Zenken Corporation

The continuous securing and development of personnel supporting the growth of the Group is a top priority issue. If recruitment plans are not achieved or if an unexpectedly higher number of personnel, including executive personnel, leave the company, this could have a significant impact on business performance. As countermeasures, the Human Resources Department is building and promoting a talent strategy, formulating recruitment plans based on market trends, and enhancing training and education opportunities.

The core Marketing Segment accounts for approximately 70% of total net sales, and management resources are concentrated in this business. If this business contracts due to changes in the business environment and an appropriate response is not taken, this could have a significant impact on business performance. As a countermeasure, the Group is promoting diversification of revenue sources through the expansion of business domains, including via the Overseas Human Resources business.

In the internet advertising market, dramatic technological changes are underway, including the rise of generative AI represented by OpenAI's "ChatGPT," and unexpected technological advances or the emergence of new platforms may make it difficult to maintain the competitive advantage of services. As countermeasures, the Company has established a dedicated generative AI unit, is collecting and analyzing information on technology trends, and is accumulating in-house know-how through the utilization of generative AI.

In the internet advertising market, competition is expected to intensify due to an increase in new entrants, improvements in services by competitors, and the emergence of higher value-added business models. This could reduce the Group's competitiveness and affect business performance. As a countermeasure, the Group is closely monitoring industry trends and working to differentiate itself from competitors by maintaining and improving its service provision system.

The core WEB marketing business provides marketing support utilizing search engines, requiring prompt responses to frequent changes in ranking determination criteria (algorithms) implemented by "Google" and others. If such responses are not appropriately implemented, this could affect business performance. As countermeasures, the Company is eliminating dependence on specific engineers, standardizing operations through manuals, and dispersing the impact of changes by operating a large number of media properties.

The Group is subject to regulations such as the Act against Unjustifiable Premiums and Misleading Representations, the Act on the Protection of Personal Information, and the Copyright Act, and its business operations could be restricted by violations, the enactment of new laws, or changes in the interpretation of existing laws. As countermeasures, the Group thoroughly complies with laws, industry self-regulation, and various guidelines, and each business division and the administrative headquarters collect information on regulatory changes and abolitions.

The Group holds personal information obtained through its business activities, and in the event of an information leak or a problem occurring during the collection process, damages such as claims for compensation, loss of social credibility, and suspension of transactions by customers could occur, affecting business performance. As countermeasures, the Group formulates internal regulations based on the requirements of JIS Q 15001, appropriately manages personal information, and develops and provides education on internal systems.

The Group operates businesses utilizing information systems, and if a system trouble occurs due to unforeseeable causes such as a power outage, communication failure, or service interruption caused by a telecommunications carrier, this could affect business performance. As countermeasures, the Information Systems Department monitors operational status and performs regular backups, and the Group thoroughly manages information and provides education based on information management regulations.

The Group operates businesses both domestically and internationally, and if business activities are stalled or halted due to damage from natural disasters such as earthquakes and typhoons, fires, widespread infectious diseases, terrorism, or sudden changes in political and economic conditions, this could affect business performance. As countermeasures, the Group is formulating and continuously improving its BCP (Business Continuity Plan) and transferring risk through insurance.

Rapid business expansion may result in a situation where internal control systems fail to keep pace, making appropriate business operations difficult and potentially affecting business performance. As a countermeasure, the Group is promoting the establishment of internal control systems commensurate with the scale of its business and strengthening corporate governance.