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KENWOOD will further enhance its business competitiveness and promote strategies for growth, by strengthening the functions of its production engineering in the consumer business, bolstering its communication equipment development system and realigning its domestic sales structure. On October 1, 2004, KENWOOD Corporation (President&CEO: Haruo Kawahara; Head office: Hachioji, Tokyo) reorganized its operations and reassigned some personnel to facilitate the implementation of the current fiscal year's basic policy, "enhancement of competitiveness and promotion of a growth strategy towards a new leap forward." 1. Objectives of organizational changes and personnel transfers on October 1, 2004 Through the organizational changes on April 1, 2004, KENWOOD shifted to the "4 Profit Center System," which comprises the following divisions: Car Electronics Consumer, Car Electronics OEM, Communications Equipment and Home Electronics. Further, the Company newly established the Speaker System Division and the Consumer Business Development Center. Under this new corporate structure, the Company is implementing its policy: "enhancement of competitiveness and promotion of a growth strategy towards a new leap forward." In June 2004, to facilitate the further promotion of its growth strategies, the Company structurally reorganized aiming at product quality improvement. Then other organizational changes were made in July in order to strengthen technology-strategy functions and IT-strategy functions. This time, the Company implemented organizational restructuring, personnel transfers, and changes in the assignment of the executive officers, mainly to reinforce the functions of production engineering, realign the domestic sales structure and improve the acoustic-quality technology for speaker systems in the consumer electronics field, as well as to enhance the communication equipment development framework in the Communications Equipment Division. Under the new organization, the Company will step up its efforts towards a new leap forward. 2. Major organizational changes   Divisions(1) Car Electronics Consumer Division : Establishment of Consumer Business Production Engineering Department The Company established the Consumer Business Production Engineering Department under the Product Design Operation. Placed in KENWOOD Yamagata Corporation (a wholly owned manufacturing subsidiary of the Company), the department helps to smoothly establish the framework that enables volume-production of consumer electronics and improve product quality, by integrating the production engineering functions of the Car Electronics Consumer Division and the Home Electronics Division. (2) Home Electronics Division : Reorganization of Domestic Sales & Marketing Department To build a domestic sales system capable of promptly adapting to new product strategies for establishing the "Mobile & Home Multimedia System" business, KENWOOD reorganized the "Domestic Sales & Marketing Department," which consisted of offices and sales promotion groups in 10 locations throughout Japan, into five groups: Eastern Japan Sales Group, Western Japan Sales Group, National Mass-retailer Sales Group, Sales Promotion Group and Domestic Sales Planning Group (newly established). Through this reorganization, the Company strengthened the domestic sales-planning function and stepped up sales promotion of overall home electronics to major corporations and sales activities for home multimedia systems, and transferred the sales operations of pure audio and portable audio equipment to KENWOOD Kenex Corporation (a wholly owned sales subsidiary). Accordingly, the Company dissolved the home multimedia (HMM) project, which was launched in October 2003. (3) Speaker System Division : Transfer of Sound Quality Research Office The Company dissolved the "Sound Quality Research Office" and transferred its functions to the Sound Quality Research Offices of the Car Electronics OEM Division and the Home Electronics Division, to improve the sound quality of audio systems. (4) Communications Equipment Division : Establishment of Platform Development Project The Company established the "Platform Development Project," where common platforms for communication equipment are developed under the leadership of the Chief Engineer. Transfer of Technical Department 4The Company dissolved the "Technical Department 4," the wireless operations which we acquired from Toyo Communication Equipment Co., Ltd. on June 1, 2004, and transferred the functions to Technical Departments 1, 2 and 3. This transfer enabled the Company to integrate resources acquired from Toyo Communication and existing ones of the Communications Equipment Division, as well as reinforce the development structure of the Communications Equipment Division. 3. Change in executive officer duties
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