Daikin’s strategic management plan

Image by Gerd Altmann from Pixabay

Daikin has recently formulated its strategic management plan “Fusion 25”, which extends from fiscal year 2021 to fiscal year 2025. In this plan, the company explores themes leading to sustainable growth and development by viewing the world and its goals in the coming 10 to 20 years from a long-term perspective. To expand its business and continue to grow and develop while contributing to the environment and society, Daikin has established three growth strategy themes: “Challenge to Achieve Carbon Neutrality,” “Promotion of Solutions Business Connected with Customers” and “Creating Value with Air”. In addition to these, it set “AC Business in North America” as one theme from the perspective of strengthening existing businesses. Also, in India, where large market growth is expected, it strengthens local production and expands its business aiming to make the region one of the major bases of its global business. Furthermore, Daikin raised five themes to enhance the management foundation: “Strengthening Technology Development Capabilities”, “Establishing a Robust Supply Chain”, “Promoting Digital Transformation Supporting Innovation”, “Creating Market Value and Enhancing Advocacy Activities” and “Improving HR Capabilities Through Advanced Diversity Management” for a total of nine key themes that aim to ensure Daikin success in the era of the new normal. In terms of the quantitative targets, Daikin has set a sales target of 3.1 trillion yen and an operating profit margin of 10.5% in fiscal year 2023, the third year of “Fusion 25”, as a mid-term implementation plan and will make upfront investments that exceed 800 billion yen for further business expansion. Targets for the final year of fiscal year 2025 are sales of 3.6 trillion yen and operating profit of 430 billion yen (for an operating profit margin of 12%). For carbon neutrality, with the base year set at 2019, Daikin aims for a reduction (in terms of market ratio) of 30% or more in net emissions in 2025 compared with emissions during business growth without implementing reduction measures, and 50% or more in net emissions in 2030 toward achievement of 2050 carbon neutrality.