FAQ (Search categories)
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Growth Strategy
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Why does SHIFT aim for 50% growth each year? Wouldn’t a slightly slower or faster pace be equally acceptable?
SHIFT Group runs its business in a blue ocean market. There is a sizeable latent market, we lead the market. Given this excellent market environment, the crucial issues in terms of future growth will be how to accelerate market share expansion and whether we are able to fully utilize our first-mover advantage.
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Specifically, what kind of projects do “upstream projects” refer to?
In software/systems development project orders, it means obtaining orders for quality assurance services on processes that are considered relatively early-stage processes, such as design, engineering, and requirement definition.
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What is “DAAE”?
DAAE is a new concept, defined by SHIFT, to replace QCD in manufacturing. It stands for “Design,” “Agility,” “Assembly,” and “Economic Quality.”
Under the conventional development method, as represented by the QCD acronym, manufacturing has been pursued with emphasis on “Quality,” “Cost,” and “Delivery.” However, today’s IT industry faces a different kind of market environment, and with an abundance of IT services and products, users now have a choice of services. Acquiring customers requires attractive “Design,” and good “Agility” enables evaluation of services that meet constantly changing user needs and are preferred by customers. In addition, with technologies now becoming commoditized, “creating” a product no longer requires expending man-hours, and consideration for “Assembly” is required. In addition, given the abundance of services today, to make a product marketable, building a business model is more important than building an over-spec product, and in that sense it requires an “Economic Quality” perspective. To build marketable services or products, SHIFT Group advocates these four concepts that will be in high demand in the IT industry, and we provide services based on those concepts.
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How does M&A figure in SHIFT’s overall strategies?
We have positioned M&A as a major pillar of growth within our longer-term growth strategies. M&A serves two main purposes: Securing high-quality human resources, and expanding and strengthening SHIFT Group’s range of services.
After a newly acquired company joins the Group, we seek to provide “ONE-SHIFT” integrated services with emphasis on maximizing synergies with the SHIFT parent company or our Group companies.
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How does SHIFT view consolidated-to-parent earnings ratios in terms of its SHIFT1000 goals?
While using measures such as accelerated M&A to generate synergistic effects between the SHIFT parent company and our Group companies, we aim to accelerate growth in an organic manner. This makes it difficult to isolate the net sales and profit contribution rates of the SHIFT parent company and those of our Group companies, and we have therefore not adopted consolidated-to-parent earnings ratios as KPIs.
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What is SHIFT’s sales policy and what kind of sales force do you have?
In addition to contract orders obtained though inside sales, SHIFT Group is accelerating its growth by strengthening its sales force so as to cultivate new customers and deep plow business from existing customers. Specifically, we have expanded our sales personnel from a team of around 10 at the start of FY2018 to more than 50 in FY2020. Under the guidance of Michio Sasaki, who wasis an independent outside director at SHIFT at the time (currently, director and vice president) and was previously president of Keyence Corporation, we are working to enhance both the quality and quantity of our sales force.
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What are SHIFT’s drivers of organic growth?
Recruiting and retention of human resources. The environment for obtaining contract orders continues to enjoy a surplus of demand. Strengthening and expanding our service providing framework is a crucial driver of organic growth.
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What kind of future growth strategies does SHIFT Group have?
We have formulated a medium-term strategy through 2025 called “SHIFT 1000,” under which we target net sales of ¥100 billion and aim to achieve accelerated growth through three strategies. First, expansion of existing businesses. Second, M&A strategies. Third, platform strategies.
For further details we refer you to the link provided.