at the consumer end.”
Epson has been further sheltered from dropping margins in the printer market by its strong LCD projector business, says Skinner. “We are very strong in the LCD projector market – Epson is the number-one LCD projector company by some margin. And we’re a market leader here.”
This market has also been affected by commoditisation, especially at the consumer end of the market. “The home entertainment projector market has been hit by the lower cost of LCD and plasma big screens and the downturn in the economy.”
However, the corporate and education projector market are still strong, Skinner adds. “The education market has provided a lot of growth for us. LCD projectors have become high on the desired list for all schools.”
While conceding that Epson’s business is not “totally recession proof”, Skinner believes the company is in a reasonably good position if a recession does happen. “A big part of our income is from consumables – ink and media. If there is a recession it will still be affordable to print with Epson.”
Skinner’s success at Epson saw him become the first New Zealander to be appointed as a full director of the local subsidiary about four years ago. “The business was always owned by Epson Australia, so the managing director of Epson Australia was always on the board of Epson New Zealand. It was the first time ever a local person was placed in the role.”
In addition to maintaining a consistently profitable business, Skinner sees Epson’s high staff retention rate as a sign of success. “That’s a very big thing these days. I think this is a testament to the fact that it is a place where people want to work and want to stay. That makes a successful company – making sure the environment is a place people just want to be.”
Skinner says he tries to keep the bureaucracy inherent in any large multinational at a minimum. “We have a culture where you are not micro-managed. We have a lack of bureaucracy, but not a lack of accountability.”
Another cause of satisfaction for Skinner is Epson’s support of the local chapter of the International Taekwondo Federation, which follows a passion of his own. ”We have been involved with it for the past 10 years. When we started New Zealand was not in the world rankings, now it is ranked in the top five.”
The sport has helped develop many young people, often from less fortunate backgrounds, he says. “We’ve given lot of opportunities to a lot of kids. Through the club they learn the application of discipline, reward, respect and recognition. I wish we could push it through to more kids because it really works.”
While Skinner has hung up his taekwondo uniform years ago, he focuses on keeping fit and eating right. “It is important and not a lot people do it. I go to the gym six times a week – they are not long sessions, but I make sure I go.”
Q + A
What is your favourite gadget?
What is your favourite website?
Star Alliance - it feeds my travel bug
What is your favourite sport?
Kickboxing, ITF taekwondo, rugby and boxing
What is your favourite cocktail?
If you could have a cup of coffee with anyone, dead or alive, who would it be?
Martin Luther King
What has been the most important advance in technology?
What book is on your bedside table?
The Persimmon Tree, Bryce Courtney
If you were not in technology, what would you be doing?
Who knows, but most likely something in marketing and selling
Who is/was your mentor?
No one person, but I have been fortunate to have come across many people whom I have been able to take direction from, not always from the business community.