business strategy - canon inc
TRANSCRIPT
Canon Inc.
TABLE OF CONTENT ______________________________________________________________________
EXECUTIVE SUMMARY________________________________________________4
BACKGROUND OF COMPANY__________________________________________5
DIGITAL CAMERA BUSINESS IN CANON INC______________________________6
Figure 1.1 Canon Sales by Product_______________________________________9
Figure 1.2 Digital Camera Market share___________________________________9
TASK 1_____________________________________________________________10
1.0 ELEMENT OF BUSINESS STRATEGY VARRIED IN DIFFERENT SECTOR___10
1.1 Small business___________________________________________________10
1.1.1 Various Industries in Small Business_______________________________10
1.1.2 Franchise Small Businesses______________________________________11
1.1.3 Advantages of Small Business____________________________________11
1.1.4 Problems faced by small businesses_______________________________12
1.2 Multinational Corporation__________________________________________12
1.2.1 Multinational corporate structure__________________________________12
1.2.3 International power______________________________________________13
1.3 Manufacturing and Services Organization_____________________________13
1.4 Public Sector_____________________________________________________14
TASK 2_____________________________________________________________15
2.0 THE IMPORTANT OF STAKEHOLDERS ANALYSIS_____________________15
Canon Corporate goals on Stakeholders:________________________________15
2.1 Relations with Customers__________________________________________17
2.1.1Canon National Account Program__________________________________17
2.2 Relations with Shareholders and Investors____________________________18
2.3 Dialogue with Individual Investors___________________________________19
2.4 Stakeholders Mapping_____________________________________________20
2.4.1 The power/interest matrix_________________________________________20
2.4.1.1 Sector A (Minimal Effort)________________________________________21
2.4.1.2 Sector B (Keep Informed)________________________________________21
Kids Area at Expos (Communities)______________________________________22
Canon Eco Kids_____________________________________________________22
Environmental Lessons at Elementary and Middle Schools_________________22
The National Center for Missing & Exploited Children (NGO)________________23
2.4.1.3 Sector C (Keep Satisfied)________________________________________23
Promoting Employee Awareness_______________________________________24
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Compliance Week Poster______________________________________________24
Information via the Intranet____________________________________________25
Building Strong Ties with Suppliers_____________________________________25
The EQCD Concept __________________________________________________26
2.4.1.4 Sector D (Key player)___________________________________________26
2.5 The Important of Stakeholder Analysis_______________________________27
Canon Environmental Goals___________________________________________28
TASK 3_____________________________________________________________30
3.0 ENVIRONMENTAL AUDIT (Porter’s Five Forces)_______________________30
3.1 Threat of New Entry_______________________________________________31
3.1.1 Economic of Scale_______________________________________________31
3.1.2 The likelihood of retaliation from existing industry player______________32
Digital SLR Cameras__________________________________________________33
3.2 Threat of Rivalry__________________________________________________34
3.2.1 The structure of competition______________________________________34
3.2.2 Degree of differentiation__________________________________________35
3.3 Threat of Substitutes______________________________________________35
3.3.1 Buyers willingness to substitute___________________________________36
3.3.2 The relative price and performance of substitute_____________________36
3.4 Threat of supplier’s bargaining power________________________________37
3.4.1 There are undifferentiated, highly value product______________________38
3.4.2 There are many buyers & few dominant suppliers_____________________39
3.5 Threat of Buyer’s bargaining power__________________________________39
3.5.1 There are few dominant buyers and many sellers in the industry________40
3.5.2 Product are standardized_________________________________________41
3.6 Ability to expand into next-generation technologies in the future_________42
Example of OLED Display (Prototype)___________________________________43
3.7 Japanese digital camera growth to slow in 2007 (Threat)________________44
3.8 Sony enters digital SLR camera market (Threat)________________________45
3.9 Organizational Audit (Value Chain Analysis)___________________________46
3.9.1 Primary Activities________________________________________________46
CANON VALUE CHAIN ANALYSIS______________________________________46
TECHNOLOGY RESERCH AND DEVELOPMENT___________________________46
DESIGN INOVATION__________________________________________________49
MANUFACTURING___________________________________________________50
MARKETING________________________________________________________50
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SERVICE___________________________________________________________51
3.10 Support Activities________________________________________________52
Economic Activities through Maximizing Resource Efficiency_______________52
Pattern Strategies____________________________________________________53
TASK 4_____________________________________________________________54
4.1 PEST Analysis (http://www.skylinecollege.com)________________________54
4.2 Strategic Capability > Core Competency______________________________56
4.2.1 It provides customer benefits______________________________________56
4.2.2 It is hard for competitors to imitate_________________________________57
4.2.3 Provide potential access to avoid variety of markets__________________57
4.3 Expectation of Stakeholders > Culture influence from within and outside Canon______________________________________________________________58
4.3.1 Product Safety__________________________________________________59
4.3.2 Security________________________________________________________59
Preventing Air and Water Pollution______________________________________60
TASK 5_____________________________________________________________62
5.1 Historical Analysis.________________________________________________62
5.2 Industry Norm Analysis____________________________________________67
5.2.1 The industry dominant economic characteristics_____________________67
Technological Innovation______________________________________________68
Entry or Exit of major firm_____________________________________________69
5.2.2 Changing of the industry and what causing the industry to change______69
5.2.3 The attractive of the industry______________________________________70
5.3 Benchmarking____________________________________________________72
5.3.1 Strategic Benchmarking__________________________________________73
Phase III (2006-2010) Becoming a Top 100 Global Company_________________73
Establishing New Production Systems to Sustain International Competitiveness___________________________________________________________________75
Identifying New Business Domains and Accumulating Required Technologies_76
5.3.2 Competitive Benchmarking_______________________________________76
Third-Party Opinion from Volker Türk, Wuppertal Institute__________________77
TASK 6_____________________________________________________________78
6.1 Strategic Master Planning__________________________________________78
Canon SD630 campaign and Tennis Star Maria Sharapova__________________78
Canon PowerShot SD630 Campaign - Capital Allocation____________________78
Canon SD 630 digital camera campaign – Employed David Letterman________79
Bargaining__________________________________________________________79
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REFERENCES_______________________________________________________80
EXECUTIVE SUMMARY
In the early thirties, the two most popular brands of miniature cameras were
Leica and Contax, both made in Germany, the camera kingdom of the world.
These two brands attracted the camera fans, receiving enthusiastic support
throughout the world as super grade cameras. There was a Japanese man who
disassembled a Leica camera in an attempt to develop a high-grade 35mm focal-
plane-shutter rangefinder camera (hereafter referred to as a 35mm rangefinder
camera).
This person was Goro Yoshida (1900-1993). In 1933, Yoshida, together with his
brother-in-law, Saburo Uchida (1899-1982) and Takeo Maeda (1909-1975), a
former subordinate of Uchida, established the Precision Optical Instruments
Laboratory in a room of an apartment located in Azabu Ward, Tokyo. Although it
was reported that they were able to produce several prototypes of a high-grade
35mm rangefinder camera, "Kwanon (equipped with the Kasyapa = Kashapa
lens)," no such camera is thought to exist today. "Kwanon" became a phantom
prototype camera. (http://www.canon.com/camera-museum/history)
Canon Inc success has resulted from a strategy of internally generated growth,
selection of the best locations for its freestanding stores, a focus on customer
service and convenience, high volume prescription sales, a focus on profit per
customer visit, and its selective implementation of technology.
www.dpreview.com indicates the firm has a wide economic moat, meaning that
Canon Inc has a more sustainable competitive advantage, based on its high-
volume stores, internal growth capacity.
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Canon Inc.
BACKGROUND OF COMPANY
Canon, a Tokyo based company, was established in 1933 by Yoshida Goro and
Uchida Saburo to research and develop good quality cameras. They managed to
create Japan’s first 35mm camera in 1934 and started to introduce other
products thereafter. They also made significant contributions to X-ray cameras,
electronic calculators, Video Tape Recorders, and copying machines into the
1970s. By the end of 1970s, Canon had positioned itself well in the business
machines market. Throughout the 1970s, Canon also started to expand into
international markets including the Americas and Europe. As the company grew,
a new structure was necessary and so in 1978 the company was reorganized
into product divisions. Canon’s growth in imaging technology helped it move into
the SLR (Single lens reflex) camera business in 1983. In 1988 it introduced its
first digital camera, Q-PIC, however it continued to focus more on its traditional
camera business. It was not until 2000, when Canon was listed on the New York
Stock Exchange (NYSE), that it entered the digital camera market with its
popular PowerShot product line. Canon now is undoubtedly a leader in the digital
camera market, as well as in the other product markets it competes in.
DIGITAL CAMERA BUSINESS IN CANON INC
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Canon manufactures and markets digital cameras and film cameras. Canon also
manufactures and markets digital video camcorders, lenses, and various camera
accessories. Digital cameras have become common tools to input images into
PCs. In addition to ensuring the best possible image quality throughout its
product lineup, Canon offers digital compact cameras that are easy to use and to
carry. In 2003, the compact digital camera market continued to show significant
growth. Canon introduced six new PowerShot series and three Digital ELPH
series cameras and has finally reached the top position in the industry, in unit
sales basis.
Canon's digital single-lens reflex cameras are designed to meet needs from
amateurs to professionals. These cameras incorporate innovative technologies
such as 45-point area auto-focus, eye-controlled auto-focus, depth-of-field
control, Base-stored Image Sensor (BASIS), Complementary Metal Oxide
Semiconductor (CMOS) imaging sensors, Digital Imaging Processor (DIGIC),
and a fully electronic mount system to transmit data between the lens and the
camera chassis. Particularly in the digital single-lens reflex camera segment,
popular new product offerings including the EOS 10D and EOS Digital Rebel
(EOS 300D Digital) bolstered Canon's dominant position worldwide. Canon's
digital single-lens reflex cameras feature the company's proprietary, CMOS
imaging sensors to offer advantages like low image noise, and low power
consumption. Both the sensor technology, and the cameras themselves, won
numerous awards in the respective industries. Canon also offers a
comprehensive line-up of conventional film cameras to satisfy the needs of users
everywhere, from models with high-performance zoom lenses to models with
large enhanced viewfinders and full water resistance.
Hindered by the surging popularity of digital cameras, the continued shrinking of
the conventional film camera market has been a recent trend. Canon's
introduction of new models in fiscal 2003, however, enabled it to retain its
position firmly atop this market worldwide and to record a healthy level of
profitability. With a cautious eye on market trends, Canon will continue to develop
new products and maintain a firm commitment to the film camera market.
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Canon Inc.
In the camera lens segment, technological developments, including diffractive
optical elements, image stabilizer and ultrasonic motor, have helped Canon to
maintain a technical lead over other makers. Canon offers over 50 lenses in the
EF series. These high-qualities, high-performance lenses provide outstanding
performance with digital cameras as well as silver-halide cameras, greatly
contributing to Canon's sales. Due to market expansion of digital single- lens
reflex cameras, sales of middle to high-class lenses have been increasing. The
introduction of new lenses offering optimum performance with Canon's digital
single-lens reflex cameras is planned for 2008.
KWANON (Prototype) 1934
35mm Focal-Plane Shutter Rangefinder Camera
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Canon Inc.
Figure 1.1 Canon Sales by Product
Figure 1.2 Digital Camera Market share
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TASK 1
1.0 ELEMENT OF BUSINESS STRATEGY VARRIED IN DIFFERENT SECTOR
From the Warren Federal Credit Union website, it explains strategy in a two
appeal. First is Traditional Appeal and the second is New Appeal.
Traditional Appeal – is the science and art of military command as
applied to the overall planning and conduct of large-scale combat operations.
New Appeal – a pattern in a stream of decisions or actions.
(http://uwacadweb.uwyo.edu)
Business can be categories into several parts that is small business,
Multinational Corporation, Manufacturing and Service Organization and Public
Sector
1.1 Small business
A small business may be defined as a business with a small number of
employees. The legal definition of "small" often varies by country and industry,
but is generally under 500 employees depending on the industry. These
businesses are normally privately owned corporations, partnerships, or sole
proprietorships.
1.1.1 Various Industries in Small Business
Wholesaling : maximum 100 employees
Retailing : maximum yearly sales ranging from $6 million to $24.5
million on industry
Mining : maximum of 500 employees
Agriculture : maximum annual receipt of $0.75 million up to $5 million
Small business are typically are managed by the people who started and
own them. Owner of small business would rather take the risk of starting
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Canon Inc.
and operating their own firm. The internet has become a small business
on ramp for teenaged entrepreneurs.
1.1.2 Franchise Small Businesses
Franchising is a way for small business owners to benefit from the
economies of scale of the big corporation (franchisor). KLG restaurants
are an example of a franchise. The small business owner can leverage a
strong brand name and purchasing power of the larger company while
keeping their own investment affordable. However, some franchisees
conclude that they suffer the "worst of both worlds" feeling they are too
restricted by corporate mandates and lack true independence. KLG has
even been sued by franchisee's who feel they have been exploited with
unreasonable costs for materials they are required to purchase from the
parent company.
1.1.3 Advantages of Small Business
A small business can be started at a very low cost and on a part-time
basis. Small business is also well suited to internet marketing because it
can be very manageable to serve a niche, something that would have
been more difficult prior to the explosion in internet activity.
Adapting to change is crucial in business and small business, lacking
bureaucratic inertia, can often respond to the marketplace quickly. Small
businesses operators tend to be intimate with their customers and clients
resulting in greater accountability and responsiveness.
1.1.4 Problems faced by small businesses
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Canon Inc.
Small businesses often face a variety of problems related to their size. A
frequent cause of bankruptcy is undercapitalization. This is often a result
of poor planning rather than economic conditions - it is common rule of
thumb that the entrepreneur should have access to a sum of money at
least equal to the projected revenue for the first year of business in
addition to his anticipated expenses. For example, if the prospective
owner thinks that he will generate $100,000 in revenues in the first year
with $150,000 in start-up expenses, then he should have no less than
$250,000 available. Failure to provide this level of funding for the company
could leave the owner liable for all of the company's debt should he end
up in bankruptcy court, under the theory of undercapitalization.
1.2 Multinational Corporation
A multinational corporation (MNC) is a corporation or enterprise that manages
production establishments or delivers services in at least two countries. Very
large multinationals have budgets that exceed those of many countries.
Multinational corporations can have a powerful influence in international relations
and local economies. Multinational corporations play an important role in
globalization.
1.2.1 Multinational corporate structure
Multinational corporations are often divided into three broad groups:
Horizontally integrated multinational corporations manage production
establishments located in different countries to produce the same or
similar products. (example: McDonalds)
Vertically integrated multinational corporations manage production
establishment in certain country/countries to produce products that serve
as input to its production establishments in other country/countries.
(example: Adidas)
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Canon Inc.
Diversified multinational corporations manage production establishments
located in different countries that are neither horizontally nor vertically
integrated. (example: Microsoft)
1.2.3 International power
Large multinational corporations can have a powerful influence in
international relations, given their large economic influence in politicians'
representative districts, as well as their extensive financial resources
available for public relations and political lobbying.
Multinationals have played an important role in globalization. Prospective
country locations for Canon Inc production establishments, and
sometimes regions within countries, must compete with each other to
have Canon locate their facilities (and subsequent tax revenue,
employment, and economic activity) within a region. To compete,
countries and regional political districts offer incentives to Canon such as
tax breaks, pledges of governmental assistance or improved
infrastructure, or lax environmental and labor standards. This process of
becoming more attractive to foreign investment can be characterized as a
race to the bottom, a push towards greater freedom for corporate bodies,
or both.
1.3 Manufacturing and Services Organization
Manufacturing, a branch of industry, is the application of tools and a processing
medium to the transformation of raw materials into finished goods for sale. This
effort includes all intermediate processes required for the production and
integration of a product's components. Some industries, such as semiconductor
and steel manufacturers use the term fabrication instead. The manufacturing
sector is closely connected with engineering and Industrial Design.
Examples of major manufacturers include General Motors Corporation, Ford
Motor Company, Chrysler, Boeing, Gates Rubber Company and Pfizer.
Examples in Europe include France's Airbus and Michelin Tire. Modern
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proponents of Fair Trade policy and a strong manufacturing base for the U.S.
economy include economists like Paul Craig Roberts, Ravi Batra, and Lou
Dobbs.
1.4 Public Sector
The public sector is the part of economic and administrative life that deals with
the delivery of goods and services by and for the government, whether national,
regional or local. Examples of public sector activity such as delivering social
security, administering, urban planning and organizing national defenses.
The organization of the public sector (public ownership) can take several forms,
including:
Direct administration funded through taxation; the delivering organization
generally has no specific requirement to meet commercial success criteria, and
production decisions are determined by government.
Publicly owned corporations (in some contexts, especially manufacturing, "State-
owned enterprises"); which differ from direct administration in that they have
greater commercial freedoms and are expected to operate according to
commercial criteria, and production decisions are not generally taken by
government (although goals may be set for them by government).
Partial outsourcing (of the scale many businesses do, e.g. for IT services), is
considered a public sector model.
TASK 2
2.0 THE IMPORTANT OF STAKEHOLDERS ANALYSIS
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A “stakeholder” can be defined as “Any individual, group, or institution that has a
vested interest in the natural resources of the project area and/or who potentially
will be affected by project activities and have something to gain or lose if
conditions change or stay the same”. (https://intranet.panda.org)
Stakeholder analysis recognizes all prime and secondary stakeholders who have
a vested interest in the issues with which the development or policy is concerned.
The objective of stakeholder analysis is to expand a tactical view of the human
and institutional scene, and the associations among the different stakeholders
and the issues they concern about most. Stakeholders are persons, groups or
institutions with interests in a policy, programmed or project. Primary
stakeholders are immediate communities of interest. Secondary stakeholders are
the intermediaries in the process, and may include government agencies and
other institutional bodies.
Canon Corporate goals on Stakeholders:
“Transcend border to actively fulfill our social responsibility to all humankind, in
every region of the world” (http://www.canon.com)
Canon formally introduced its corporate philosophy of kyosei in 1988.The
definition of this word is “Living and working together for the common good”, but
the definition is broader:
“All people, regardless of race, religion or culture, harmoniously living and
working together into the future.” (http://www.canon.com)
Based on the concept of kyosei, and in the pursuit of the “excellent global
corporation” ideal defined by this philosophy, Canon challenges to stand the
responsibility for the impact of its activities on the social order, not only in its
business but also in other human undertaking.
First and foremost, Canon must present customers with excellent products for
further customer satisfaction while persistent their profits to its various
stakeholders. Guided by its corporate philosophy of kyosei, Canon, focuses its
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Canon Inc.
efforts on various activities to comprehend a society where all people can
comfortably and peacefully live together while making significant contributions to
society through its business. Canon provides products and services with the aim
of contributing to society through its technological excellence, while at the same
time promoting social and cultural support activities in response to various needs
and issues of communities worldwide. They tackle a range of important social
problems, including protection of the global environment, growth and
development of international society, educating and cultivating young people,
social welfare, and development of the arts, culture and sports.
(http://www.canon.com)
True global companies must encourage good relations, not only with their
customers and the communities in which they operate, but also with nations and
the environment. They must also bear the responsibility for the impact of their
activities on society. For this reason, Canon’s goal is to contribute to global
prosperity and the well-being of humankind, which will lead to continuing growth
and bring the world closer to achieving kyosei.
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Canon Inc.
2.1 Relations with Customers
Canon products and services must exemplify “trust,” “satisfaction,” and
“evolution” with the purpose of genuinely pleases the customers who pay for
them. “Trust” is an essential part of quality, a guarantee that the product is
durable and harmless. “Satisfaction” is achieved by providing products or
services that are simple to use and comprehend, plus careful and considerate
support to customers. “Evolution” is also essential to keep the value of products
and services relevant in a constantly changing world, and meet the needs of
tomorrow
2.1.1Canon National Account Program
“AT CANON, WE BUILD PARTNERSHIPS WITH OUR CUSTOMERS BASED
UPON A SHARED VISION OF SUCCESS. IT IS ONLY BY HELPING THEM
ACHIEVE THEIR GOALS THAT WE ACHIEVE OURS.”(www.usa.canon.com)
Canon’s National Account Division to make available America’s largest corporate
customers with the most complete and effective customized imaging solutions for
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Canon Inc.
over two decades. Combining innovative technologies with superior account
management and customer service, the National Account Division provides
customers with technology solutions guaranteed to increase productivity. Canon
keen ability to understand their customers needs and allows Canon to
consistently exceed their expectations. Much of the success of Canon’s National
Account Program is attributable to their ability to forge strong partnerships with
their customers. Canon builds long-term relationships based on trust, mutual
respect and a shared vision of success. By working as a team, with open
communications and common goals, Canon is able to develop highly specialized
imaging solutions that meet their customers’ individual needs.
2.2 Relations with Shareholders and Investors
The Corporate Ethics and Compliance Committee is a body of executives and
representatives from each headquarters or product group operations under the
chairmanship of the President and CEO of Canon Inc. The Committee meets four
times a year to discuss and approve compliance and corporate ethics policy and
associated measures for the Canon Group. In light of the nature of the
Committee, a corporate auditor attends the meetings as an observer.
The primary objectives of the Corporate Ethics and Compliance Committee are:
To instill a consciousness of compliance and ethics universally throughout the
Group
To enhance the transparency and soundness of business activities while
fostering a corporate spirit which motivates employees to unfailingly consider
compliance and ethics when making business decisions.
In addition to the regular members, the Committee also invited the presidents of
overseas regional headquarters as well as all the presidents of domestic group
companies to attend meetings, where they confirmed their obligation to take the
lead in ensuring thorough compliance.
.
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The percentage of Canon Inc. shares owned by non-Japanese investors rose to
more than half of all outstanding shares as of December 31, 2004, and stood at
51.1% as of December 31, 2005 (www.canon.com/ir). Canon’s IR Promotion
Division therefore makes demanding efforts to maintain close communication
with non-Japanese institutional investors. In addition to holding conference calls
to explain financial results, and traveling abroad to discuss management policy
with institutional investors outside Japan, it has also created IR bases in Europe
and the United States. Furthermore, it maintains an English-language IR website
with effectively the same content as that published on its Japanese- language
website, thereby ensuring that investors inside and outside Japan have access to
the same information.
2.3 Dialogue with Individual Investors
The share trading unit for Canon Inc. stock was lowered from 1,000 to 100
shares to encourage broader participation in the company by individual investors.
At the same time, Canon created a special portal for individual investors on its IR
website, and started holding briefings on the company’s activities for them. To
date, two briefings have been held in September 2004 and September 2005 and
some 400 individual investors attended each. As part of its efforts to disclose
information that gives individual investors an accurate understanding of the
company’s business situation, Canon also holds regular briefings and similar
events for salespersons from securities companies as required.
2.4 Stakeholders Mapping
Besides the analysis of stakeholder power in terms of their ability to persuade
people and developments, it is also necessary to evaluate, to which degree the
stakeholders will exert their power. Local authorities, for instance, can have a
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high impact on an organization especially Canon itself. If Canon plans to move
their headquarters, local authorities would probably try to influence this decision.
However, they will only be interested to know about other important business
developments, such as introduction of new product lines or new marketing
campaign, without taking any action.
2.4.1 The power/interest matrix
The power/interest matrix provides important information on how to handle
particular stakeholders and groups. It can also indicate, if certain decisions will
receive support or resistance, and which groups have to become included in the
decision process.
http://www.proms-g.bcs.org
2.4.1.1 Sector A (Minimal Effort)
Stakeholders in sector A neither do not have a high own interest in business
plans nor do they have to power to exert much impact. Canon should keep these
groups informed in the necessary extent, but should not invest too much effort
into them. Competitors, Government and others companies can be decline in this
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stage whereby competitors is a major threats can willing to search to any
information on Canon, therefore Canon should put a minimal effort on them
because they cannot effect on decision making. The Japanese government
established the Intellectual Property Policy Headquarters
(http://www.canon.com/environment) in order to strengthen the international
competitiveness of Japanese industry. The headquarters promotes policies on
intellectual property creation, protection and utilization in a centralized and
planned manner.
For the others company on different industries, they have low level of interest on
Canon and also they cannot effect on Canon decision making. Such as
McDonald’s in the food industry, whereby they have minimal interest on Canon.
Mc Donald’s might have interest in doing corporate partnerships in marketing
promoting.
2.4.1.2 Sector B (Keep Informed)
Stakeholders in Sector B do have a high interest in the corporation and its
actions. However, they have limited means to influence things. Despite their low
power, such stakeholders could be valuable allies in important decisions.
Therefore, Canon is advisable to keep them informed about the issues they are
interested in. Communities, Student, and Non Government Organization (NGO)
can be decline in this stage.
Kids Area at Expos (Communities)
At the environmental exhibition, Eco-Products 2005, Canon set up a kids' area in
a booth called "Canon Eco Kids." The area featured a number of creative ideas
to encourage children's interest in the environment, including computers on
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which they could test their environmental knowledge by answering the questions
that came up.
Canon Eco Kids
Environmental Lessons at Elementary and Middle Schools
Employees of Oita Canon Materials visit local elementary and middle schools to
give environmental lessons that feature experiments and quizzes on the
environment. Some 250 students have participated in the lessons since they
began in 2003. Canon also actively gives educational tours of its facilities.
Environmental Lessons
The National Center for Missing & Exploited Children (NGO)
Canon U.S.A. has been a steadfast partner and has consistently donated
products and funding to support NCMEC in the United States and the Child Find
Canada in Canada to locate missing children.
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National Center for Missing and Exploited Children
Its staff offers support programs to help victims and their families cope with the
emotional pain associated with the search for a missing child. As part of the
Canon 4 Kids program, Canon missing children ads that appear in the media
reach a huge number of Americans who might not otherwise see photos of these
missing children, thereby yielding better results.
2.4.1.3 Sector C (Keep Satisfied)
The relationship with stakeholders in sector C could be difficult. In this group,
Canon often finds institutional investors or legislative bodies. They behave
passively most of the time and show a low interest in corporate affairs. Despite
that they can exert an enormous impact on the organization, such as when it
comes to investments. Customers, Employees, Suppliers can be put on this
stage. It is therefore necessary to analyze potential intentions and reactions of
these groups in all major developments, and to involve them according to their
interests.
Canon aims to develop responsible products for the 21st century to satisfy
discerning customers.
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Canon has long been examining how product life cycles impact the environment.
Canon ongoing aim is to make high-performance, functional products while
minimizing the use of precious resources and eliminating waste at every stage.
Canon achieved this first with their compact high-performance cameras. Canon
is determined to stay at the forefront of environment conservation efforts. By
choosing Canon, consumers can express their concern for the environment,
without sacrificing performance or convenience.
Promoting Employee Awareness
Canon Inc. holds a Compliance Week twice a year—once each fiscal half-year to
give all employees a chance to contemplate the meaning of compliance and
corporate ethics and recognize that they are individual missions.
Compliance Week Poster
During Compliance Week, employees take part in workplace meetings to
discuss issues related to compliance and corporate ethics that may arise in
actual operations. Since employees obtain a more concrete grasp of the meaning
of compliance and compliant behavior in the context of their own duties, these
meetings yield results that passive education programs like lectures could never
deliver. Even though most employees are normally very busy, they say that
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participating in workplace meetings helps resolve the questions that arise in
connection with compliance and enhances their awareness of the issues in their
daily duties.
“Canon Inc. is carrying out a range of other initiatives to instill a high sense of
corporate ethics and compliance in its workforce.” (www.canon.com)
Information via the Intranet
Canon Inc. has set up a website on its intranet to enhance everyday awareness
of compliance by providing constant access to information on internal rules and
related information. It also publishes the Compliance Newsletter to bring
important issues to the attention of employees.
Building Strong Ties with Suppliers
The assistance of suppliers is important to realizing Canon’s EQCD concept,
which calls for the delivery of high-quality, suitably priced products to customers
around the world in a timely manner while reducing the environmental weight in
every feasible way. Canon Fundamental Procurement Policies and other internal
regulations are communicated to and understood by suppliers, and then carried
out with their cooperation based on a strong working relationship.
The EQCD Concept (http://www.canon.com/environment)
This is Canon’s basic product development policy.
"E" stands for "Environment": "Companies are not qualified to manufacture goods
if they are incapable of environmental assurance."
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Canon Inc.
"Q" stands for "Quality": "Companies are not qualified to market goods if they are
incapable of producing quality goods."
"C" and "D" stand for "Cost" and "Delivery": "Companies are not qualified to
compete if they are incapable of meeting cost and delivery requirements."
2.4.1.4 Sector D (Key player)
The most crucial stakeholders are persons with high interests and high power, to
be found in sector D. They have to be engaged in all significant growths. The
success behind Canon was not purely technological innovation; effective
management strategy, which was designed to adapt to the changing markets,
played a significant role. The first of these formulated management strategies
was called the Premier Company Plan, which was implemented in 1976 after the
company was unable to pay dividends to share holders for the first time in its
history. The plan called for high revenue and debt free operation. It also instilled
five core objectives in company: corporate principles, unifying the company’s
divisions, strengthening current technology development, investing in their
employees, and improving the company’s overall framework. As the company
grew and market conditions changed, Canon continuously kept revising its
strategic goals in order to stay successful. Currently, Canon is entering into its
Excellent Global Corporation Plan Phase III, which focuses on future
technologies, product expansion, and employee satisfaction. The combination of
constant technological innovation and effective managerial strategy has lead to
much of Canon’s success in the past.
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Canon Inc.
To support such tactics, Canon can compare the actual stakeholder map with a
more favorable one. This allows revealing deviations. It is the basis to find ways
on how to reposition particular stakeholders. For instance, it is possible to
influence the opinion of an important customer by involving him in early planning
stages in order to find a solution that meets the needs of both parties. The power
of a supportive department could be increased by inviting representatives from
this department into project teams and planning committees.
2.5 The Important of Stakeholder Analysis
A stakeholder Analysis can help Canon identify any or every interest of all
stakeholders who may effect or be effect by any project or programmed and also
the product by Canon. Canon can recognize and also classified any potential
conflicts or risks that could make vulnerable the initiative by Canon. Such as
customers switch to substitute product whereby the pricing cost that impact the
buyer to spend more on digital camera especially Canon. Canon also put a high
priority on building strong relationship with their stakeholders in term of more
opportunity can be develop during the implementation. Based on the concept of
kyosei, and in the pursuit of the “excellent global corporation” ideal defined by
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Canon Inc.
this philosophy, Canon shares responsibility for the impact of its activities on
society, not only in its business but also in other human endeavors. Canon have
already on their third phase of Excellent Global Corporation whereby
stakeholders are the important key success together with managerial strategies
and technology invention. In 2006, Canon began Phase III of their Excellent
Global Corporation Plan. During Phase III Canon intend to pursue a course of
sound growth with new businesses born of innovation, taking into account
ongoing economic globalization and the worldwide spread of broadband
networks, while maintaining the sound profit structure and financial balance
Canon have established over the past ten years. To accomplish this, Canon plan
to promote five essential strategies in an effort to become a top 100 company
globally in terms of such key business indicators as net sales, net income, equity
ratio and market capitalization. Therefore Canon are making substantial efforts in
the area of human resource development, strengthening their education and
training programs to cultivate trusted, responsible employees, and foster global
leaders.
Canon Environmental Goals
At the same time, canon are focusing on maintain in leading the market by keep
their stakeholder informed on the next generation technology. Conon not only
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Canon Inc.
making profit from preserve strong relationship with their stakeholders but also to
promote their social and cultural support activities in accordance with the local
needs of each community. Through these activities Canon aim to fulfill their
social responsibilities as a good corporate citizen, contributing solutions to
various social problems for the benefit of the Earth and humanity, and striving to
be a company that is loved, trusted, and respected worldwide.
TASK 3
3.0 ENVIRONMENTAL AUDIT (Porter’s Five Forces)
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Canon Inc.
The Porter 5 forces analysis is a framework for business management developed
by Michael Porter in 1979. It uses concepts developed in Industrial Organization
(IO) economics to derive 5 forces that determine the attractiveness of a market. It
is also known as FFF (Fullerton's Five Forces). Porter referred to these forces as
the microenvironment, to contrast it with the more general term macro
environment. They consist of those forces close to a company that affect its
ability to serve its customers and make a profit. A change in any of the forces
normally requires a company to re-assess the marketplace.
(http://en.wikipedia.org)
By using a model detailing environmental threats that may face a business,
managers are able to understand what strategic actions to make to overcome or
counteract their threats. Porter’s Five Forces is a popular environmental model
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Threat of New Entrants Economic of Scale The likelihood of
retaliation from existing industry player
Threat of Substitute Buyer willingness to
substitute The relative price &
performance of substitute
Supplier Power There are many
buyers & few dominant suppliers
There are undifferentiated, highly value product
Powers of Buyers There are few
dominant buyers and many sellers in the industry
Product are standardized
Competitive of Rivalry The structure of
competition Degree of
differentiation
Canon Inc.
that measures five industry attributes that may threaten a firm’s success. These
five threats are discussed as they pertain to Canon Inc below.
3.1 Threat of New Entry
Assessment of the following elements allows a determination of the level of entry
threat in an industry:
1. Economies of Scale
2. The likelihood of retaliation from existing industry player
3.1.1 Economic of Scale
Canon has over 115,583 employees. As a large volume of distributor worldwide,
Canon is able to leverage its size when negotiating with suppliers. For smaller
companies with few locations such as Konica Minolta, entering the market with
competitive pricing is more difficult because they will not have the buying power
of a larger customer and will be forced to operate under lower margins; a barrier
to entry. In addition, Canon’s has a well established and expanding distribution
channels. New entrants will have a larger shipping expense from suppliers and
less efficient distribution.
“Konica Minolta is focusing its business elsewhere. Japanese photographic
equipment maker Konica Minolta has announced plans to withdraw from the
camera business.”
(http://www.hull.ac.uk/engineering)
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Canon Inc.
Canon Inc Centre
3.1.2 The likelihood of retaliation from existing industry player
With more than 60 years in the camera experience industry and over 200
locations nation wide, Canon has established itself as a known leader in the
cameras industry although this industry is not their major business. Canon offers
a standardized product offering within a market and can leverage its reputation.
Brand recognition alone is a barrier to new entrants in the market place.
Consumers identify the Canon’s product and have familiarly with Canon’s
offering, new entrants will face consumer concern over product offering and
pricing.
Digital SLR Cameras
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Canon Inc.
Canon digital single-lens-reflex (SLR) cameras support photographers in their
quest to capture split-second moments and expressions to produce outstanding
photo images. Fusing decades of camera expertise with leading-edge digital
technologies, Canon pursues the development of such proprietary key
technologies as sensors, image processors, and lenses.
Comparison between Canon EOS 400D, Nikon D80 and Sony DSLR A100
The EOS 400D / Digital Rebel XTi has the same basic feature set as the other
two ten megapixel cameras here. The biggest difference is that both the Nikon
D80 and Sony DSLR-A100 offer some kind of advantage for their premium. The
Nikon D80 has a much wider range of camera control, a larger and brighter
viewfinder, better ergonomics, a bigger battery, faster USB, spot metering and
surprisingly useful customizable automatic ISO. The Sony DSLR-A100 also has
better ergonomics, spot metering, a bigger battery, faster USB and built-in CCD-
shift Anti Shake (although we don't believe this to be as effective lens image
stabilization). The EOS 400D's 'on paper' advantages are listed below, not a
huge list and quite a surprise to see how the competition have not just caught up
with Canon but have overtaken them.
3.2 Threat of Rivalry
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Canon Inc.
Canon’s faces a high level of competition among its major competitors. The
intense level of rivalry discourages new entrants and consolidates the industry
amongst the larger players. In effect new entrants are discouraged and smaller
competitors are driven out.
3.2.1 The structure of competition
Canon encounters intense competition in all areas of its business activity
throughout the world. Canon's competitors range from some of the world's major
multinational corporations to smaller, highly specialized companies. Canon
competes in a number of different business areas, whereas many of its
competitors are relatively more focused on one or more individual industries.
Consequently, Canon may face significant competition from entities that apply
greater financial, technological, sales and marketing or other resources than
Canon to their activities in a particular market segment.
The principal elements of competition which Canon faces in each of its markets
are technology, quality, reliability, performance, price and customer service and
support. Canon believes that much of its ability to compete effectively depends
on conducting successful research and development activities that enable it to
create new or improved products and release them on a timely basis and at
commercially attractive prices.
Competition in the camera industry is intense, with many established market
participants offering similar products. Canon's primary competitors in digital
cameras are Sony Corporation, Fuji Photo Film Co., Ltd., Olympus Optical Co.,
Ltd., Nikon Corporation, Casio Computer Co., Ltd. and Eastman Kodak
Company.
Currently, Canon shares the top position with Nikon Corporation in unit sales of
compact digital cameras, while Canon is the current leader in the digital single-
lens reflex camera segment. Canon's primary competitors in conventional film
cameras are Nikon Corporation, Konica Minolta Holdings, Inc., Pentax
Corporation, Olympus Optical Co., Ltd., and Fuji Photo Film Co., Ltd. Hindered
by the surging popularity of digital cameras, the conventional film camera market
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Canon Inc.
continued to shrink in fiscal 2003. The introduction of new models, however,
enabled Canon to retain its position firmly atop this market worldwide. Canon's
primary competitors in digital video camcorders are Sony Corporation, Victor
Company of Japan Ltd. and Matsushita Electric Industrial Co., Ltd. In fiscal 2003,
Canon expanded greatly its overall market share in digital video camcorders,
especially in the United States. Canon believes that developing cameras with
increasingly high resolution and faster image processing are critical to its ability
to remain competitive in the fast-growing digital camera market segment.
3.2.2 Degree of differentiation
There are almost the same when talking on digital still camera. Canon has to
face their competitors, only technology can be differentiated between Canon and
others rival. Sony Corp. is planning monthly production of 80,000 digital SLR
cameras, dubbed the Alpha DSLR-A100, which are set to go on sale next month.
Canon has already produce DSLR technology on EOS model. To be competitive
in the market Canon is planning another prototype based on OLED technology.
Canon OLED displays comprise a unique group of organic compounds derived
from Canon’s research into the design of electro photographic organic
photoconductor (OPC) materials. All of the OLED components, including
luminescent and carrier injection materials, were developed to bring out their
superior properties. Canon’s light-emitting materials realize the highest standards
of efficiency and color purity.
3.3 Threat of Substitutes
A substitute is a product or service that meets customer needs in a similar or
sometimes different way than the original product or service. In the Digital
camera Industry,Canon’s general merchandise and prescriptions lack substitutes
but product differentiation in terms of total offering can create substitutes in the
market.
3.3.1 Buyers willingness to substitute
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Canon Inc.
Actual or potential substitute offerings limit prices and profits. Market
requirements for what was once known as “cameraphones” has changed
drastically within the past year. Within the next two years, mobile phones will be
known more as “mobile communication and entertainment devices”, perhaps with
another name. As a result, camera functionality on entertainment phones will
move down to third spot as a market requirement from 2nd. The phone as a
communications device (voice and MMS), but music and digital books (MP3)
playing and storage will move into the 2nd most required feature. Video
capabilities will become the fourth requirement and digital radio and TV are on
the horizon.
The K810 Cyber-shot phone is a sleek, high-performance device boasting a 3.2
megapixel camera including auto focus and a Xenon flash. Innovative
applications such as Photo Fix help to further improve the quality of pictures,
even after taken them. Illuminated camera icons to the side of the main keypad,
which light up when in camera mode, allow user to access camera menu options
at the touch of a button.
3.3.2 The relative price and performance of substitute
The worldwide consumer digital camera market experienced huge pricing
pressure on the low-end, primarily due to camera phone adoption, effecting DSC
unit sell-through which remained nearly flat from 2005 at a 26.3% growth rate,
amassing $11.2B in street valued revenue. Those non-branded camera vendors
providing sub $150 units suddenly found themselves in competition with branded
vendors at retail selling cameras at the same price-points. Many were forced out
of the market. (http://www.imergeconsulting.com)
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Canon Inc.
Cameraphones are a new platform that does not have to mimic previous analog
usage paradigms. Cameraphones are wireless and Digital Specific. They can
offer features only a digital device can provide and not be so encumbered with
pre-existing usage models. Conversely, digital still cameras have been relegated
to being regarded as the “workhorse” of capture devices, used for only the most
mission critical family or social circumstances. The perception is an “all work and
no play” device to consumers.
Digital camera providers have been so focused on getting cameras to a point
where they can mimic film cameras; they have forgotten the “digital specific
aspects” of digital cameras, the digital features that will allow a camera to go well
beyond film cameras in functionality and ease-of-use.
3.4 Threat of supplier’s bargaining power
Suppliers are the business that supply materials and others products into the
industry. The cost of item that bought from suppliers such as raw materials,
components can have significant impact on a company’s profitability. If suppliers
have high bargaining power over a company, then in theory the company
industry is less attractive. The bargaining power of suppliers will be high.
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Canon Inc.
Based on the chart given shows that Canon Inc manufacturing their product by
itself to make sure that they have the quality standard to achieve a high quality.
3.4.1 There are undifferentiated, highly value product
Canon’s feels little threat from suppliers. Canon’s is a large retailer with
purchasing power due to volume and a large number of suppliers. Canon’s
strategy is to purchase inventory items from many foreign and domestic
suppliers. If Canon’s were to lose one supplier, the impact would have little
bearing on the business. Every competitor that is competing with Canon Inc in
Camera industry is always on the run to produce better than others. Nikon is the
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Canon Inc.
first to produce Single Lenses Reflect (SLR) follow by Canon in the next few
years. In the camera industry it is highly hard to compare between others. Only
technology can differentiate them. Canon has to face their competitors, only
technology can be differentiated between Canon and others rival. Canon is
pursuing the next technology to be able to maintain the leaders in the market.
Suppliers have the major impact due to only few suppliers for raw material. For
be able to compete with others and produce a high quality of camera, Canon
must maintain continue purchase a raw material from their supplier.
3.4.2 There are many buyers & few dominant suppliers
Canon purchases a variety of parts and raw materials, such as glass, aluminum,
plastic, steel and chemicals for use in product manufacturing. All finished and
semi-finished products purchased from outside sources are produced in
accordance with Canon's designs and specifications. Canon purchases parts and
raw materials worldwide for its global production activities. Canon assesses and
selects suppliers based on a number of criteria, including environmental
friendliness, quality, cost, stability of supply and financial condition. In addition,
there has been a recent increase in prices of parts for optical products, due in
part to the limited number of suppliers of glass materials and light source lasers.
However, Canon has not experienced any difficulty obtaining parts or raw
materials and believes that it will be able to continue to obtain the same in
sufficient quantities to meet its needs.
3.5 Threat of Buyer’s bargaining power
Future sales of digital still cameras are dependent upon user upgrade cycles,
which will increase the emphasis on powerful image processors, faster analog-to-
digital converters, wireless connections for transferring pictures, more nonvolatile
flash NAND memory and higher resolution image sensors.
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Canon Inc.
Curve of Innovation of DSCs
From the curve it shows that the quality levels that can impact the purchasing
power by customers demand. Over the years demand on DSC is boost while the
level of quality enhance. That means demands over DSC are correlated to the
enhancing on DSC.
3.5.1 There are few dominant buyers and many sellers in the industry
Nowadays almost everybody have their on electronic device mostly digital
camera. People are accepted the technology changing whereby Camera not only
use for professional term only. They make a full use as hobby also. Over the
years demand on the digital camera are boost through technology changing.
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Canon Inc.
Based on the tables above buyers can be segmented into several part that is
customers that are using for simple not to consider on the technology, but the
easier way to shooters. This types of buyer re more concerning on pricing.
Demand on compact camera are more challenging whereby camera as a hobby.
Almost every range are using it. SLR model are more attractive for armature and
Professional photographers. These types of customers are dominant rather than
supplier. Canon are spending more on Research and Development to be able to
maintain the market leaders in SLR model, although Nikon their rival is the first to
launch SLR model, Canon still dominate the market. With the dominant buyer
Canon is pursue next generation technology to maintain the professional
photographers pay for their Canon and gains customers loyalty.
3.5.2 Product are standardized
In the digital still camera industry, mostly every company including Canon is
focus on imaging whereby each company are competing on the technology but
still standardized on the purpose of capturing imaging. Canon is popular on their
EOS model based on Single Lenses Reflection (SLR). Nowadays Mostly every
major player in the market are already implementing SLR technology,
advantages on Canon is they is the first who invent EOS technology. Buyer have
the power to choose because majority every company implement the same
technology.
To boost sales, Canon are developing new "hybrid" models that will capture high-
resolution still pictures while also recording high-definition full-motion movies.
Many of these hybrid still/video cameras will contain high-speed CMOS image
sensors.
Digital still cameras will outsell film cameras by a ratio of four to one in 2006, with
4- to 6-Mpixel point-and-shoot models for consumer compact cameras.
Consumers still have the buying power to control the market. In 2010, people
mostly are expects more than 89 million digital still to be sold, accounting for
more than 90 percent of all still-picture cameras bought worldwide.
3.6 Ability to expand into next-generation technologies in the future
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Canon Inc.
Next-generation OLED (organic light emitting diode) displays are ideal for use in
such mobile devices as digital cameras and video camcorders. These self
emitting displays achieve not only high luminance and energy efficiency, but also
offer high resolution independent of the viewing angle and fast response speeds,
making them well suited for video-display applications.
Organic electroluminescence occurs when voltage is applied to excite organic
materials, which, in turn, releases energy as light.
Structure of OLED Display
(http://www.canon.com/technology/)
Canon OLED displays comprise a unique group of organic compounds derived
from Canon’s research into the design of electro photographic organic
photoconductor (OPC) materials. All of the OLED components, including
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Canon Inc.
luminescent and carrier injection materials, were developed to bring out their
superior properties. Canon’s light-emitting materials realize the highest standards
of efficiency and color purity. The red-light-emitting material, which utilizes
phosphorescent material, achieves 12.4 lumens/W and a chromaticity of (0.66,
0.34), the fluorescent-based green-light-emitting material achieves 26.4
lumens/W and (0.32, 0.63), and the blue-light emitting material achieves 4.9
lumens/W and (0.15, 0.15).
Lumens/W: luminous efficacy, expressed as the amount of light that can be
generated with 1 W of power. The value is derived by dividing the amount of light
(lumens) by the power consumption (W).
Example of OLED Display (Prototype)
(http://www.canon.com/technology/)
The display’s top-emission structure, which emits light from the top side,
increases the aperture ratio and realizes high-luminance, low power
consumption, and long life.
Canon is focusing its energies on the development of devices and process
technologies toward commercializing these displays in the near future. Canon
aim to mass produce high-performance OLED elements at a low cost and
achieve advanced functionality in mobile devices.
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Canon Inc.
3.7 Japanese digital camera growth to slow in 2007 (Threat)
Growth in digital camera shipments by Japanese makers in 2007 is expected to
slow to 7.5 percent from a year earlier, when lower prices and a wider variety of
models with interchangeable lenses spurred growth to 22 percent.
(http://today.reuters.com/news)
Global shipments by makers such as Canon Inc are estimated to rise to 84.9
million units in calendar 2007 from 79.0 million units last year, according to
figures released by the Camera and Imaging Products Association.
Demand will continue to lose speed as shipment growth is expected to slow to
4.3 percent in 2008, and 2.5 percent the following year,
The Tokyo-based industry group also forecast shipments of digital single-lens
reflex (DSLR) models, geared for professionals and hobbyists, will continue to
show double-digit growth in 2007, but their growth too will slow compared to
2006.
This year, shipments of DSLRs are forecast to increase 13.9 percent to 5.99
million units, lagging behind a 38.9 percent jump in 2006 to 5.26 million units.
(http://today.reuters.com/news)
Canon Inc and Nikon are the dominant leaders in the market for DSLRs, while
newcomers such as Sony and Matsushita Electric Industrial are also trying to
expand in this segment as DSLRs are more profitable than compact devices.
Shipments of compact models, which have faced fierce price competition, is
forecast to increase 7 percent to 78.9 million units this year, lower than the 20.9
percent jump in 2006 led by demand in emerging markets and the United States.
Other major Japanese digital camera makers include Olympus Corp. Fujifilm
Holdings Corp. and Pentax Corp. which compete against global rivals such as
Eastman Kodak and Samsung Electronics Co.
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Canon Inc.
3.8 Sony enters digital SLR camera market (Threat)
Sony Corp. is planning monthly production of 80,000 digital SLR cameras,
dubbed the Alpha DSLR-A100, which are set to go on sale next month. The
product is a culmination of Sony's yearlong collaboration with Japanese precision
equipment maker Konica Minolta Holdings Inc., which pulled out of the camera
business in January and sold its assets in that sector to Sony.
Sony officials said the entry into SLR cameras was symbolic of how the company
was trying to revive its brand image. And they are banking on Sony appeal as
digital photos become enjoyed on high-definition TVs, shared with others through
the PC and stored in DVD players.
SLR cameras, which use interchangeable lenses and offer more manual
controls, tend to be favored by professional photographers but are also, growing
in popularity among camera enthusiasts. Sony already makes various simpler
point-and-shoot digital cameras, including the popular Cyber-shot models.
(www.physorg.com)
The camera body of the DSLR-A100 will be available in July at a retail price of
about 100,000 yen (US$900; €700). Lenses range in price from about 50,000
yen (US$450; €350) to 800,000 yen (US$700;€540). The 10.2-megapixel camera
will work with 19 Sony lenses.
3.9 Organizational Audit (Value Chain Analysis)
Value Chain Analysis describes the activities that take place in a business and
relates them to an analysis of the competitive strength of the business. Influential
work by Michael Porter suggested that the activities of a business could be
grouped under two headings:
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Canon Inc.
(1) Primary Activities - those that are directly concerned with creating and
delivering a product such as component assembly and
(2) Support Activities, which whilst they are not directly involved in production,
may increase effectiveness or efficiency such as human resource management.
It is rare for a business to undertake all primary and support activities.
3.9.1 Primary Activities
CANON VALUE CHAIN ANALYSIS
In order to fully understand Canon’s current position in the digital camera market,
the above value chain will be used to assess Canon’s strengths and weakness in
each of the five major stages. The assessment will be based on comparison of
market trends and Canon’s response to that trend.
TECHNOLOGY RESERCH AND DEVELOPMENT
Canon over the last ten years has been in the top three companies receiving
patents in the US, an indication of strength in technology R&D. Technology R&D,
which is described below, encompasses the core image processing technology
as well as new features that market is moving towards.
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Canon Inc.
New Digital Imaging Processor (DIGIC II)
DIGIC, Canon's proprietary Digital Imaging Processor is a core device in Canon
digital cameras. DIGIC represents the newest stage in their Digital Imaging
Processor development. Most of the functions required to process signals in a
digital camera are condensed on this single chip, which measures a mere 10 mm
square. Utilizing its proprietary technologies, Canon designed the DIGIC
processor to alleviate the heavy burden normally placed on the CPU.
Furthermore, improvements to the chip's algorithms contribute to higher image
quality, autofocus (AF) precision and processing speeds. The DIGIC II imaging
processor developed in 2004 handles the increased resolution of CCDs and has
dramatically increased performance compared to the original DIGIC.
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Canon Inc.
16.7-megapixel Full Frame 35mm CMOS Sensor
Raising the operability of a digital SLR camera to the level of film-base SLR
cameras required development of a large high-resolution CMOS image sensor
(see page 61). Digital cameras normally use smaller image sensors than the
frame size (36 mm x 24 mm) of 35mm film. When an interchangeable lens is
attached to digital SLR cameras with smaller image sensors, the effective angles
of view and perspectives of the captured image differ from the focal length
marked on the lens. For this reason, photographers were unable to utilize their
experience using 35mm film SLR camera lenses with digital SLR cameras.
iSAPS and Smile Shot
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Canon Inc.
The iSAPS technology is also Canon’s proprietary technology but similar
technologies also exist with other manufactures. iSAPS technology is Canon’s
algorithm that makes optimal adjustments to focus and other settings on the
camera by measuring the distance to the subject and brightness levels. This
allows good photos to be taken effortlessly. Other manufactures have similar
technologies that automatically configure the camera based on some external
factors. Canon thus has no real advantage over its competition in this
technology. Canon is also working on a technology called Smile Shot9, which is
designed to take pictures of subjects when they are smiling. The success of such
technology is yet unknown, so it is hard to measure Canon’s performance by it.
However, since Canon is working on such innovative projects, there is likely to be
at least one big success in future.
Overall, Canon is at the forefront of technological innovation for cameras. Given
Canon’s competency in the imaging technology, there is no doubt Canon will
continue to hold the leadership role in future.
DESIGN INOVATION
Canon has constantly been working on technology to cut down on the size and
the weight of a camera. Canon was among the first producers to introduce
compact cameras with its PowerShot series. The DIGIC II chip integrated three
chips in a smaller size, thus reducing the size and weight. In addition, Canon
developed ultracompact lens for their PowerShot series which further reduced
the size of the camera10. However, compared to Sony and Kodak, Canon lags
behind in design. Kodak has the pocket series which is much slimmer than
Canon’s slimmest. Sony also has many models that are “ultra-slim”. Furthermore,
Sony and Kodak have been more creative in the physical appearance of the
cameras. Sony recently released a 5 megapixel swivel camera and Kodak
released one with two lenses allowing for easier panoramic photos. Both of these
designs depart from the norm, making the camera look more “hip” but Canon has
not been innovating on the design.
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Canon Inc.
Large Viewing Screens
As customers demand smaller size, they also demand larger screens for their
cameras. Larger screen allows for easier reviewing of photos. Companies like
Sony and Samsung offer large 3 inch screens. Canon offers only the industry
average, 2.5 inches. Kodak and Sony have gone a step ahead and offer touch
screens on some models. Canon, once again, has not done so.
MANUFACTURING
Before Canon starts to manufacture, it develops computer prototypes using CAD
software. This cuts down on production time, but its not a real advantage over
other competitors, because they all use CAD. Canon, however, did recently
switch to cell production, which requires a team of assemblers to put together the
camera. This increases the quality of the product and reduces the cost, because
conveyor belts are no longer needed which require significant amount of space.
Canon has also tried to incorporate “Just in Time”11 inventory system to cut
down on the cost of inventory waiting to be used.
The physical manufacturing of cameras takes place in Japan (60%), Malaysia
(20%), and China (20%)12. Producing in these countries allows cheaper labor to
be utilized. Sony and Kodak implement similar strategies and thus Canon gains
no real advantage over Sony and Kodak with this strategy.
MARKETING
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Canon Inc.
All three of the big players in the market have taken drastic steps to advertise
their products. Canon in particular has hired tennis star Maria Sharapova as its
spokesperson. Canon has also managed to make itself the official camera of the
NFL and introduce its new models in a fashion show in New York. Regardless,
Canon is making every effort to market its product, however, so are the other
two. Kodak paired with NASCAR and Sony paired with various TV shows. Canon
did however partner with Staples to introduce Canon Corner where customers
can test out Canon products. Thus far this implied has been well received by
customers. All in all, the effects of marketing are really unknown because there
no clear way to measure advertisement success. As a result, it is difficult to judge
Canon’s strategy.
SERVICE
One of the most important stages of the value chain is the services stage.
Services are provided to customers after they purchase their product to keep
them satisfied with the product and to generate revenue. The following are
services that Canon needs to focus on.
Printing and Online Storing
Printing digital camera photos is among the most requested service by digital
camera users. Canon currently has its “Canon Gateway”, an online service that
allows users to print photos. This service is inferior to others like Shutterfly.com
that offer unlimited space to store images and easy sharing and printing. Kodak
has their own Easy Share Gallery, and smaller firms like Panasonic have
patterned with Shutterfly.com to allow easy integration with their cameras. Canon
has thus fallen behind in this service Canon has done well in selling its photo
printers along with its cameras. But with a growing trend to have the pictures
printed by retail stores, Canon has not been able to capture the retail photo
printing business. Kodak and Fuji dominate on that front.
3.10 Support Activities
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Canon are making significant efforts in the area of human resource development,
rise their knowledge and training programs to develop trusted, dependable
employees, and promote global leaders. Together, Canon is pursuing more
impartial human resource policies to nurture strong, independent business
professionals.
Economic Activities through Maximizing Resource Efficiency
Canon is working to exploit resource efficiency in an effort to unify the two
vectors of environmental assurance activities and economic activities. This
means Canon will boost the value of products and services while raising
environmental efficiency throughout product lifecycles In 2003, Canon put forth
the dominant indicator Factor 2 as their Vision for 2010 to put resource efficiency
maximization into more real practice. Factor 2 stand for the goal of at least
doubling overall lifecycle environmental efficiency by 2010, using 2000 as the
baseline date. Canon set Mid-Term Environmental Goals (2004-2005) to serve
as milestones, and in 2005 Canon achieved almost all the individual goals. This
activities are carry on as a support activities through the kyosei philosophy that
contributing to society through technology innovation.
Pattern Strategies
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Canon has long promoted the globalization of business activities, so the
company puts even more stress on patent applications overseas than in Japan.
As a result, as of the end of 2005, Canon overcome approximately 78,000
patents and utility models globally, of which around 26,000 were for Japan,
24,000 for North America, 22,000 for Europe, and 6,000 for other countries.
Canon file patent applications overseas only after constructing detailed filing
strategies based on business strategies, and technology and product trends in
each region, and after carefully investigating the regions and countries where the
patents are necessary. The number of U.S. patents Canon own is expanding at
about the same annual rate as their consolidated net sales. In recent years,
Canon have prioritized the filing of patent applications in the Asian region, where
technological innovation has been noteworthy. In particular, China has become
both an huge production site and a major consumer nation, so Canon are
stepping up their filing activities there.
TASK 4
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4.1 PEST Analysis (http://www.skylinecollege.com)
Canon evaluated the environmental factors appropriately before investing in
certain areas or country. The political environment is one of the major factor
Canon put on consideration. The stability of political is important to make sure
that Canon can fully corporate with the government on the country. For example
at the time of Canon entry India on 1997 was stable. Though the government
was a coalition, yet it was pro-liberalization. This spelt stability on the economic
policies front and thus the political environment was conducive to investment. As
for Malaysia, when Canon enter the market to built up manufacturing area,
whereby Malaysia is an open country that are invited any multinational company
such as Canon to invest in the market in Malaysia.
Economic environment in Europe, U.S.A, Asia too was very healthy. The
economic policies were pro-investment. Fiscal and monetary reforms were in the
pipeline and pointed towards a bright future. Public sector participation was being
abetted by the government. All in all, the economic environment too was grown.
Economic globalization and dramatic advances in information technology are
greatly changing the structure of markets around the world. In line with these
changes, Canon U.S.A., Canon Europe, Canon China, and Canon Sales in
Japan have carried out the restructuring and consolidation of Group companies
in their respective regions to increase the efficiency of sales networks, and to
upgrade information systems and distribution networks. In 2005, Canon aim to
complete the sales and marketing structure reforms Canon have pursued to date,
thus increasing their selling power and efficiency.
Social environment was not of much of concern to the Canon to be investing in
certain country. They do not have high impact on Canon profitability, however
based on the kyosei philosophy concept. The ideal behind this philosophy is a
society in which all people harmoniously live and work together for the common
good. Canon are putting social environment as an important for them to keep
good relationship with people surround them. Below is several example how
Canon USA are putting social environment as one of the most stakeholder.
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Asian American Drug Abuse Program (AADAP) (Canon Business Solutions,
West, Inc.)
The AADAP’s programs, including water conservation, HIV/AIDS outreach and
cross training, Drug Court Services for the Inglewood Municipal Courts and
tobacco education, is supported by Canon Business Solutions, West, Inc.
through donations.
Los Angeles Urban League(Canon Business Solutions, West, Inc.)
The mission of the Los Angeles Urban League is to enable African Americans
and other minorities to secure economic self-reliance, parity, power and civil
rights. Canon Business Solutions, West, Inc. supports their activities through
donations.
Support for Social Welfare Foundations saving Children (Canon Business
Solutions, West, Inc.)
Several Social Welfare Foundations, whose mission is to save children with
serious illnesses and prevent teenage prostitution, are supported by Canon
Business Solutions, West, Inc. through cash donations and products.
Technological environment prevalent in India was very dynamic. India was fast
being recognized worldwide as the leader in Information Technology. Allied
industries were booming and India seemed to be on its way up. Though there
was an associated fear that this aspect of the technological environment posed.
The development of Information Technology threatened to produce a 'paperless
office'. This was a direct threat to the sustainability of not just Canon but the
entire photocopier industry.
4.2 Strategic Capability > Core Competency
A core competency can take various forms, including technical/subject matter
know how, a reliable process, and/or close relationships with customers and
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suppliers (Mascarenhas et al. 1998). It may also include product development or
culture such as employee dedication. Modern business theories suggest that
most activities that are not part of a company's core competency should be
outsourced. (http://en.wikipedia.org)
A core competency is something that a firm can do well and that meets the
following three conditions specified by Hamel and Prahalad (1990):
(http://en.wikipedia.org)
4.2.1 It provides customer benefits
In Japan and overseas, product service is provided in part by independent retail
outlets and designated service centers that receive technical training assistance
from Canon. Canon also services its products directly. Most of Canon's business
machines carry warranties of varying terms depending upon the model and the
country of sale. Cameras and camera accessories carry a one-year warranty
based on normal use. Canon services its copying machines and supplies
replacement drums, parts, toner and paper. In Japan, most customers enter into
a maintenance service contract under which Canon provides maintenance
services, replacement drums and parts in return for a per-copy charge. Copying
machines which are not covered by a service contract may be serviced from time
to time by Canon or local dealers for a fee.
4.2.2 It is hard for competitors to imitate
Accurate Reading of Delicate Light
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Canon's EOS-1V, EOS-1Ds Mark II N/1Ds Mark II employ a 21-zone evaluative
metering sensor linked to 45 Area AF points. This multiple-zone evaluative
metering system uses output from 21-zone sensors and AF point information to
adjust exposure instantly, calculating at high speed with their newly developed
algorithm. This configuration enables the camera to make compensations as
necessary and maintain exposure stability. It also uses an average metering
element depending on periphery conditions. This assures stable exposure even
when composition changes slightly, or when multiple metering points cover the
subject. In addition to 21-zone evaluative metering, these cameras all have six
AF metering functions. Users thus benefit from a diversity of choice, from manual
to automatic exposure.
4.2.3 Provide potential access to avoid variety of markets
Canon sells its products primarily through subsidiaries with responsibility for
specific geographic areas. Each subsidiary is responsible for its own market
research and for determining its sales channels, advertising and promotional
activities.
In Japan, Canon sells its products primarily through Canon Sales Co., Inc.,
mainly to dealers and retail outlets.
In the Americas, Canon sells its products primarily through Canon U.S.A.,
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Inc., Canon Canada, Inc. and Canon Latin America, Inc., mainly to dealers and
retail outlets.
In Europe, Canon sells its products primarily through Canon Europe N.V., which
sells primarily through subsidiaries or independent distributors to dealers and
retail outlets in each locality. In addition, copying machines are sold directly to
end-users by Canon (U.K.) Ltd. in the United Kingdom, and by Canon France
S.A. in France.
In Southeast Asia and Oceania, Canon sells its products through subsidiaries
located in those areas. In addition, copying machines are sold directly to end-
users by Canon Australia Pty. Ltd. in Australia.
4.3 Expectation of Stakeholders > Culture influence from within and outside
Canon
Canon has invited external stakeholders to comment on the quality and
transparency of their company. In keeping with the company’s interest in
deepening its relationships with stakeholders, Canon has modified the comment
process to include more two-way dialogue and more transparent discussion of
issues. It is Canon’s intention to extend this process further for the 2007 by
hosting a roundtable session to gain further insight into stakeholder expectations
of the company’s management, performance and reporting. Canon believes that
third-party opinions serve two purposes.
1. Give stakeholders information that helps them judge how well Canon has
met their expectations and that hints at what can be expected from Canon
in the future.
2. As reference for improvements in future sustainability activities
4.3.1 Product Safety
Product safety and durability is the basis of quality that is trusted by consumers.
Canon have therefore established their own product safety technical standards
that not only meet safety standards stipulated in the law, but also consider
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customer perspectives on product use. Canon conduct rigorous quality control in
design, evaluation and manufacturing to ensure “substantial safety”—a level of
safety that meets these standards
4.3.2 Security
Canon believes that, in order to protect their companies and employees from
increasingly diversified risks and maintain the trust of society, it is necessary to
develop a robust risk management system and build a crisis management
system capable of rapidly and flexibly addressing incidents should they occur.
The Canon Code of Conduct-Information Security Rules stipulates their response
to security risks when they materialize. The section clearly states that information
is the source of value generated by a company and that the ability to manage
information determines whether a company will survive. In accordance with this,
Canon work to eliminate risks by clarifying the factors that put information
obtained from customers and business partners at risk of being divulged and by
establishing detailed rules and policies. In addition, because unauthorized
access to buildings and grounds leads to theft and information leaks, a
management system and code of conduct for physical security are also
prescribed in the information security section. In addition to these initiatives,
Canon have constructed a rigorous system of security export control regulations
based on international standards, and constantly work to maintain or improve
their level of management.
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Canon Inc.
Preventing Air and Water Pollution
Canon addresses alleviation of environmental burden from operational sites by
reducing emissions of NOx*1 (nitrogen oxides) and SOx*2 (sulfur oxides), major
causes of air pollution and acid rain; reducing BOD*3 (biochemical oxygen
demand) and COD*4 (chemical oxygen demand), indexes for environmental
burden in water environments; and reducing emissions of phosphorous and
nitrogen, which harm water environments. Specifically, Canon Inc have switched
the type of fuel from heavy oil to kerosene, which generates almost no SOx;
Canon are eliminating the use of hazardous substances; and Canon have
installed air pollutant removal devices like scrubbers and activated carbon
absorption filters, as well as the latest wastewater treatment devices. Canon also
regularly measure the environmental burden of emissions from operational sites
under applicable laws and regulations for each region and also under Canon
voluntary in-house rules. Environmental burden increased in 2005, however, due
to increased production volume.
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(www.canon.com/environment)
NOx (nitrogen oxides)
A major cause of air pollution, acid rain, and photochemical smog, NOx is
generated when the nitrogen in fuels is oxidized, or when nitrogen in the
atmosphere is oxidized during high-temperature combustion.
SOx (sulfur oxides)
A major cause of air pollution and acid rain, SOx is generated when fossil fuels
such as oil and coal are burned.
BOD (biochemical oxygen demand)
The amount of oxygen consumed when microorganisms degrade organic matter
in water.
COD (chemical oxygen demand)
The amount of oxygen consumed when oxidizing agents oxidize organic matter
in water.
TASK 5
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5.1 Historical Analysis.
As the term implies, this approach to analyzing performance looks at
performance over time and in particular compares current performance with
previous years in order to highlight any significant changes. Usually, historical
performance analysis looks at the more conventional measures of performance
in organizations which can be readily quantified, such as for example, sales,
market share, financial ratios and profitability. Historical analysis of performance
may indicate that performance is satisfactory compared to previous years when
in fact realistically expectations about performance should be increased over
time. In other words, historical analysis of performance can lead to future
expectations for standards of performance being too low. Finally, historical
analysis may lead to complacency about an organization’s performance and
strategic capabilities when in fact everyone else in the industry is performing
much better, it is an insular way of looking at performance.
From the table above shows that total sales for the year 2005 and 2006 on
camera industry for Canon. It indicate that on the 3rd quarter Canon achieve to
increase their total sales as much as 15.7% and operating profit gross into 38.1%
change over the year. Through on the 4th quarter Canon achieve to boost on
unaffiliated customers to 13.8% and their operating profit gross to 26.8%.
Although 4th quarter is lower than 3rd quarter, over the year total sales are
increase 47.4% different from 2006 and 2005. As a culmination, show that the
increase in sale that projected different almost 50%. The performance illustrate
the quality product in the market and also as the market leader.
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Based on this basic management policy, Canon launched two consecutive five-
year management plans Phase I of its Excellent Global Corporation Plan in 1996
and Phase II in 2001 with the aim of becoming a truly excellent global
corporation. Through these two five-year management plans, the company
promoted a range of management reforms, thoroughly strengthening its product
competitiveness and financial base. In 1995, while Canon posted just under ¥2.9
trillion in consolidated net sales, Canon had ¥840.0 billion in borrowings and an
interest-bearing debt ratio of 33.6%. The company’s financial position made it
difficult for them to sustain the kind of long-term investment in research and
development that is required in the manufacturing industry.
Given these circumstances, Phase I of the Excellent Global Corporation Plan
pivoted on building a strong financial structure. Along with changing the company
mindset—from partial optimization to total optimization, and from a focus on
sales to a focus on profit—Canon initiated management innovation activities
designed to address common issues concerning all of the company’s
businesses, including production methods, development infrastructure, and
global logistics.
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Under Phase II, we worked to thoroughly bolster product strength across all of
the company’s business operations and affiliates around the world with the goal
of becoming No. 1 in the world in all their major areas of business. As a result,
2005 marked their sixth consecutive year of sales and profit growth. Compared
with 1995, the year before Canon launched their management innovation
activities, net sales increased 1.8 times, net income expanded 6.2 times, and
ROE jumped from 6.5% to 16.8%, showing the significant strides Canon have
made toward becoming a Truly Excellent Global Corporation.
The improvement in profitability in Canon revenue increase over the years. The
Strength on Excellent Global Corporation Plan (Phases I & II) show that how
committed Canon on pursuing the objective on strengthen their Financial
Structure on phase 1 and to become market leader in phase 2.
The average value of the yen for the year was ¥116.43 to the U.S. dollar and
¥146.51 to the euro, representing year-on-year decreases of about 5% against
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the U.S. dollar, and 7% against the euro. Within the camera segment, strong
demand for digital SLR cameras has fueled continued growth with particularly
strong sales for the advanced-amateur-model EOS 30D, launched in the first half
of 2006, and the EOS DIGITAL REBEL XTi, launched in the second half. This, in
turn, led to expanded sales of interchangeable lenses for SLR cameras. Sales of
compact digital cameras also continued to expand steadily with the introduction
of 16 new models in 2006, including six stylish ELPH-series models and 10
PowerShot-series models that cater to a diverse range of shooting styles.
As a result, unit sales of digital cameras for the year increased by more than 20%
from the year-ago period. In the field of digital video camcorders, the launch of
consumer-market HDV models equipped with Canon HD CMOS sensors
contributed to expanded sales. Consequently, camera sales surpassed the
¥1,000.0 billion mark for the first time, achieving total sales of ¥1,041.9 billion
(U.S.$8,755 million), a year-on-year increase of 18.5%. The gross profit ratio for
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the camera segment also rose considerably, boosted by such factors as
substantially increased sales of new products and cost reduction efforts. As a
result, operating profit for the camera segment increased by a substantial 54.7%
year on year to ¥268.7 billion (U.S.$2,258 million).
5.2 Industry Norm Analysis
They word “industry” in industry analysis can mean segment of a larger industry
or the industry itself. As for Canon that manufacturing camera, it could say that it
competes in the digital camera industry for purposes of doing a strategic
analysis, even though that is really a segment of camera industry. The purposed
of doing an industry norm analysis is
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1. The industry dominant economic characteristics
2. Changing of the industry and what causing the industry to change
3. The attractive of the industry
5.2.1 The industry dominant economic characteristics
Competition in the camera industry is intense, with many established market
participants offering similar products. Canon's primary competitors in digital
cameras are Sony Corporation, Fuji Photo Film Co., Ltd., Olympus Optical Co.,
Ltd., Nikon Corporation, Casio Computer Co., Ltd. and Eastman Kodak
Company. Currently, Canon shares the top position with Sony Corporation in unit
sales of compact digital cameras, while Canon is the current leader in the digital
single-lens reflex camera segment. Canon's primary competitors in conventional
film cameras are Nikon Corporation, Konica Minolta Holdings, Inc., Pentax
Corporation, Olympus Optical Co., Ltd., and Fuji Photo Film Co., Ltd.
Hindered by the surging popularity of digital cameras, the conventional film
camera market continued to shrink in fiscal 2003. The introduction of new
models, however, enabled Canon to retain its position firmly atop this market
worldwide. Canon's primary competitors in digital video camcorders are Sony
Corporation, Victor Company of Japan Ltd. and Matsushita Electric Industrial
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Co., Ltd. In fiscal 2003, Canon expanded greatly its overall market share in digital
video camcorders, especially in the United States. Canon believes that
developing cameras with increasingly high resolution and faster image
processing are critical to its ability to remain competitive in the fast-growing
digital camera market segment.
Technological Innovation
A rising trend in the market is to have the digital camera easily network with other
digital devices. Kodak is at this time leading this trend with their new camera that
uses Bluetooth to connect to other devices. Canon does not have any integrated
wireless connectivity in its cameras. It does provide docks and external adapters
for the camera that allow it be connected to other devices. Canon does have a
direct wired connection to certain photo printers, which eliminates the need for a
computer.
In the area of connectivity, Canon is working on its concept called “Canon over
IP”. This concept does not pertain only to camera, but all of Canon’s products.
The idea behind it is to make all their products digital and then allow for easy
networking and accessibility over the internet of those devices. Canon has
finished the first phase of this concept, known as Digital Shift, by which many
devices are converted from analog to digital. Now, Canon is working on the
second phase of the concept known as the Web Shift. After the Web Shift is
complete, consumers will be able to connect their Canon devices via the internet.
There are currently security issues that need to be resolved before it can be
implemented. Eventually, Canon can market this technology with its cameras.
The concept is truly innovative for a camera manufacturer to provide connectivity
to this scale and if Canon can implement this technology in the near future, it will
become an industry leader in camera connectivity.
Entry or Exit of major firm
Sony, the first to market a digital camera in 1981, is making a late entry into the
higher end segment of digital single-lens reflex cameras, targeting 10 percent of
the global market. The competition is more intense in the market for smaller, non-
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SLR digital cameras, where other makers such as Matsushita Electric Industrial
Co., Casio Computer Co. and Olympus Optical Co. do battle. The competition is
more intense in the market for smaller, non-SLR digital cameras, where other
makers such as Matsushita Electric Industrial Co., Casio Computer Co. and
Olympus Optical Co. do battle.
5.2.2 Changing of the industry and what causing the industry to change
The interest in capturing image had evolve to become basis of digital imaging
had begun in early 1980 when Sony had first prototype a camera using a CCD
(charge couple device) to capture and storing the data on a magnetic disk drive.
The breakthrough occurred when Casio released a product, QV-10 in 1995 as it
defined the basic style and function of consumer DSC by adding a LCD monitor
for instant viewing of picture taken. By adding a LCD monitor on the DSC for
instant viewing, it cultivated a whole new customer market segment apart from
the traditional/conventional camera users. DSC also become “communication
device” Conventional film camera manufacture saw this a new growth
opportunity to its stagnated camera business, while consumers electronic firms
considered this an opportunity to expend its product offering linking DSC to their
existing product such as mobile phone. In addition, the DSC industry as a whole
had played a unique roll in the proliferation of the DSC market hence expending
the digital imaging industry.
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Canon Inc.
Curve of Innovation of DSCs
When the DSC market is still emerging, the leading manufacturer were quickly
seeking to lock in user to their own product by defining proprietary format such as
digital image format and data storage media that would force customers to use
the products that the firm could only provide. However they soon realize that
penetrating the mass customers in the direction was difficult as a user were not
interest in only one technology. The customer demand increase over time.
5.2.3 The attractive of the industry
The digital camera business of Japan's Olympus Corp. underscores how making
money in the cut-throat market is getting tougher. Sony Corp. and Canon Inc.
are seen as the strongest players in the $17 billion market, profiting even as
prices fall and growth slows. But most other makers will struggle and some might
be better off exiting. The average price of a compact digital camera will decline
by 15 percent in 2004 and another 15 percent next year. The slowing growth
ahead, forecasting the global market to climb about 40 percent in 2006 to 68.5
million units and a further 22 percent to 84.1 million next year before leveling out
at 84.7 million in 2007.
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Canon Inc.
The spread of cell phones equipped with powerful cameras is also a worry, as
some consumers feel they do not need to buy a separate digital camera. Many
digital camera firms have cut their annual shipment targets in recent weeks, but
Olympus, the worlds third-largest after Sony and Canon, as well as Pentax Corp.
and stood out with their camera divisions.
Even makers with hit products have fallen on hard times. Nikon Corp. is making
money on a new digital SLR, but still expects profits in its camera division to fall
as prices of compact models slide.
"We expect prices to keep falling. But we are shifting our product line-up towards
the high end," (www.nikon.com)
The problem with that strategy is that every digital camera company is doing the
same thing: avoid the low-end of the market where price competition has made
margins razor-thin. Camera makers will also find it increasingly difficult to attract
customers by improving quality. There is a growing consensus among
consumers that three or four megapixels, the measure of how many million
picture elements are captured in a digital snapshot, are enough to produce a
high-quality shot.
With more than 30 players, the market is far more competitive than a few years
ago. Eastman Kodak has emerged as a formidable rival in the United States,
while Matsushita Electric Industrial is gaining traction in Japan.
Kodak's share of the U.S. market rose to 18.2 percent in the first half of calendar
2006 from 15.1 percent in the same period last year, according to research firm
IDC. Olympus, Nikon, Hewlett-Packard, Pentax and Sony all lost share.
"Kodak's advantage is that they are offering cameras at lower prices and
focusing on creating better products. They are putting pressure on everybody
else," (www.kodak.com)
Success depends not only on developing attractive products but also on getting
them to market quickly. Fuji Photo Film slashed its annual digital camera
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shipment target by 18 percent to 7 million units, partly because a shortage of
components kept it from launching a key model in time for the summer bonus
season in Japan. Olympus expects its camera division to lose 18 billion yen
($173 million) in the year to March as it disposes inventory that swelled to 2.6
months at the end of September, up 53 percent year-on-year. Still, the company
is aiming for 20 percent of the global market in three years, up from around 10
percent now.
Olympus can nurse its camera operations back to profit in the next business year
by clearing out inventory and starting from scratch with new models. Olympus
has a relatively weak brand and was late to address two key segments -- the
thin, card-sized model and the reasonably priced digital single lens reflex (SLR)
camera, a high-margin, fast-growing segment dominated by Canon and Nikon.
"Our problems stem from mistakes made in product development and our failure
to correctly read market trends," (www.nikon.com)
5.3 Benchmarking
Benchmarking assesses the competences of an organization against the best
performers in the class. This comparison therefore is not just against
organizations in the same industry, but rather may involve comparisons against
the best performers in any industry, and from any part of the world.
Benchmarking may compare a particular aspect of an organization’s activities
against the best in the class, or may look at overall organizational performance
against the best performers. So, for example, benchmarking may for example,
compare, say, the organisation’s approach to handling customer complaints, or
for example, its approach to after sales service with those organisations which
are the best performers in the selected area. Benchmarking can often be based
on partnerships across industries with a company actively seeking the help of a
company acknowledged to be the best in a particular area of activity. Obviously,
the use of benchmarking is difficult where the best performer is a close
competitor.
5.3.1 Strategic Benchmarking
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Phase III (2006-2010) Becoming a Top 100 Global Company
In 2006, Canon began Phase III of their Excellent Global Corporation Plan.
During Phase III Canon intend to pursue a course of sound growth with new
businesses born of innovation, taking into account ongoing economic
globalization and the worldwide spread of broadband networks, while maintaining
the sound profit structure and financial balance Canon have established over the
past ten years. To accomplish this, Canon plan to promote five essential
strategies in an effort to become a top 100 company globally in terms of such key
business indicators as net sales, net income, equity ratio and market
capitalization.
Canon firmly recognizes that the precarious state of the global environment,
which represents the basis of a sustainable society, is a situation that demands
theirattention. The Kyoto Protocol, the international treaty on climate change, that
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Canon Inc.
went into force in February 2005, centers on the problem of global warming,
which Canon must further strengthen their efforts to address. In response to
environmental problems, Canon has targeted the maximization of resource
efficiency in a way that benefits both environmental conservation and economic
development. These efforts have been directed at the lifecycle of all Canon
products as well as business operations worldwide. In 2003, Canon established
the overriding indicator Factor 2 as their Vision for 2010 in order to put these
ideas into concrete practice. Their global Group companies will strive as one to
achieve their goals by developing advanced, environmentally conscious
technologies and strengthening management systems. In addition, in order to
become a truly excellent global corporation, it is essential that each and every
member of the Canon Group act in accordance with standards and norms
befitting this goal. Canon conducts thorough compliance education for
management and employees worldwide, and, since its founding, has worked to
foster strong, autonomous individuals rooted in Canon’s “Three Selfs” concept.
Canon are also working to strengthen the company’s corporate governance
systems.
Establishing New Production Systems to Sustain International Competitiveness
Canon believes that in order to further strengthen manufacturing, it is necessary
to automate labor-intensive assembly processes using highly productive
automated machinery and robots. Moreover, rapid response to change is
essential to maintaining a competitive edge in the global market. From this
standpoint, Canon is working to develop automated production lines, drawing on
knowledge gained from integrating development, production engineering and
manufacturing technologies. Canon also continue to promote greater efficiency in
procurement activities and the in-house production of key components and
devices.
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Canon Inc.
Canon are making substantial efforts in the area of human resource
development, strengthening their education and training programs to cultivate
trusted, responsible employees, and foster global leaders. At the same time,
Canon is pursuing more equitable human resource policies to nurture strong,
autonomous business professionals.
Identifying New Business Domains and Accumulating Required
Technologies
Canon are researching new fields of technology in their search for next-
generation business areas beyond 2010. In this pursuit, Canon are actively
conducting research from basic to advanced at their leading-edge technology
research center in Tokyo, while also forging partnerships with prominent
research institutions and universities around the world. In the future, Canon plans
to boost R&D expenditure from ¥275.0 billion (8% of net sales) in 2004 to around
¥550.0 billion annually.
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Canon Inc.
Canon signed a comprehensive partnership agreement with the Tokyo Institute
of Technology in August 2005 regarding joint research on advanced materials
and imaging technologies
5.3.2 Competitive Benchmarking
Canon believes that these third-party opinions serve two purposes. First, they
give readers information that helps them judge how well Canon has met their
expectations and that hints at what can be expected from Canon in the future.
Second, the issues raised in these opinions can be used by Canon as reference
for improvements in future sustainability activities and in information disclosure
through this report and other media. These commentators have provided their
opinions on how well this report, with a triple-bottom-line approach improved over
last year, meets their expectations regarding information included in the report,
the quality of performance it conveys, and its usefulness for meaningful
engagement.
Third-Party Opinion from Volker Türk, Wuppertal Institute
In this third consecutive opportunity to provide an external view on Canon’s
sustainability report, Canon have seen with appreciation that the company has
taken its commitment to seeking third-party opinions one step further. This
statement is part of a more in-depth interaction involving a telephone conference
which allowed for the discussion of a variety of issues, some of which Canon will
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raise here. An editorial improvement that has made this report more accessible
without loosing comprehensive data is the disclosure of detailed information on
the web with clear links to them signalised on the printed report. In pursuing the
Kyosei philosophy, Canon has set itself a challenging and exciting agenda in
aiming at becoming a “truly excellent global corporation by pursuing
environmental and social sustainability.” Their environmental goals are clear and
Canon’s performance against these targets is easy to track. Various aspects are
continuously improving and many of the mid-term environmental goals set for
2005 have been achieved; Canon congratulate the company for these
accomplishments. The pursuit of sustainability should be further extended in the
social arena, with statements of priorities and targets on social indicators. For
example, Canon read with interest that Canon provides an “employee-friendly
work environment” and “manages human resources in compliance with the laws
and social
TASK 6
6.1 Strategic Master Planning
Canon SD630 campaign and Tennis Star Maria Sharapova
Canon's most recent campaign featuring tennis superstar Maria Sharapova and
the PowerShot SD630 Digital Elph camera. As part of this campaign, a new
commercial titled "Attraction" first appearances in conjunction with the French
Open. The integrated campaigns include not only television, but also print,
Internet, and retail components that reaffirm Canon's relationship with. Canon
shows consumers that whenever and wherever there are great picture taking
moments, Canon digital cameras are there to capture them.
(http://www.letsgodigital.org)
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Canon Inc.
Canon PowerShot SD630 Campaign - Capital Allocation
Additionally, the print ad will hit newsstands in early June with a two-page spread
appearing in People (6/12 issue), Entertainment Weekly (6/16 issue), In-Touch
(6/19 issue) and Sports Illustrated (6/26 issue). Canon will be launching a micro-
site within the Canon PowerShot website that allows fans to view the "Attraction"
TV spot; get a behind the scenes look at the filming of the commercial including
interviews with Maria and outtakes; as well as a downloadable gallery of images.
Canon is introducing the new campaign to its dealers and retail partners through
a mailing that will include a DVD of the commercial, reprint of the print ad, media
plan and bumper sticker. Canon is also offering retailers the opportunity to tag
the last five seconds of the commercial with their specific store information for
both in-store and local media buys.
Canon SD 630 digital camera campaign – Employed David Letterman
Canon was the sole sponsor of the USA Today bonus section devoted to the
French Open that ran on May 26. The bonus pull-out section highlighted French
Open history, player profiles and player rankings and featured four Canon
advertisements (Window unit on the front page; 1/3-page four-color and 1/2-page
black and white in the center of the section and full-page four-color on the back
page). "Attraction" will begin airing on June 1st around French Open coverage on
NBC, ESPN2, ESPN SportsCenter, ESPNews and The Tennis Channel.
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Canon Inc.
Concurrently, the spot will run nationally on networks such as Comedy Central,
E!, FX, MTV, Spike, TBS, TNT, and VH1 as well in key Canon spot markets on
late night newscasts and late-night programming such as, "Entertainment
Tonight," "Access Hollywood," "The Insider," "extra," "The Tonight Show with Jay
Leno," "Late Show with David Letterman," and "Late Night with Conan O'Brien."
Bargaining
For hired the big star in sport industry is cost a high expenses to Canon. They
have to consideration on the shore up expenses such as hired a professional
photographer, for capturing best quality image while build up a group for
accompany the limelight for each tournament. Canon must spend high expenses
for the commercial. Canon must not only focus on commercial barely, but also
distress on others competitors that compete with the same product. Such as
Sony Corp that now is creating the new era of Cybershot. Canon also must deem
on how long that Maria Sharapova can be the in the top of tennis industry.
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7. http://www.skylinecollege.com/CS-Aditya.htm
8. http://sec.edgar-online.com
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Canon Inc.
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