Toshiba Retools After Setbacks

On April 1, the Irvine, Calif.-based arm of the Tokyo-based Japanese electronics conglomerate began a new fiscal year with a detailed go-to-market implementation plan, something it has never had before, says Toshiba vice president and division general manager Mark Simons. He also adds that the company is entering the new year on-goal financially, too--something else new for the company, which has struggled in the United States for the past five years.

After a series of management changes, Toshiba does appear to be back on some sort of track. In addition to reclaiming some lost market share, Simons says the company is hitting internal financial goals that his bosses back in Japan insist he achieve. Day sales outstanding, revenue growth and profitability goals were all hit at the end of the last fiscal year, Simons says.

But now comes the tough part: convincing the market that Toshiba is indeed back for real and that it has a long-term, viable position in the market. To wit, Simons himself says the company has struggled with its identity. And IDC reports that growth in the United States slowed in Q1. The onetime choice of traveling businesspeople everywhere, the company is under siege. Walk up and down the aisles of any commercial airliner and you'll often see more Dell, HP and IBM devices than Toshiba units. So, too, has Sony eclipsed Toshiba, at least in terms of brand image, awareness and market positioning. The slick Sony Vaios are the choice of many executives with eyes for fit and finish and arms for lightweight and portable devices. Then there's Apple, which none of the notebook makers can touch when it comes to software integration.

Layer on top of brand issues the fact that Toshiba has not been an easy company to deal with in the past nor has it been particularly channel-friendly in certain accounts, and Simons has a tough assignment. In a recent trip I took to his company's Southern California headquarters, Simons outlined his agenda for me. His plan for completing a turnaround is surprisingly straightforward and simple: Leverage the brand to define the company's unique capabilities in digital convergence--remember, Toshiba makes everything from screens to hard drives to digital cameras--while establishing ties to new resellers.

On the former, Simons says his company is actively looking to spearhead solutions for small-business users and even home consumers looking for integrated "converged" solutions that tie all of their digital content together, be it data, video or audio. Remember: Rival Dell doesn't even have a tablet to offer Corporate America. In the corporate market, where Simons estimates Toshiba has as much as 30 percent of the market cornered, his team is pursuing the desktop-replacement market with a vengeance. He has new rewards set aside for partners that can achieve competitive wins and bring new business Toshiba's way. And he's also looking to pursue more alliances than the company has considered in the past. The light went on when it discovered a fairly straightforward promotion with Microsoft helped win scores of new customers in the salesforce-automation market. Now the company is considering a raft of new partners to help it pursue all kinds of opportunities in vertical markets where its notebooks and tablet computers could be a natural fit.

On the latter front, the company reports remarkable progress. An internal goal to recruit 500 partners resulted in signing up close to 3,000 new allies instead. Most have never sold Toshiba computers before, Simons notes, so the Toshiba baggage they carry with them is very little, which is a good thing for a company that has alienated more than its share of partners. The newcomers, however, see the company as a first-tier brand that doesn't have the baggage that either Dell or HP carry today.

That, of course, has put a smile on the face of Simons, who says that job one is persuading reseller allies that the company isn't another "faceless workhorse or unknown soldier."

"You know, I used to work at Smith-Corona, where we had an excellent product in our typewriters, an excellent brand, but a market that was crumbling. Now it's just the opposite. Toshiba has world-class products, a market that is literally exploding and a brand that we are working to fix," Simons says. "Given a choice between the two, I'd much rather have this challenge."

So, too, may many of those who have joined his company's Preferred Partner Program.