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15 replies

Ricoh Ikon Letter

AP Art Post (Guest)
To: All Ricoh Americas and IKON Employees

From: Matt Espe
Date: March 30, 2010

Subject: Ricoh Americas Leadership Structure and Integration Planning

I am excited and energized to lead Ricoh Americas into the future. Since joining IKON eight years ago, I have worked very closely with Ricoh, first as an independent dealer and even more closely over the past 18 months as a Ricoh company. I believe without question that the combination of Ricoh and IKON brings together technology, service expertise, sales coverage, dealer partners and a team of employees that is unparalleled in our industry.
I intend to build on the leadership position we have in the U.S. to continue to increase our market share and deliver the best document management solutions for our customers.

We have a lot of work ahead of us, but also a tremendous opportunity. As we enter FY10 and develop our integration plans, we will pursue a balanced business approach with three key objectives:

 Growing revenue and increasing market share through an unrelenting focus on our customers
and our dealer channel and by delivering the most valued products and services in the industry.

 Increasing our efficiency and creating the most competitive organization in the industry.
 Attracting, retaining, motivating and developing the best team in the industry as an employer of choice, while remaining committed to living our values and conducting business with the highest level of integrity.
In order to accomplish these objectives, I am pleased to announce a new Ricoh Americas Corporation leadership team that will report to me and have responsibility over the entire Ricoh Americas organization, including IKON. In addition to the day-to-day operations, this team will work closely together on developing a multi-step integration plan for Ricoh and IKON in the U.S. The following leadership structure will be effective April 1, 2010:

 Martin Brodigan will take on a new role as Executive Vice President and CFO, with responsibility for leading the Finance organization for Ricoh Americas Corporation, with both Dennis Dispenziere and Henry Miller reporting to him. He will also have responsibility for Ricoh Canada and Ricoh Latin America, with Glenn Laverty, President and CEO of Ricoh Canada, and Peter Stuart, President and CEO of Ricoh Latin America reporting to him. In addition, Martin will be
responsible for the Business Development team led by Vince Roma. Martin brings a strong
background to this role, most recently as President and CEO of Ricoh U.S. Prior to his current role, Martin held the position of CFO for Ricoh U.S., served as President of Ricoh Canada for eight years, and held other leadership positions throughout his 19 year tenure with Ricoh. Martin will bring strong leadership and experience to his new responsibility.

 Jeff Hickling will take on a new role as President and CEO of Ricoh U.S., with a leadership team who will have operational responsibility for both Ricoh U.S. and IKON. Jeff’s background and experience will be instrumental leading this team and developing our integration plans. In his current role as IKON’s President and Chief Operating Officer, Jeff has responsibility for IKON’s
U.S. sales, services and operations functions. Since 2005, he has held responsibility for supply chain and customer administration, and played a key role in IKON’s Oracle stabilization. Jeff will send additional information to all U.S. employees shortly to provide more detail about the Ricoh
U.S. structure and integration planning.
Rounding out the leadership team for Ricoh Americas Corporation are the following direct reports:

 Mark Hershey, IKON’s Senior Vice President and General Counsel, will expand his role to Senior Vice President and General Counsel for Ricoh Americas Corporation, with Allen Hans reporting to him.

 Hede Nonaka, Ricoh’s Executive Vice President of Marketing, will become Senior Vice President
of New Business Development, with responsibilities including strategic alliances such as IBM. Dan Murphy will report to Hede.

 Shun Sato, Ricoh U.S.’s Senior Vice President of Corporate Marketing, will succeed Hede
Nonaka as Senior Vice President of Marketing for Ricoh Americas.

 Tracey Rothenberger will continue to lead IT as Senior Vice President and Chief Information
Officer, expanding to a Ricoh Americas role.

 Donna Venable will continue to lead HR as Senior Vice President, expanding to a Ricoh
Americas role.

 Ike Kakegawa, Vice President of Environmental Sustainability, will continue to have responsibility for environmental initiatives.

 Akira Oyama, Joji Tokunaga and Steve Poole will form the Strategic Management Office to help lead our integration planning and improve strategic alignment.

This team brings a deep understanding of our company, along with exceptional leadership and an unwavering commitment to building the strongest organization in the industry. They will lead with the following guiding principles:

1. Providing clear and well communicated direction throughout the organization

2. Empowering the organization to take action

3. Creating accountability for delivering on commitments

4. Developing a strong team through a rigorous organizational vitality process

I am looking forward to blending our cultures, including foundational elements such as vision, mission and values, organizational vitality, and diversity and inclusion. Remaining focused on our values through the integration planning will help us continue to build a stronger company where employees want to work and
where customers want to do business. One theme that Ricoh uses to define their vision, mission and values is “Imagine the Possibilities.” It is also a very fitting theme for our integration planning and for FY10, as we imagine what we can do together as an integrated organization.

As we move forward with our integration planning, we will provide you with regular communications and updates. I realize that you will have many questions, and although it is very early in the integration planning process, we will do our best to answer your questions. I encourage you to email your questions
to QuestionsRicohHQ@ricoh-usa.com or headquartersquestions@ikon.com.

To reiterate, this next phase of integration planning will take time and collaboration. We will also continue to build on the work of our business improvement teams and synergy efforts already underway. I am counting on all of you to stay focused on selling, servicing and meeting the needs of our customers and
dealers, and helping us achieve our objectives as we head into the new fiscal year.

During the next several months, I will be visiting many locations and look forward to meeting you and hearing your thoughts in roundtables and meetings. I am proud to lead this organization, and am confident that we have a bright and promising future. Together, we will make Ricoh the strongest, most
competitive organization in our industry.
Thank you,
Original Post

Replies sorted oldest to newest

G GMANDocusultant Elite P4P'er VIP
4. Will your branding change?

For the foreseeable future, we will maintain a separate Ricoh Business Solutions channel and IKON channel to ensure consistency and continuity with our Dealers and customers.

5. Will this announcement impact how I use iSuite or PartsNet?

No you will continue to utilize iSuite and PartsNet in the same fashion currently being used and will see no changes to the systems as a result of the integration planning.

At your service...
T txeagle24Maven
Email I sent to the email address referenced above:

How will the changes that were announced today affect the RFG Dealer Channel? I work for a Lanier Dealer that was formerly a Gestetner Dealer. One of our primary concerns over the past several years is that RBS & IKON consistently undercut us on price, not only for hardware but also for service & supplies, which is where we make our profit. Additionally, there are currently 9 other entities (including RBS & IKON) in the Dallas-Ft. Worth market selling the same Ricoh-manufactured product, so considering the number of feet on the street from RBS & IKON (nearly 90 reps in D/FW, so they are in every deal), the independent dealer rarely stands a fighting chance when the time comes to address budget concerns, particularly considering the condition of the economy over the past 2 years. How does Ricoh plan to address these concerns, outside of the “Rules of Engagement” that were put in place a few years ago but only apply if the dealer holds a significant amount of the MIF, in order to help the independent dealer channel maintain profitability?
Old GloryOld GloryMaven VIP
What makes you think that Ricoh has any major level of concern about dealer profitability? Maybe behind closed doors their perspective is that dealers are a necessary evil for the time being until Ricoh can get the coverage they need from Directs. Every box they can sell, even heavily discounted, is more profitable to them then any box that you sell. The Rules of Engagement may have been put in place to stem the tide of defections because they still need the independents for now. In 2-3-4 years, they may be more than willing to give up the independents, especially those in major market areas.
G GMANDocusultant Elite P4P'er VIP
Now that you raise the subject of Consumables, Ricoh allows IKON to purchase heavily from KATUN. IKON has always been notorious for buying non-OEM parts and supplies at deep discounts, which is one of the reason they had a poor reputation for service. Yet, it also helped IKON steal many a deal. Possibly, this practice will change for Ricoh products and they will only source Third Party Aftermarket for theie Canon base at this time.
AP Art Post (Guest)
It will be interesting to see where the loyalty lies with this group of execs. I can remember shen they brought in Jim Ivy in Feb of 2000 (gee, it's been that long!), he moved in most of his guys from Savin. For the most part Ivy did an excellent job with Ricoh and Savin.

I'm thinking Ricoh turns even further away from the Dealer Channel in the years to come.
L Laxfan25Senior P4P'er
Old Glory, you are way off-base regarding profitability to Ricoh on an $8,000 sale through the dealer or through their direct channel. When Ricoh sells to the dealer, the dealer is responsible for all ofthe end-marketing expenses related to the brick-and-mortar + sales rep expenses. When Ricoh (or other mfrs) run their own branches, there is a tremendous amount of overhead associated with that operation. Hence, this is one reason why Ricoh's dealer division, while smaller, was the only part that was profitable. RBS and IKON are a major drain on the company and this is the reason they are about to do the consolidation - to try to stem some of that bleeding.
D DeanwMaven VIP
I think we make an error when we assume that Ricoh selling a machine to an end user for $8k is the same as Ricoh selling a machine to a dealer for $8k. When Ricoh sells a machine to a dealer for $8k they are done, when Ricoh sells a machine to an end user for $8k they have other costs, including paying the street rep and his manager so I don't think it is not true to say the $8k is the same to Ricoh from either source.
M MegaJunior P4P'er
It would seem that it all depends on where you structure your profitability.
Since Ricoh is a Japanese manufacturer and sells its product to the US Ricoh company and then US Ricoh sells it to a dealer or direct, the profits can be structured to be very little if any in the US and very profitable in Japan. Ex: cost to manufacture is 10, sell to US mfg. sales concern for 20, US concern sells it for 22, dealers or direct sell it for 24. The cost of goods to the US is high and the profits remain in Japan and very little profit is made in the US, hence less taxes paid here and more money at home in Japan. Remember these manufacturers are in the business of manufacturing and panic when inventory is not sold off and then they create new distribution channels to move inventory. Profitability of the distribution channel is of minor concern only in as far as it enables sales distribution and the continued ability to manufacture. If anything, it is volume of units sold in the US that is of greatest interest. So they play a fine line of placating dealers to keep them selling vs losing them or until a better distribution sales model comes along at less cost. Or so I think.
My 1.5cents worth of thoughts . I'm not an economist but I know how to spell it.
Pirate MikePirate MikeJunior P4P'er
Something to think about as well, adding to what was mentioned by Mega. The Japanese division is making the bulk of their profits on the manufacturing of toner. That is the money tree for them. They sell to Ricoh USA and they work through their channels to distribute the boxes. The ultimate goal is to “place the box” Ricoh USA makes their overhead by the profit on the box moving it to the Dealer and other channels. The profit make by selling the box is what keeps the “Reps paid and the lights on” The profit made by the service annuity is what is in it for the dealer or branch. Due to the economies of scale in manufacturing the larger they are the more advantageous it is for them to reduce their cost of manufacturing. As it goes down they start to become more competitive and have the ability to show more of a profit on the hardware side.

When I started with Minolta they were roughly a 4 Billion dollar company, about the size of IKON before the merger. When Konica and Minolta merged they were roughly a 7 Billion dollar company. Jun went around the country talking to each direct branch about the “Road to Tier One.” How Konica Minolta’s vision was to be a tier one player like Xerox and the like. They talked in depth about how hard it was for them to compete with the Xerox’s and the Ricoh’s due to their size and how just growing to XXX would double their profit on the Japan side and afford all of us a better place to work. I do not remember in his speech how much they had to grow by but it was like a 20% growth factor to cut their manufacturing costs in half.

I have watched this closely trying to learn how the pieces relate to each other and try to understand the economics but they are pretty intricate.

Just my two cents,

Pirate Mike
Digital Printing and the Pirates that Sell it!, http://digitalprintingevolution.blogspot.com/
AP Art Post (Guest)
Ricoh Covergence is next week, would love to hear everyones take on Espe and the others, of course with a dealer meeting they'll sign the praises of the dealer, however there may be a slip up or two and would like to hear those. Can anyone take pictures while they are there for us? I can then post on the boards here for all of us.

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