Chief operating officer, Toshiba Lighting Systems, Europe

Not everyone welcomes us
At Frankfurt, the lighting industry wasn’t too happy to see a new player entering the business. There are two reasons. The first is that it’s a very well established industry with no new players for many years. Second, we’re coming into the LED business only.

We don’t have a legacy in the European lighting business
That’s both an advantage and disadvantage. We’ve been in the business for 120 years in our domestic market in Japan of course, so we know the business and all the key players know that. There’s now a technological disruption, which means we can position ourselves as a key new player with key new technologies.

We want 20 per cent market share by 2020
Our target is to be a key player in the market. What we want is to establish strong, long-term relationships with our customers.
We need to promote our products to architects, installers, electricity companies, maintenance companies and so on. We have to find projects, explain the advantage of our products, then we have to put our product through wholesalers. It’s a big task and it takes a long time. But the point is that at Toshiba we have high quality products so it will build on itself in a positive circle and we will have more and more business.

The Big Three model is over
The landscape [of the big lamp manufacturers Philips, GE and Osram] will change. There will be four key players in lamps, two of the existing players and two Asian players, probably one from Japan and one possibly from Korea. The battle is now for the future. You’ll see that in 2011 and 2012 – a big battle to see who will succeed. The game is open.

Existing players need to change fast or they will fail
They have to react very fast. They have to change their model to the LEDs business or they will have great difficulty surviving. The problem is it’s very difficult when you are a well-established company with cash-cow products to move your company to the new technology. I come from the PC business and I saw there how very big companies, such as Compaq, can fail. You will fail if you don’t see the evolution of the market.

Philips is doing the right things
Philips is moving very fast. It has reorganised itself and shown great capability in developing new products. It’s well established and it’s in survival mode.

The lighting industry is more relationship-based than the electronics business
It’s because when you sell lighting it’s for a long time and for years it has been the same companies. This is an advantage for us because we can tailor our business model to this emerging market.
Rather than forcing the lighting industry to accept an electronics model we will adapt the model to the market. We are building everything from new: our relationships, everything. So we can start from scratch. Our strategy is to use channel partners. In business-to-business these will be wholesalers such as Rexel on the continent and Edmondson in the UK. We want to be a long-term player.

The UK market is good in the commercial side, but tough in retail

It’s difficult for us in business-to-consumer in the UK because prices are very low. That’s probably because competition is stronger in the UK than in the [mainland European] market. The market shares are also different. For example, [by comparison] Philips has a low market share in business-to-consumer and it wants to react to that. And to react you have to lower your prices and have a price war.

Controls is the next step for us
We have a smart building management system that we will introduce to Europe through the lighting division. It’s a different business model; our strategy is to provide the building management system around the installations of our products. And through companies like Carrier in the heating and cooling sector we have a route to that market.

Simon Fisher

General manager, indoor, design & application, GE Lighting

Nick Farraway

Senior vice-president at Havells Sylvania