SECOM’s Core Competitive Advantages
We continue to leverage three core competitive advantages to deepen our ties with customers
and ensure sustainable growth.

A high market share and a robust brand associated with safety and peace of mind

A pioneer in Japan’s security services
industry, we have continuously updated

Emerging as a pioneering providerof security services

and evolved our services in line with social

customers’ needs for safety and peace ofmind and swiftly provide solutions, thereby
enhancing our reputation for reliability. Atchange over more than five-and-a-half

In 1966, we developed the first on-line

present, contracts for our on-line commercial

decades since our founding, achieving

security system in Japan, SP Alarm. At theand home security systems number more

steady growth as the industry leader andtime, contracts for security patrol and static

than 2.29 million, and we continue to enjoy anurturing the SECOM name as a trusted

guard services rose steadily, but having rec-significant share of the Japanese market. Ourbrand.

ognized the superiority of SP Alarm andaccumulated experience and know-how inviewing on-line systems as the future of

the provision of safety and peace of mind

security services we eliminated our security

to a diverse range of customers and thepatrol services and shifted our focus to SP

reputation we enjoy for reliability have con-Alarm. Although this dramatic transforma-

tributed to the rise of SECOM as a powerful,

SECOM was established in 1962 as Japan’stion was not without its difficulties, ourvaluable brand.

first security company. At first, our services

employees were united in their determina-

consisted of random patrols of subscribers’

tion to broaden the popularity of on-line

unattended premises at night and static

security systems and succeeded in achieving

guard services, whereby security guards are

steady growth in contract volume.

An early opportunity for dramatic
progress: The 1964 Olympics

Securing human resources capable ofbuilding brand value

Since our establishment, we have also

We remain committed to achieving asought to ensure that all employees sharesociety free from concerns by providing

SECOM’s Philosophy, the unfaltering

widely accepted high-grade services that

The goal of the security services businessfoundation of everything we do, and todeliver safety and peace of mind. By refusing

is to provide safety and peace of mind. A

encourage them to personify the philosophy,

to be content with the status quo, we willcompany’s ability to offer high-grade services

recognizing employees as a vital source ofcontinue to be critical to earning the trust ofdepends on having employees who areour competitiveness. In recent years, wecustomers and increasing the value of thehighly adaptable to change, able to create

have promoted efforts in line with the Tri-ion

SECOM brand.

value and committed to contributing toInitiative*, which seeks to confirm thatsociety. Our reputation as the leader of Japan’s

SECOM’s Philosophy fully penetrates every

security services industry and our outstanding

aspect of our operations and that employees

growth potential position us well to secure

are able to act independently in a mannerand foster the talented human resources who

consistent with this Philosophy.

will be responsible for providing our various
services in the years ahead, allowing us to* For further information on the Tri-ion Initiative,
please refer to page 27.

maintain an edge over the competition.

A recurring revenue–based business model that underpins sustainable growthposted at subscribers’ premises. In 1964, we

In subsequent years, we succeeded insecured the contract to guard the athletes’

making on-line security systems available tovillage at the Olympic Games in Tokyo.

a broad range of customers by extending

Thanks to our success in fulfilling this con-high-grade services at appropriate prices

A distinguishing feature of our operating

revenue–based businesses. As an example,customers are content to leave contracts intract, recognition of the SECOM namethrough a national network. By maintaining

income is the fact that it is generated largely

the initial contract period for on-line security

place over the long term, all employees, from

improved greatly and our contract volume

a close proximity to the community, weby long-term contracted services such assystems is five years, after which the contract

emergency response personnel to sales,rose substantially.

ensured our ability to promptly grasp

on-line security systems and other recurring

is automatically renewed annually. To ensuretechnology and administrative department

New contract is secured

Variable and Fixed Costs for On-Line Security Systems
Variable costs
Subscriber

Security equipment isprovided on a rental basis(SECOM assets)

Increased customer satisfaction ensures thatthe contract continues over the long term
Diversification of services bolsters
per-customer income

Fixed costs

3SECOM
Emergency
Depot(Approximately
2,800 across Japan)
Securing the contract to guard the athletes’ village at the 1964 Tokyo
Olympics gave SECOM a significant boost14

SECOM Annual Report 2019using
1 Alerttelecommunications

Dispatch SECOM emergency
response personnel

Continuous income expansion

circuits

Reinvestment in growth
SECOM
2 Alertemergency
response personnel

SECOM
Control Center(47 across Japan)

Increased competitiveness andsustainable growth

The well-known red SECOM sticker: Providing security and peace of mind
across JapanSECOM Annual Report 201915

SECOM’s Core Competitive Advantages

staff, work to increase customer satisfaction

Expanding use of our recurring
revenue–based business model

Building a stable cycle of investment
and growth

faction staff, who visit customers in person toWe have applied our recurring revenue–

Going forward, we will continue striving tofurnish useful information and gain feedback,based business model in various SECOM

bolster our earnings by expanding applica-

which we use to incorporate into ourGroup business areas. In addition to on-linetion of this recurring revenue–based busi-

unceasing efforts to improve systems andsecurity systems, our security services seg-ness model and remaining in close proximity

services and grasp latent needs.

ment includes two recurring revenue–based

to customers. We will also continue to rein-businesses, namely, static guard services andvest in growth using cash generated byarmored car services. In the fire protection

these businesses to further enhance oursegment, we view post-installation regularcompetitive edge and ensure sustainable

maintenance and inspection services andgrowth.

by providing services that exceed theirGroup strengths backed by a strong financial baseexpectations. We also have customer satis-Ongoing investment toreinforce competitivenessOur ability to ensure the stable, reliable pro-replacement, which is carried out after a setvision of on-line security systems is under-

period of time, to essentially be recurring

pinned by a robust infrastructure centered

revenue–based businesses. Our medical ser-on control centers, which monitor the status

vices segment includes home medical ser-of subscribers’ premises, the IT systems thatvices, as well as services that leverage ICT,

support these facilities and emergency

notably an electronic medical report system

depots, which provide emergency response

and remote image diagnosis support ser-services. Having established a configuration

vices. Most of the businesses in our insurance

that enables us to provide on-line systems

services segment, including fire insurance

across Japan, we promote ongoing invest-and cancer treatment insurance, are recur-ments aimed at improving quality and func-ring revenue–based businesses. In the geo-tionality, thereby further reinforcing our

spatial information services segment, whichcompetitiveness.

has traditionally focused on outsourced
work, we are promoting the expansion ofcontinuous contract services. The BPO andICT service segment primarily consists ofrecurring revenue–based businesses, including data centers, large-scale disaster
response services, cloud-based services andBPO services.

16SECOM Annual Report 2019

At present, the SECOM business portfolio

Investments to realize our visionencompasses seven segments: security

reinforcing our ICT business. In 2015, leading
cash collection and delivery services providerservices, fire protection services, medical

Efforts to create the ANSHIN Platform center

Asahi Security became a consolidated sub-services, insurance services, geospatial infor-on two key strategies. The “ALL SECOM” strat-sidiary, allowing us to propose solutions

mation services, BPO and ICT services, andegy focuses on rallying Group strengths,

combining security services with cash collec-

real estate and other services. In all of thesewhile the “Collaboration” strategy emphasizes

tion and delivery services, while in 2017 weareas, we endeavor to help resolve our cus-working with various partners who share ouracquired TMJ, a provider of contact center

tomers’ concerns by rallying SECOM Groupphilosophy. We also see M&As as a viableand other BPO services, enhancing ourstrengths to provide a diverse range of tai-

approach to creating the ANSHIN Platform,

responsiveness to the rising need to be ablelored services and products that deliver

and, as stated in the SECOM Group Road

to rely on others, a consequence to Japan’s

safety and peace of mind and make life more

Map for 2022, we will seek to invest in key

declining labor force.

comfortable and convenient. Looking ahead,

growth businesses, namely, physical security,

we will also continue working to drive inno-

cyber security, BPO and ICT services andvation by combining these various services

healthcare, as well as in start-ups withand products into tailored packages.

advanced technological capabilities. We have

Deepening ties with customers
and ensuring sustainable growthallocated ¥200 billion for M&As over five

By enhancing SECOM Group strengths, weyears (April 2018–March 2023). Active invest-

are expanding opportunities for customers

ments in growth, including in M&As, areto use SECOM services. While continuing toWith the aim of realizing our vision forpossible thanks to our stable financial base,value our relationship with each and every

the future—the Social System Industry—

which reflects stable cash flows from

customer, we will continue working to offer

we formulated the SECOM Group’s Vision forrecurring revenue-based businesses.

services optimized to suit their needs,

The ANSHIN Platform

2030, as part of which we are working tocreate the ANSHIN Platform, a service infra-

thereby helping to resolve concerns andM&As to reinforce Group strengths

structure through which we are striving tofurther reinforcing our bond with society.
Guided by our mission of helping to achievedeliver peace of mind to people in their

We have a long history of investing in M&As

a society free from concerns, we will press

everyday lives and to society as a whole.

with the aim of further reinforcing theahead with efforts to ensure sustainable

We provide comprehensive services

strengths of the SECOM Group. In 2006, wegrowth in a rapidly evolving society bydesigned to address risks including crimes,

acquired Nohmi Bosai, Japan’s largest pro-swiftly identifying needs and offering a broad

accidents, cybercrime, natural disasters,

vider of fire protection services, while in 2012

range of services.

illnesses and aging by helping prepare in

Japan’s third-largest fire protection services

advance, ensure an accurate grasp of condi-

provider, Nittan, joined the Group, enablingtions, minimize impact and achieve restora-

us to extend joint security services and firetion. These four steps comprise the SECOM

protection services proposals. The same year,

ANSHIN Flow, through which we endeavor to

we also acquired At Tokyo, one of Japan’s top

ensure the seamless provision of services

data center services firms, positioning us tothat deliver peace of mind.

begin offering services using Big Data andSECOM Annual Report 201917