For companies struck by scandal, what's the best way to move beyond the crisis? The answer may be to launch new products designed to wow customers so much that the corporate missteps become a distant memory.
Japan's Olympus ($OCPNY) appears to be taking just that approach in the device/diagnostic world. The maker of medical and camera equipment was forced to admit late last year that it hid $1.5 billion in losses over about 20 years. So, after promoting new leadership and forcing the entire board to resign in February, Olympus debuted three high-profile medical products this week. As Reuters reports, the company launched for overseas markets a refreshed gastrointestinal video endoscopy system, a low-cost endoscopic videoscope system and blood vessel sealing and tissue cutting devices.
Olympus has plenty at stake here. The scandal has damaged the company's shares, wiping out almost half of their value, Reuters notes. And executives targeted diagnostic endoscopes and other medical equipment to fuel future growth, so their device-related product launches must be successful.
"Without growth in our medical business, I do not think there will be a revival for Olympus," Reuters quotes the company's incoming president, Hiroyuki Sasa, as saying at a product launch event. (He's currently the company's medical equipment marketing head.)
Struggles continue, however. While Olympus nominated a new board, some foreign shareholders want a chairman more independent than the newly nominated Yasuyuki Kimoto, a former banker from the company's main lender, according to the article. We also learn that shareholders fear Olympus will respond to pressure from creditors and sell large amounts of new equity, diluting value. (Stay tuned for the company's April 20 annual shareholder meeting, when the leadership nominees will be put up to a vote.)
And while the company has a 70% share of the global diagnostic endoscopic market, it only can claim a 13% share of the global energy-based surgical device market. Reuters points out that the company lags in the sector behind Covidien ($COV) and Johnson & Johnson's ($JNJ) Ethicon division. Shareholders are expected to vote on the new leadership at their April 20 annual meeting.
- here's the Reuters story