■Netyear Group <3622>'s future outlook
2. growth strategy
As a growth strategy since before, the company has promoted 5 points: 1) strengthening competitive advantage by expanding target areas for improved customer contact points, 2) expansion of priority customers by providing multifaceted services, 3) stable customer creation by strengthening collaboration with NTT DATA, 4) expansion of services provided, and 5) securing and developing human resources, and the main points and progress are as follows.
(1) Strengthening competitive advantage by expanding target areas for improved customer contact points
By expanding the target area for improving customer contact points and expanding the scope of value provision, we will respond to the diverse needs of customers and accelerate business growth. Specifically, not limited to the conventional web domain, we will expand the range where customer companies can be supported by expanding customer contact points to the digital domain in general (social media, internet advertisements, EC, etc.) and real (physical stores), and secure competitive advantage in a market where competition is intense.
(2) Expansion of priority customers by providing multifaceted services
We aim to deepen relationships by providing multifaceted services to client companies and improve profit efficiency by increasing the number of priority customers. By providing multiple services such as planning, design, development, and operation improvement in one stop for each customer contact point, we aim to deepen transactions with priority customers where stable transactions on the scale of hundreds of millions of yen can be expected over multiple years, such as Starbucks. Currently, there are only a few companies, but there are about 10 candidate companies, and the idea is to develop them into priority customers in the future.
(3) Stable customer creation by strengthening collaboration with NTT DATA
By sharing customer strategies with NTT DATA and group companies, and providing value that leverages the strengths of both companies, we aim to create priority customers that are difficult for the company to reach alone. As already mentioned, the collaboration system between the 4 companies for the fiscal year ending 2025/3 has been strengthened, and efforts are being made to acquire collaborative projects.
(4) Expansion of services provided
In order to achieve medium- to long-term sustainable growth, we will work not only to expand custom projects, but also to provide services structured to some extent. The company is currently focusing on expanding the four services of “design & agile,” “brand value up support,” “SaaS integration,” and “full stack SX.” Although there were partial results in the previous fiscal year, it was not possible to close the gap between the needs of client companies and the services proposed by the company, and it did not lead to a boost in overall earnings. In the fiscal year ending 2025/3, we aim to expand sales by improving service quality so that it becomes an attractive service for client companies.
Also, development of new services is underway. A headless CMS (content management system) was jointly developed with Hexabase Co., Ltd., which concluded a capital alliance agreement in 2023/9, and order acceptance results have already begun. A headless CMS is a CMS without a front end (head), and unlike previous CMSs, the front end and back end are completely separated, so flexible development and management is possible. Development with a high degree of freedom is possible for heavy and long enterprise CMS solutions, and it has become a recent CMS trend.
Also, in 2024/6, provision of a new service “Netyear CVR Max” to support CRO (conversion rate optimization) of websites began. It is a service that efficiently supports profit growth by improving the CVR (conversion rate) of customer owned media by utilizing the site improvement tool “DEJAM” by LeAnGo Co., Ltd. Breaking away from the approach that relies on consultants' experience and intuition in POS (performance optimization services) that have been promoted until now, we will support performance improvement through PDCA cycles such as planning improvement measures and execution/effect verification of measures through objective insight and qualitative analysis based on data by utilizing the company's UX viewpoint and “DEJAM.”
As a tool currently under development, there is “AI Deep Insights,” which utilizes AI technology to classify customer types and execute promotion measures through optimal channels (web, application, SNS, real, etc.), and the goal is to release it during the 2026/3 fiscal year. The company plans to use it as a doorknock tool to develop new customers. In addition, the public space CRM application “coconiko (coconico) *” was developed and offered. It is a system that connects public spaces such as parks, sports facilities, shopping districts, and tourist facilities with local residents who are visiting/users, and it is an application that supports regional revitalization by providing a system such as map functions, coupon issuance functions, and digital stamp rally policies. By collecting and analyzing visit/user data such as personal attribute information, action history, location information, etc., which has not been conventionally grasped by the operator side, it is also possible for service operators such as event organizers, tourist sites, shopping districts, etc. to implement effective marketing measures. The idea is to raise awareness in the future while exhibiting at exhibitions, etc.
* An application jointly developed with Nandary Candary Co., Ltd. (Nandary Candary), which supports fan marketing in the fields of companies, local governments, sports teams, park facilities, and entertainment. Nandary Candary will be the general agent and will sell it.
(5) Securing and developing human resources
Regarding securing human resources associated with business growth, we will endeavor to recruit diverse human resources with excellent expertise, and promote the development of working environments, such as employment forms compatible with diversification of work styles and flexible work styles centered on remote work. Also, with regard to human resource development, in addition to establishing a system to support the acquisition of various qualifications, education programs and human resource management that elicit intrinsic motivation are being expanded, and the turnover rate is at a level of 10% or less, which is below the industry average. A medium- to long-term human resource development plan with the intention of sustainable growth is also planned for the 2025/3 fiscal year.
Also, as a specific effort to secure human resources, in addition to referral recruitment and regional recruitment for mid-career recruitment, a “young IT/digital human resource development project” has been promoted in collaboration with LULL since 2022/3. It is an initiative to train human resources with no experience in the IT industry as engineers and make them employees. In the same scheme, LULL's IT human resource development curriculum has been adopted, and web instructors and career advisors support both aspects of skills and careers. At the same time, the company provides a curriculum related to UX designed with abundant knowledge. There are dozens of members participating in the company's development projects through LULL, and human resources to become employees have also emerged from among them, and the idea is to continue such efforts in the future. Also, with regard to scarce human resources, a human distribution network has also been built, such as assigning freelance human resources with necessary skills to each project through partner companies to respond.
If the increase in personnel progresses, it is expected that the outsourcing ratio, which accounts for around 40% of the cost of sales, will decrease, leading to an increase in profitability. Mid-career recruitment was suppressed in the 2025/3 fiscal year, but after the 2026/3 fiscal year, it is a policy to actively invest in human resources in order to build a management infrastructure to achieve sustainable growth.
(6) Medium-term growth image
The company positions the 2025/3 fiscal year as a recovery period for future business growth, and is focusing on improving cost efficiency and creating priority customers. From the 2026/3 fiscal year onwards, we will work on sustainable growth by expanding priority customers, and it is a strategy to put profits on a growth trajectory through large-scale growth that combines UX design capabilities and technology, which the company has strengths in.
(Author: FISCO Visiting Analyst Joe Sato)