Now that the transfer of the Olympus Imaging division has been completed, thoughts about OM Digital for 2021 may be appropriate. Whenever a large company with activities in a multitude of global markets changes ownership there are a number of actions that need to be taken.

NOTE: Click on images to enlarge. Photographs have been added to serve as visual breaks.

No doubt many photography websites and their readers will be focused on product-related issues as they anticipate what OM Digital Solutions needs to do to move forward in the near term.

I think this is one of the least important issues facing OM Digital Solutions over the next 6 months. We may see some product related activity towards the back half of 2021. Until then, focusing on product issues is putting the cart before the horse.

Complete and verify audits of physical inventories, schedule near term production volumes.

Before diving in to product development and engineering, OM Digital Solutions needs to take care of immediate issues associated with the purchase of the Olympus Imaging division. One of the high priority items is to complete and verify audits of physical inventories throughout all of the previous Olympus Imagining operating offices around the globe.

I assume that change-over inventory pricing would have been part of the overall agreement that was negotiated between the two entities. Taking over existing inventories may have come with some kind of discount against book values. It is in the interests of both parties to make sure that audits of physical inventories are completed in an orderly and accurate manner. All inventories would then need to be secured and controlled by OM Digital.

An assessment of the anticipated unit sales of specific products would need to be done so near term production volumes of individual products can be calculated, and necessary manufacturing scheduled.

Review existing headcount and determine distribution strategy.

Another high priority item is for OM Digital to reduce its fixed costs of operation with the former Olympus Imaging division. A large part of this will entail reviewing all existing headcount around the world, and making adjustments as necessary to lower fixed costs.

This is a painful, but necessary step for OM Digital. Obviously I don’t have a full picture of what is transpiring, nor would I ever have access to that kind of information. The process of headcount reduction is underway.

Robin Wong, a former Olympus Ambassador, did report that the Olympus Malaysia office was closed in late 2020. One of the largest camera retailers in the country was subsequently appointed as the OM Digital distributor for Malaysia. I think we can expect activities of this nature happening in other national markets. OM Digital will need to adjust its distribution strategy as needed, and do so on a more cost effective basis than was previously done by Olympus Imaging.

I am aware that the Canadian field staff has been affected and some headcount in the US office has also been eliminated. Depending on where you are located in the world, your local market may also experience a shift to a distributor relationship, or some reduction in local headcount.

These changes in human resource allocations can take some time, as does shifting to more distributors. In my mind these actions are far more important than product development at the present time. OM Digital will need to stabilize the financial position of the camera division by significantly reducing fixed costs. A company has to finalize its human resource requirements and its distribution strategy before it worries about future products.

Many of the Olympus cameras were recently refreshed with firmware updates in 2020, and some new camera models were launched. So, it is likely that we’ll see some additional lenses added to the product portfolio in the near term rather than camera bodies, once product development begins in earnest.

Conduct thorough market research in all major volume markets.

Each of us can wax endlessly about what OM Digital Solutions should do with its product portfolio. Decisions about product development and engineering are not done in a vacuum.

Both qualitative and quantitative market research needs to be done in all major market areas. This will help OM Digital to not only decide on how to move forward with its product portfolio, but also determine the best overall strategy to use with its marketing.

Without the insights that come from comprehensive market research, the company would not have a clear understanding of its current position with various buyer segments. It also would not empirically know what product features and attributes are valued, or should be developed, to meet the needs of target customers.

Determine market segmentation strategy.

Once field research has been completed and analysed, OM Digital can then determine how it intends to segment the market. Various camera formats have their advantages and challenges. The key for success will be how OM Digital decides to position OM-D and M.Zuiko products going forward.

If I was a betting man, I’d put my money on some kind of segmentation based on both photographic genre and psychographic considerations. With the camera market continuing to erode in terms of volume, the future of OM Digital cameras and lenses will depend on maintaining its current customer base and switching over owners of other brands.

I wrote an earlier article about the potential for Olympus to use a niche market differentiation strategy. I still firmly believe that this is the best approach to move forward. It does not appear that any other camera makers are using psychographic segmentation in their marketing. This would give OM Digital Solutions an early adopter advantage if it pursued this approach. I can attest from personal experience that customized psychographic segmentation can be an incredibly powerful strategic marketing approach.

Develop a strategy on how to maximize the imagining performance of existing M4/3 sensors

Smartphones did not kill large segments of the camera market by incorporating larger sensors. Technologies like computational photography were effectively used to maximize imaging from quite small sensors.

OM-D cameras do not need new sensors. They need additional breakthrough technologies with firmware to maximize the performance of existing sensors. The Olympus Imaging division was moving along this road with functions like Pro Capture, Live ND, Starry Skies AF, Live Composite, Handheld Hi Res, in-camera focus stacking, in-camera perspective control, and Intelligent Subject Tracking AF. OM Digital needs to accelerate the development of additional imaging technologies.

The development of new M4/3 sensors takes time and money. It is not logical to me that a sensor manufacturer would invest the time and money necessary to develop brand new M4/3 sensors for a smaller volume market in a declining industry. From a practical standpoint, OM Digital may not have the option to use updated M4/3 sensors if none are developed as it may not be economically viable to do so.

As I see it, the challenge for OM Digital is to use firmware to create a differentiated market position that will appeal to niche market customers who are skewed to the advantages of smaller sensor M4/3 cameras.

Leveraging computational photography technology can also help OM Digital Solutions increase its sales of M.Zuiko lenses. Firmware advancements could be programmed to only work with those lenses.

Build an appropriate operational base, then take flight.

The five steps outlined above would help create an appropriate operational base for OM Digital Solutions. Once completed, the company can then develop a product road map. Start to build new and stronger brand images for OM-D and M.Zuiko products. And, focus on effective, targeted marketing to niche markets skewed to the M4/3 format. It is my belief that the Olympus brand name will disappear from OM Digital cameras and lenses before 2023.

You’ve probably noticed that I purposely chose bird images to include in this article. I believe this segment will be one of the key  photography genres on which OM Digital Solutions will focus.

Technical Note

Photographs were captured hand-held using camera gear and technology as noted in the EXIF data. Images were produced from RAW files using my standard process.

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