Channel Go-to-Market changes driving Sharp Electronics growth in Canada

Carmine Cinerari, who has led Sharp Electronics Canada since 2008, talks with ChannelBuzz about the company’s re-emergence since its acquisition by Foxconn, and particularly how channel-focused changes in Canada have grown the business.

Carmine Cinerari, President, Sharp Electronics Canada

The first half of the decade that is about to end was not kind to Sharp Electronics. The Japanese multinational was beset with financial problems, and the decline in their television business saw them exit that market in North America, selling off their North American operations to a Chinese manufacturer at a fire sale price. Three years ago, Taiwanese contract manufacturing giant Foxconn purchased a controlling share in Sharp for $3.6 billion, and made major changes to their back end operations that put them on a path to right the ship. In Canada, those changes were accompanied by a reorganization of the Go-to-Market strategy, which saw the company greatly increase its investment in its channel.

Carmine Cinerari has been at the helm of Sharp Electronics Canada as its President through this period. Having joined Sharp in Canada as a Product Manager in 1996, he rose through the ranks to become its President in April 2008.

“Today we have a healthy Canadian business,” Cinerari told ChannelBuzz. “It would be misleading to say that we didn’t suffer some reverses in Canada. It’s never good when the parent company is having issues.”

The turnaround in Canada began with the overall changes that Foxconn brought to the business.

“Foxconn is a huge electronics manufacturer, number four globally in terms of electronics revenues,” Cinerari said. “While Sharp’s production was in the billions of devices, some of the Taiwanese companies, including Foxconn, were in the trillions. Once the balance sheet was stabilized by the Foxconn capital injection, Sharp has had eight quarters in a row of profitability and sales growth.”

Sharp has benefitted on the one hand from being a Foxconn subsidiary, and being able to leverage their assets, and on the other, because Sharp is still run as a separate company.

“In terms of our DNA, that has been left alone,” Cinerari said. “We are an independent company. But Foxconn has been good at letting us leverage their global supply chain and manufacturing power, as well as their customer relationships and channel. Our Canadian dealers would say that it made us more stable, but it has been on the back end, on the manufacturing side. There has been a lot of collaboration between our engineers and theirs.”

The global changes that Foxconn brought in were paralleled by changes made specifically in Canada, which Cinerari said have had a significant impact.

“The big thing here is that three years ago, we reorganized the Canadian business around the way we go to market, and appointed dedicated folks to both the channel and direct,” he stated. “We added dedicated administrative support, technical support, and solutions teams for the channel, and we are better able to serve the channel as a result.”

Cinerari described the Canadian operation as a very flat operation, organized around the Go-to-Market strategy, and focused on the three components of the business in Canada: print, visual solutions, and consumer. About 60% of their revenues today are print and MFP, 30% is from commercial displays and 10% consumer.

“We have a channel leader for our print business, and our visual solutions business and our consumer business,” he emphasized. “The three channel leaders report into me, along with the direct teams.”

Cinerari said that the structure of this operating model, with very little organizational boundaries, lets Sharp leverage its competitive strengths.

“Many of our print competitors talk about selling services, with mixed results,” he stated. “We have a unique model in this market in that we have the hardware and interactive display business to complement the print, and we can offer that type of product to the dealer and to their client.”

The results, Cinerari said, have vindicated the changes.

“Three years later, we have had growth in both our channel and direct business.”

The B2B business has also been strengthened by Sharp’s 2018 re-entry into a computer market it had exited in 2010, with the acquisition of Toshiba’s personal PC business, Toshiba Client Solutions, and their Dynabook brand. The Client Solutions Group was rebranded to Dynabook as of January 1 in Japan and April 1 in other markets, to strengthen the Dynabook brand going forward.”

“Toshiba does still compete against Sharp in the print market, so keeping the Toshiba name for the unit wouldn’t have made sense,” Cinerari said.

Most of the business in Sharp Electronics Canada’s three areas of focus is channel.

“We have a direct business for print, mainly in the GTA [Greater Toronto Area] and with a small sales team in Montreal, but about half the print business is channel,” Cinerari indicated. “100% of visual solutions is channel, as is the consumer business.”

Those channels are fairly broad and complex.

“The consumer business is 100% retail, with specialty appliance dealers – except for the calculators.” Cinerari said. “That’s a mix of mass merchants and office products dealers and independents.

“The display side is mainly ProAV accounts and the big three distributors – Synnex, Tech Data and Ingram Micro. About 70% of that is the ProAV channel.”

The print channel is a combination of different tiers of dealers.

“A lot are long-time partners,” Cinerari said. “That channel tends to be a little more slow-moving because it’s harder to open new dealers. There has also been a real trend to consolidation in the big markets, with dealers buying other dealers.”

Cinerari stressed that Sharp’s value proposition to partners is straightforward.

“We can offer the channel the ability to create more solutions because of our product mix.”