Management Direction

Basic Business Philosophy

The Internet is fast becoming a new social infrastructure, opening up an era in which society, corporations and individual lifestyles are all being transformed. Amidst this dynamic environment, the Fujitsu Group is redoubling its customer focus - working to rapidly develop and introduce solutions that continually take into account the customer's viewpoint and needs. For customers who are looking to leverage the Internet to revolutionize their business, we provide world-class technology in the areas of computers, telecommunications and electronic devices. Moreover, we offer our customers comprehensive solutions - from information systems development to operations and maintenance services - that enable us to serve as a true partner to help them develop new business opportunities.

Challenges and Business Strategy

In June 1999, we adopted "Everything on the Internet" as the guiding business strategy for the entire Fujitsu Group. Setting for ourselves the goal of becoming "a leading company of the Internet era," we declared our intention to capture leadership positions in three key areas:

• No. 1 in Internet solutions
• Japan's No. 1 Internet service provider
• No. 1 Internet user

This year, we are carrying our "Everything on the Internet" strategy still further by emphasizing two specific areas:

Broadband Internet
We will use our technological edge as an industry leader to contribute to the construction of a next-generation Internet that users can easily access at high speed - anytime and anywhere.

Building new customer relationships
We are dedicated to building partnership relations with our customers by providing them with Internet-based solutions that enhance their core business operations, thereby enabling them to add significant value to their business, as well as by directly cooperating with them in the creation of new businesses. In this regard, we are making the fullest possible use of the @nifty, Japan's largest Internet service provider, which is operated by Fujitsu group company NIFTY Corporation. Already the largest solutions provider in Japan, we are working to expand on a global scale the firm base we have built in the U.S. and Europe with the help of DMR, ICL and other group companies, so as to be able to more fully support our customers' business needs on a worldwide basis.

Beginning in June of this year, we launched a global brand campaign in Japan, the U.S., Europe and Asia under the corporate message "The Possibilities Are Infinite." Positioning "Fujitsu" as the common brand for the entire Fujitsu Group, the campaign is intended to help promote our future growth as a cutting-edge Internet company and enhance the brand value of the Fujitsu Group as it expands around the world.

Although the business environment in which the Fujitsu Group operates will no doubt experience even more dramatic changes in the future, we will strive to promote greater growth and profitability by continuing to restructure our business according to the principles of selection and concentration around the Internet. In addition, we will seek to promote more efficient management and will put special effort into strengthening our financial position. Moreover, we have made protection of the environment a major corporate priority and will continue to actively strive to lighten the ecological burden of all of our business activities.

By persevering in these efforts, we will strive to be a company that continually anticipates the changes of the 21st century and is constantly renewing itself, and in so doing is able to earn the trust of customers around the world,

Reform of Management System

In June of last year, we carried out a reorganization in which operational authority was shifted to business units (BU) reporting directly to the president. At the same time, we established a Management Strategy Council responsible for planning group management strategies. Moreover, with the goal of creating an organization better able to respond to the challenges of a fast-changing business environment and clarifying operational responsibility, this past April we carried out a further reorganization of our directors' assignments. Implementation of this new system began with the start of the current fiscal year. Moreover, to further strengthen our audit system, in June this year we provided for an additional outside auditor, making a total of three.

Already from the 1998 fiscal year, we introduced a personnel system linking compensation with the company's performance. From this fiscal year, we introduced a stock option system for entire Board of Directors and a portion of top management. Our goal was to enhance the motivation and spirit of top-echelon management for improving corporate performance and to increase profits for our shareholders by expanding corporate value.

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