Toshiba's exit from Singapore: What went wrong?

Toshiba will be pulling out of Singapore. The news broke late last week stating stiff competition in the TV and Home Appliances market in Singapore as the reason.

According to reports on The Straits Times and SPH Chinese newspaper Shin Min Daily News, the brand has been sending out notices to its retailers of its departure from the country. Meanwhile after-sales customer service will still continue, said the reports.

A Toshiba spokesperson has since confirmed the move to Marketing but declined to comment on the reasons behind the move or how it will impact Toshiba's marketing team.

Sandeep Khanna, who formerly held regional marketing roles at LG and Nokia, said Toshiba pulling out of these very competitive categories of Television and Home Appliances was not a surprising one. "The magic is always in the product," he said.

In both these categories, innovation is a key hygiene factor to begin with. He added that unless there is a strong and compelling product pipeline, brand will not even be in the game in these highly competitive categories. While several news articles have indicated that Toshiba was losing out due to stiff competition from South Korean brands, which have better specs and superior products, the problem goes deeper than that.

“The problem possibly underscores a lack of a clear business and marketing strategy, not just tactics. The starting point is having a compelling vision followed up with clarity on where to play and how to win. If these are not universally aligned across functions, then it is very hard for companies to compete with better resources and more aggressive competitors,” Khanna said.

Quoting Jack Welch, ex-chairman and CEO of General Electric between 1981 and 2001 and his 1-2 principle, Khanna explained that in any product category, if the brand is not in the number one or two position, it is not worth being there.

“What this really marks is the need for focus and sacrifice in building brands today. Amongst Japanese conglomerates, this is a particular issue as they stretch the brand across too many categories. Ultimately this level of brand stretch can be counterproductive,” Khanna said.

However, he was quick to point out that several South Korean brands have also succeeded despite the diverse "brand stretch" and product ranges. This, he attributes to their hefty investments in technology and build ups of strong distribution and brand communication channels.

Ajit Varghese, CEO, Maxus Asia Pacific, added that the move is probably a right one for the brand as it will allow the brand to focus on a market where it can be in the top three.

In increasingly tough market conditions, Varghese added that more and more brands will need to choose which markets they want to focus on and which they need to deprioritise.

“The questions brand need to ask in these situations is whether they want to be in growing and developing markets or do they want to fight for market share in already saturated economies?” he said.

Courts has told Marketing that there will not be an impact on its sales numbers with the brand pulling out. Best Denki and Harvey Norman did not comment.