Kenwood Corporation History

Company Perspectives:

Our goal is to create a lively, challenging corporate culture in which employees are proud to work. In terms of the company's philosophy, this translates into three corporate objectives: to have a vital, active organization; to take risks and meet new challenges; and to have a company that employees will find attractive.

Company History:

Kenwood Corporation is one of Japan's largest and most successful consumer-oriented electronics companies. The firm designs, manufactures, and markets a broad range of electronic consumer products for markets around the world, including such high-technology items as amplifiers, speakers, home and automotive audio products, receivers, CD players, cassette decks, high-end personal computer components, cellular phones, oscilloscopes, and mobile radios. Most of the firm's revenues come from the sale of audio equipment and products, but Kenwood's entry into new markets such as meteorological satellite receivers is garnering more and more revenue with each passing year. The company's brand name electronics products are among the most popular in the United States, and much of the firm's success can be attributed to the well-managed Kenwood USA Corporation subsidiary located in Long Beach, California. In addition to its U.S. presence, Kenwood also has manufacturing facilities and sales offices in numerous countries around the world.

Early History

Incorporated as Kasuga Radio Company in 1946, a young group of entrepreneurs had decided to take advantage of the growing market for postwar consumer products. Since much of Japan had been destroyed by the effects of World War II, the nation was eager and ready to re-create its national economy. One of the worldwide burgeoning markets included electronic equipment, so the Kasuga Radio Company was established in Nagano, Japan, to manufacture sophisticated high-fidelity electronic components and amateur radio equipment. Within a short time, the company was one of the leading electronic consumer products companies in the nation, and in 1949 Kasuga Radio Company made a major leap in technology-intensive manufacturing when it introduced the very first high-frequency transformer.

Throughout the 1950s, the company continued to develop innovative products for the electronic consumer products industry. Once again, in 1957, engineers at the company achieved a major innovative breakthrough in research with the development and manufacture of the first FM tuner in Japan. At approximately the same time, the company also began producing a wide range of precision test and measuring instruments, including such items as oscilloscopes, voltometers, and regulated DC power supplies. In order to reflect the values and efficiency of a modern company, management decided to change the name of the firm to Trio-Kenwood Corporation.

Fortunately, as the national economy of Japan expanded, Trio-Kenwood rode the wave of continuing economic prosperity and expansion. By the time the 1960s arrived, the company was poised to shift its operations from a national to an international focus. Having already completed a comprehensive strategic plan for expansion in the late 1950s, company management took its first step in 1963 with the establishment of Kenwood Electronics, Inc. in Los Angeles, California. The company was formed as a distributorship and began to market and sell Trio products under the exclusive brand name of Kenwood. The first Japanese firm operating in the United States under its own name, Kenwood within a few years would catapult to the top of the rapidly expanding consumer electronics market in the United States. At the same time, the company established major production and marketing subsidiaries in France, Belgium, Italy, West Germany, Canada, the United Kingdom, Australia, Hong Kong, and Singapore. By the mid-1960s, Trio-Kenwood was mass producing audio, communications, and test equipment around the world. By 1969, the firm had grown so large that it was listed on the First Section of the Tokyo Stock Exchange, and began selling shares of stock to the public.

As Trio-Kenwood expanded overseas, its engineering department continued to design and develop some of the most important electronic components within the industry. During the early 1960s, the company designed and manufactured a solid state amplifier, the first of its kind in Japan. This development signaled a major change within the electronics industry from the use of vacuum tubes to the widespread use of transistors. During the mid-1960s, the firm produced the world's first fully solid state amplifier, and very soon thereafter it began to eclipse the traditional tube amplifiers that had held a stranglehold on the electronics market for years.

Growth and Expansion

The decade of the 1970s was the best for the company in its history. Sales continued to increase, resulting in higher profits and more valuable stock prices. Trio-Kenwood's facilities around the world were manufacturing electronic consumer products at a dizzying pace. By the mid-1970s, Kenwood Corporation in the United States had captured over 70 percent of the amateur radio market in the country. What drove the company forward, however, was the innovative and creative genius of the engineers in its research and development department. In 1976, Trio-Kenwood introduced the first DC amplifier made in Japan and the first amplifier with dual power sources. In 1977, the company manufactured a 40-watt receiver that sold for less than $300, thus breaking a pricing milestone within the industry. Over the following two years, this model of receiver outsold all the other models on the international market. Also in 1977, Trio-Kenwood designed and manufactured both the direct-drive power amplifier, and a concrete turntable base which was widely regarded as eliminating mechanical and acoustical feedback.

During the late 1970s, company engineers did not rest on the achievements made in the mid-1970s. In 1978 alone, Trio-Kenwood designed, manufactured, and patented Hi Speed amplifiers that reacted almost instantaneously to high frequency inputs, patented a Pulse Count Detector tuner that significantly reduced FM distortion, and introduced Variable Bandwidth Tuning that narrowed the I.F. pass band. Not surprisingly, the efforts of the engineers within the research and development department did not go unrewarded that year. The company captured every major award for FM tuners in 1978, as well as having its KD-500 turntable named the best of its class. The year 1979 was just as productive. Trio-Kenwood introduced the first amplifier with multiple stage power sources, and the first Liquid Crystal Display, which was the very first microprocessor controlled hand-held radio of its kind within the growing field of electronic communications. During the same year, the company began to use non-magnetic material for manufacturing its large line of amplifiers and tuners, intending to diminish magnetic fields and distortions.

In the early 1980s, management committed Kenwood to developing car audio products both in Japan and in the United States. The company planned to market its car audio systems and component parts through auto accessories dealers, and this could not have been a better decision. From the beginning of its introduction of car audio products, such as its cassette deck receivers which were the first in the industry to offer automatic noise reduction and an automatic broadcast sensor system, sales skyrocketed. Before long the company was garnering even more awards from various design and engineering competitions. At the same time, Trio-Kenwood engineers were busy developing the world's first Audio/Visual amplifier and system, which had no competition for a full three years after its introduction in 1981. One year later, Trio-Kenwood made another leap into the future with the introduction and shipment of its first VCR.

The rest of the 1980s consisted of an impressive listing of company innovations within the consumer electronics industry. In 1982, the company introduced and sold its first CD player, and later that year the firm introduced the first solid state HF transceiver that was manufactured with a built-in antenna tuner. In another major breakthrough in 1983, Trio-Kenwood designed and manufactured the very first car stereo that included 24 presets. During the same year, the company also brought out its first land mobile radios. One of the most popular and lucrative products conceived by the engineering team was the first car stereo with a 'Theft Prevention Chassis' that was designed to slide in and out of a automobile's dash board, thus breaking all electrical connections, include that of the antenna, but with no lasting, ill effects on the quality of sound or performance of the stereo.

In 1985, Trio-Kenwood introduced the first satellite receiving system, which brought significant attention to the company's research in advanced electronics technology. During the same year, company engineers designed and produced a new VIG-DLD circuit; the first car audio speaker to employ a honeycombed linear plane diaphragm in its design and manufacture; the very first car audio system that featured automatic volume reduction; and the company's first CD player designed and made specifically for the car, featuring a unique suspension that minimized road shock as much as possible. One year later, management at the company decided to change the firm's name in order to reflect a streamlined, efficient organization. Kenwood Corporation became the formal name of the firm and was also used for its brand name products.

By the late 1980s, Kenwood began to reap the rewards of its high-quality electronic products. In 1988 alone, Kenwood won awards for the best mobile security system, the best car CD player, the best cassette, the best tuner, the best amplifier, and the best equalizer. Throughout these years, the company's engineering and research department invariably won various design and engineering awards from a myriad number of associations, publications, consumer groups, and industry competitions.

1946:Kasuga Radio Company is established in Nagano, Japan.

1955:Company plants in Tokyo are mass-producing audio, communications, and test equipment.

1957:Kasuga Radio Company changes its name to Trio-Kenwood Corporation.

1963:Kenwood USA Corporation is established in California.

1968:Listing on the First Section of the Tokyo Stock Exchange.

1980:Audio products for the car are sold in both America and Japan.

1983:Company introduces its first compact disc player.

1985:Satellite receivers are first marketed in the United States.

1986:Company changes its name from Trio-Kenwood to Kenwood Corporation.

1996:Kenwood revises marketing strategy and focuses on high-end segment of the market.

Perhaps even more important for the company, however, was the implementation of an aggressive overseas expansion strategy. Sales offices were established throughout Europe, with the larger operations in France and Belgium, while the offices already established in the United States and Canada moved to more spacious locations.

The 1990s and Beyond

During the 1990s, management at Kenwood continued to engage in an aggressive overseas expansion that had started a decade earlier. In 1993, the company entered into a joint agreement with a government firm located in Shanghai, China, to make compact component systems. In addition, management decided to open new offices in three of the major Chinese cities along the coast. The early 1990s also saw Kenwood expand rapidly in Israel, and by 1992 the company reported sales of over $10 million in that country. This success convinced Kenwood to introduce a series of innovative kitchen appliances for the following two years. In 1995, Kenwood acquired Ariete, a major Italian designer and manufacturer of upscale consumer appliances such as food processors, irons, and espresso machines. In 1996, the company announced that it would expand its existing manufacturing facility in Malaysia, near Johor, in order to double its production capacity for such items as home and car audio products, while at the same time Kenwood's U.S. subsidiary announced that it had finalized an agreement to establish a car audio manufacturing facility in Juarez, Mexico, to produce car amplifiers.

Although Kenwood had garnered a large share of the electronics consumer market by the mid- 1990s, competition was fierce, and there seemed no way for consumers themselves to distinguish the products of one company from another. In light of this development within the industry, management at Kenwood took it upon itself to implement a new marketing strategy to differentiate the company's home electronics products from competitors'. Consequently, Kenwood began to focus on the design and manufacture of new product lines. As a result, by the late 1990s the company had focused on the high-end segment of the market, and introduced such products as touch-screen remote control, home-theater sound features, and a new tuner that cost $2,800.

By most accounts, competition within the electronic consumer products industry was likely to grow increasingly intense. Yet Kenwood had a history of introducing innovative designs in a wide variety of product lines. As long as the engineering and research department at the company continued to introduce highly unique designs, it was very likely that Kenwood would remain one of the leaders in the industry.

Principal Subsidiaries: Linear Italiana, S.P.A.; Sofradore Trio-Kenwood (S.D.K.) S.A.

Principal Competitors: Samsung Electronics Co., Ltd.; Sony Corporation; Matsushita Electric Works, Ltd.; Aiwa Company Ltd.; Philips Electronics N.V.

Further Reading:

• 'An Audio Revamp: Kenwood Pumping Up the High End,' Weekly Newspaper for the Home Furnishing Network, January 22, 1996, p. 81.
• Blackwell, David, 'Kenwood Likely to Win Vote,' Financial Times, December 16, 1996, p. 12.
• ------, 'Kenwood to Close Its Main UK Factory,' Financial Times, June 8, 1999, p. 24.
• 'Kenwood,' Television Digest, August 30, 1993, p. 16.
• 'Kenwood Success in Israel,' Israel Business Today, June 25, 1993, p. 8.
• 'Kenwood Will Expand Existing Production Base in Malaysia,' Television Digest, January 2, 1995, p. 13.
• Olenick, Doug, 'Kenwood's A-V Moves to Stage 3,' Weekly Newspaper for the Home Furnishing Network, November 13, 1995, p. 73.
• ------, 'Surround Sound Chip Licenses,' Weekly Newspaper for the Home Furnishing Network, October 2, 1995, p. 75.
• Ryan, Ken, 'Kenwood's Spring Surprises,' Weekly Newspaper for the Home Furnishing Network, March 8, 1993, p. 49.
• 'Seen and Heard,' Weekly Newspaper for the Home Furnishing Network, January 2, 1995, p. 36.

Source: International Directory of Company Histories, Vol. 31. St. James Press, 2000.

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