Gunze President Kazuo Kodama has set three key concepts for his 2014 management policy: "Challenge, Rebirth, and Unity." Looking back at fiscal 2013, the company saw increased sales and profits in the first half of the year, maintaining that pace in the second half. He attributes this growth to the performance of the Functional Solutions Division. Gunze's core apparel business continued to struggle due to the weak yen and rising labor costs in China. Going forward, Gunze will implement three strategies to revitalize its apparel business: further improving productivity, strengthening local sales of products produced in Chinese factories, and reducing labor costs by introducing domestic automation to overseas factories. The three key concepts for this year are "challenge," which refers to uncovering needs and strengthening core competencies, and creating new markets and channels through cross-functional approaches (CFA). "Rebirth" will concentrate management resources on core SBUs (strategic business units) and aim to transform the business structure. "Unity" will strive to improve employee satisfaction, increase loyalty to the company's brand, and foster an organizational culture that embraces diversity. Fiscal 2014 will also mark the start of a seven-year medium-term management plan. This plan envisions the Functional Solutions business as a growth engine and develops the Health & Medical business as a fourth pillar. While not much growth is expected in the apparel business, efforts will be made to re-strengthen the brand. Before strengthening local sales overseas, the company will focus on re-establishing its domestic brand recognition. President Kodama stated, "Gunze underwear once enjoyed high recognition, but unfortunately, this has declined in recent years. A brand without domestic recognition cannot be successful in overseas sales. We must first solidify our domestic presence."