Brother targets growth with CS B2027 strategy
March 11, 2025
Brother shifts focus to profitability and industrial expansion while potential cost-cutting and price increases loom.
Brother Industries has unveiled its latest medium-term business strategy, CS B2027, outlining ambitious targets for the next three years. The company aims to achieve sales revenue of 1 trillion yen (approximately $7.5 billion/ €6.9 billion) and an operating profit of 100 billion yen ($750 million/ €690 million) by fiscal year 2027.
The strategy focuses on transforming Brother’s business portfolio, with a particular emphasis on expanding the industrial sector. The company plans to increase the industrial sector’s share of total sales revenue to over 40% and invest 200 billion yen ($1.5 billion/ €1.38 billion) in growth initiatives, including mergers and acquisitions. Additionally, Brother has committed to returning 140 billion yen ($1.05 billion/ €966 million) to shareholders over the three-year period through treasury stock acquisitions.
Printing & Solutions: Profitability First
The Printing & Solutions (P&S) business remains a core part of Brother’s operations. However, the company is shifting focus towards profitability rather than aggressive expansion in its traditional office and home printing segments. The key performance indicator (KPI) for this division is operating profit, reflecting a strategy aimed at maximising returns rather than increasing market share.
This focus on profitability may lead to higher prices for consumers or significant cost-cutting measures within the business. With a reduced emphasis on expanding the market, Brother could introduce pricing adjustments, streamline product lines, or reduce operational costs to meet its financial targets. The impact on customers remains to be seen, but a tighter margin-driven approach could alter product availability and affordability.
At the same time, Brother sees industrial and commercial printing as a growth area. The company has categorised Industrial Printing, including its Domino Printing & Automation business, as part of its growth division, with sales revenue as its primary KPI. This signals a strong commitment to expanding its presence in industrial and commercial labelling markets.
Restructuring for Long-Term Growth
Brother has structured its businesses into four categories:
- Growth Business: Industrial Printing, Domino, New Businesses, and Commercial & Industrial Labelling, with a focus on sales revenue growth.
- Core Business: Traditional office and home printing, where profitability is prioritised over expansion.
- Profit-Driven Business: Sectors such as Personal & Home and Nissei, where Brother aims to balance revenue and profit margins.
- Profitability Transformation Business: Industrial Sewing Machines and Network & Contents, with an emphasis on restructuring for sustainable profits.
Challenges Ahead?
Brother’s CS B2027 strategy outlines an ambitious plan, but several external factors could influence its success. European legislation, particularly around imaging Equipment Ecodesign legislation, may impact how Brother operates in the region. Additionally, intense competition from other OEMs and third-party manufacturers could challenge its profitability-focused approach. The company’s strategy aligns with its broader vision, “At your side 2030,” which aims to enhance productivity, contribute to society, and support environmental sustainability.
While Brother aims to solidify its market position, adapting to regulatory changes and responding to competitive pressures will be crucial. The next three years will test whether its strategic shift can deliver sustainable growth amidst these challenges.
Categories : Around the Industry
Tags : Brother Business CSB2027 Medium Term Strategy
