Canon (company)

Website www.canon.com
Canon, Inc. (キヤノン株式会社, Kyanon Kabushiki GaishaTYO: 7751, NYSE: CAJ) is
a Japanese multinational corporation that specializes in imaging and optical products,
including cameras, photocopiers, and computer printers. The headquarters are in Tokyo,
Japan. Originally established in 1930, to create high-quality cameras, Canon has become
a leader in digital imaging and networking, and a major manufacturer of personal and
office printers, copiers, controllers and fax machines, as well as medical, semiconductor,
and broadcasting equipment. Today, Canon’s net annual sales average 4,157 billion
Japanese Yen (US$40.23 billion), and Canon employs almost 130,000 people in more
than 200 companies worldwide.
KEY FOR SUCCESS..
A key to Canon’s success has been innovation and research. Canon, Inc. consistently
devotes approximately 10 percent of its net sales to research and development annually;
in almost 70 years, Canon has been issued 26,528 U.S. patents. Some products developed
from Canon research and patented technology include the laser beam print engine,
Bubble Jet Printing systems, plain-paper copying devices, eye-control focus systems for
cameras and camcorders, and optical image stabilization for video cameras, broadcast
lenses, and binoculars. Canon maintains a commitment to social and environmental
responsibility. It is recognized
for producing some of the world’s most energy-efficient technology, and for its recycling
and sustainability initiatives. The New England-based environmental organization Clean
Air-Cool Planet places Canon at the top of their list of 56 climate-friendly companies.
New products
During the first half of the 1950s, Canon released one new camera after another. The "III"
camera was the first in Japan to have a shutter speed of 1/1000 second, and the "IV"
camera that had a flash rail that enabled a flash unit to be mounted directly on the camera
without a connecting cable. The “IV Sb2” camera, released in March 1954, had even
faster shutter speeds, that could be set in two-fold increments.
Birth of Canon, Inc.
In the 1960s, Canon began to diversify, producing business machines such as electronic
calculators and copying machines. The time had come to alter the public perception that
the company was solely a manufacturer of cameras. With the intention that the company
would become a comprehensive manufacturer of imaging and information processing
equipment, its name was changed to Canon, Inc. on March 1, 1969.
In March 1971, after five years of development, the "F-1," designed exclusively for
professional photographers, was unveiled. It offered multiple functions and a systematic
configuration, and had more than 180 accessories, including high-resolution lenses and
filters. The F-1 proved to be durable, and performed well even under harsh conditions. It
quickly gained wide popularity among professional photographers, and was named the
official 35mm camera for the 1976 Summer Olympics in Montreal, Canada, and the 1980
Winter Olympics in Lake Placid, New York. In 1972, using technology developed for the
F1, the company produced a high-speed motor drive that allowed a camera to shoot 9
frames per second.
The 8mm film cinecameras continued to evolve, incorporating improved zoom lenses,
new film standards, and the XL system. The "Cineprojector T-1" released in April 1972,
achieved the complete synchronization of image and sound, the so-called "lip-synch"
function.[4]

p roducts[edit]
Canon manufactures consumer imaging products including printers, scanners, binoculars,
compact digital cameras, film SLR and digital SLR cameras, lenses, video camcorders
and digital visual solutions.
The "Business Solutions" division offers multi-functional printers, black-and-white and
color office printers, calculators, presenters, large-format printers, scanners, black-and-
white and color production printers, as well as software to support these products.
Lesser known Canon products include medical, optical and broadcast products, including
ophthalmic and x-ray devices, broadcast lenses, semiconductors, display and
semiconductor manufacturing equipment, digital microfilm scanners and handy
terminals.
Digital cameras[edit]
Canon has been manufacturing and distributing digital cameras since 1984, starting with
the RC-701. The RC series was followed by the PowerShot and Digital IXUS series of
digital cameras. Canon also developed the EOS series of digital single-lens reflex
cameras (DSLR) which includes high-end professional models.
Due to consumers switching from compact cameras to smartphones, Canon's Q1 2013
operating profit fell 34 percent year-on-year.[32]
Canon is organised into three principal business segments:
the Office Business Unit (the products of which include copying machines, digital
production printers, large format inkjet printers, laser printers and multi-function
devices);
the Consumer Business Unit (the products of which include broadcasting equipment,
calculators, compact digital cameras, digital SLR cameras, digital video
camcorders, image scanners, interchangeable lenses, inkjet multifunction printers
and single function inkjet printers); and,
the Industry and Others Business Unit (the products of which include computers,
handy terminals, LCD lithography equipment, magnetic heads, medical imaging
equipment, micromotors, ophthalmic equipment and semiconductor lithography
equipment).[35]
SWOT ANALYSIS..
Strength in the SWOT Analysis of Canon :
Strong Product Portfolio: Canon has different consumer offerings based on
a difference in the consumer segments. The product portfolio is diverse and
includes; office MFDs, laser printers, laser MFPs, digital production printers
etc. The diversity in portfolio allows the company to target specific segments
and reduces the risk of overdependence on single segments.
Strong and diversified manufacturing operations: Canon has been
focusing on in-house manufacturing facilities in its various markets around
the globe. Besides Japan, Canon has manufacturing facilities in 18 different
countries. This allows them to improve quality and reduce costs. This also
allows them efficiency in operations.
Strong R&D: Canon has been one of the companies looking for continuous
innovation and evolution which is supported by its strong R&D facilities
which allow it to develop disruptive products in all its segments and
categories. The strong R&D helped in building strong Intellectual Property
as Canon has received various patents on its innovations.
Loyal customers: Canon enjoys a rich history of effective marketing
campaigns and superior performance which has created a strong brand
image for the company. This has also helped Canon in garnering a loyal base
of customers.
Fantastic brand valuation: Canon is valued at a whopping $40 billion
which makes the brand one of the top 500 most valued brands in the world.
Weakness in the SWOT Analysis of Canon :
Dependence on HP: HP is one of the biggest clients of Canon’s laser
printers, generating about 18 percent of consolidated sales of Canon.
Although this is a major strength of canon, the phrase “your best friend is
your worst enemy” comes to mind. Termination of this contract can affect
the bottom-line of Canon.
Defects in products affect image: Canon, which is known for superior
performance has also faced controversies in terms of product defects. For
instance, Canon acknowledged defects in Rebel T6s and T6I DSLRs in
2015. This affects the brand image and trust in the company.
Brand only recognised by Imaging Products: Canon has been popular
worldwide for its imaging products like cameras etc. but its other products
such as projectors are not so popular and hence there is a lack of recognition
and awareness.
Opportunity in the SWOT Analysis of Canon :
Growth in Universal Consumer Electronics market: The consumer
electronics market is expected to grow at a CAGR of more than 2.5 percent
during 2015-2020. This is primarily driven by emerging market and increase
in household income levels.
Growth in Digital printing market: The market for digital printing is
expected to grow from $130 bn in 2013 to $290 bn 2020. Also, inkjet is
going to be the major contributor to the segment. This provides a positive
outlook for Canon in the future.
Growing medical device market: There is a continuous growth in the
medical device business in the world and this helps the company’s strategy
to grow in the medical device industry. This will help the company to
expand its product portfolio and market share.
Threat in the SWOT Analysis of Canon :
Shrinking Camera Industry: The Camera Industry is shrinking due to the
evolution of mobile phone cameras and has affected sales of Canon’s camera
division.
Stringent Regulations in medical devices industry: The medical devices
industry is susceptible to stringent and different regulations in different
countries. This increases the compliance costs and affects profitability.
Rapid changes in Technology: The company has to maintain its speed with
the changes in technology. This requires a huge investment in R&D and
increases costs for Canon.
SWOT analysis is a strategic planning tool that can be used by Canon
managers to do a situational analysis of the organization . It is a useful
technique to analyze the present Strengths (S), Weakness (W), Opportunities
(O) & Threats (T) Canon is facing in its current business environment.
The Canon is one of the leading organizatations in its industry. Canon
maintains its dominant position in market by carefully analyzing and
reviewing the SWOT analysis. SWOT analysis an immensenly interactive
process and requires effective coordination among various departments
within the organization such as – marketing, finance, operations,
management information systems and strategic planning.

The SWOT Analysis framework helps an organization to identify the

internal strategic factors such as -strengths and weaknesses, & external
strategic factors such as - opportunities and threats. It leads to a 2X2 matrix
– also known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis /

Matrix enables the managers of the Canon to develop four types of
strategies:
·0 SO (strengths-opportunities) Strategies
·1 WO (weaknesses-opportunities) Strategies
·2 ST (strengths-threats) Strategies
·3 WT (weaknesses-threats) Strategies
The primary purpose of SWOT matrix is to identify the strategies that a
company can use to exploit external opportunities, counter threats, and build
on & protect Canon strengths, and eradicate its weaknesses.
Step by Step Guide to Canon SWOT Analysis
Strengths of Canon – Internal Strategic Factors

As one of the leading firms in its industry, Canon has numerous strengths
that enable it to thrive in the market place. These strengths not only help it to
protect the market share in existing markets but also help in penetrating new
markets. Based on Fern Fort University extensive research – some of the
strengths of Canon are –
·4 Successful track record of integrating complimentary firms through
mergers & acquisition. It has successfully integrated number of
technology companies in the past few years to streamline its
operations and to build a reliable supply chain.
·5 Strong Free Cash Flow – Canon has strong free cash flows that
provide resources in the hand of the company to expand into new
projects.
·6 Strong distribution network – Over the years Canon has built a
reliable distribution network that can reach majority of its potential
market.
·7 Strong Brand Portfolio – Over the years Canon has invested in
building a strong brand portfolio. The SWOT analysis of Canon just
underlines this fact. This brand portfolio can be extremely useful if the
organization wants to expand into new product categories.
·8 Highly skilled workforce through successful training and learning
programs. Canon is investing huge resources in training and
 development of its employees resulting in a workforce that is not only
highly skilled but also motivated to achieve more.
·9 Good Returns on Capital Expenditure – Canon is relatively successful
at execution of new projects and generated good returns on capital
expenditure by building new revenue streams.
·10 Superb Performance in New Markets – Canon has built expertise at
entering new markets and making success of them. The expansion has
helped the organization to build new revenue stream and diversify the
economic cycle risk in the markets it operates in.
·11 Reliable suppliers – It has a strong base of reliable supplier of raw
material thus enabling the company to overcome any supply chain
bottlenecks.

Weakness of Canon – Internal Strategic Factors

Weakness are the areas where Canon can improve upon. Strategy is about
making choices and weakness are the areas where a company can improve
using SWOT analysis and build on its competitive advantage and strategic
positioning.
·12 High attrition rate in work force – compare to other organizations in
the industry Canon has a higher attrition rate and have to spend a lot
more compare to its competitors on training and development of its
employees.
·13 There are gaps in the product range sold by the company. This lack of
choice can give a new competitor a foothold in the market.
·14 The profitability ratio and Net Contribution % of Canon are below the
industry average.
·15 Limited success outside core business – Even though Canon is one of
the leading organizations in its industry it has faced challenges in
moving to other product segments with its present culture.
·16 Need more investment in new technologies. Given the scale of
expansion and different geographies the company is planning to
expand into, Canon needs to put more money in technology to
integrate the processes across the board. Right now the investment in
technologies is not at par with the vision of the company.
·17 Investment in Research and Development is below the fastest growing
 players in the industry. Even though Canon is spending above the
industry average on Research and Development, it has not been able
to compete with the leading players in the industry in terms of
innovation. It has come across as a mature firm looking forward to
bring out products based on tested features in the market.
·18 The marketing of the products left a lot to be desired. Even though the
product is a success in terms of sale but its positioning and unique
selling proposition is not clearly defined which can lead to the attacks
in this segment from the competitors.
Opportunities for Canon – External Strategic Factors
·19 Organization’s core competencies can be a success in similar other
products field. A comparative example could be - GE healthcare
research helped it in developing better Oil drilling machines.
·20 Decreasing cost of transportation because of lower shipping prices can
also bring down the cost of Canon’s products thus providing an
opportunity to the company - either to boost its profitability or pass on
the benefits to the customers to gain market share.
·21 The new technology provides an opportunity to Canon to practices
differentiated pricing strategy in the new market. It will enable the
firm to maintain its loyal customers with great service and lure new
customers through other value oriented propositions.
·22 Lower inflation rate – The low inflation rate bring more stability in
the market, enable credit at lower interest rate to the customers of
Canon.
·23 New environmental policies – The new opportunities will create a
level playing field for all the players in the industry. It represent a
great opportunity for Canon to drive home its advantage in new
technology and gain market share in the new product category.
·24 Stable free cash flow provides opportunities to invest in adjacent
product segments. With more cash in bank the company can invest in
new technologies as well as in new products segments. This should
open a window of opportunity for Canon in other product categories.
·25 Economic uptick and increase in customer spending, after years of
recession and slow growth rate in the industry, is an opportunity for
Canon to capture new customers and increase its market share.
·26 New trends in the consumer behavior can open up new market for the
Canon . It provides a great opportunity for the organization to build
 new revenue streams and diversify into new product categories too.
Threats Canon Facing - External Strategic Factors
·27 The demand of the highly profitable products is seasonal in nature and
any unlikely event during the peak season may impact the profitability
of the company in short to medium term.
·28 Imitation of the counterfeit and low quality product is also a threat to
Canon’s product especially in the emerging markets and low income
markets.
·29 As the company is operating in numerous countries it is exposed to
currency fluctuations especially given the volatile political climate in
number of markets across the world.
·30 New environment regulations under Paris agreement (2016) could be
a threat to certain existing product categories .
·31 Rising raw material can pose a threat to the Canon profitability.
·32 Rising pay level especially movements such as $15 an hour and
increasing prices in the China can lead to serious pressure on
profitability of Canon
·33 Intense competition – Stable profitability has increased the number of
players in the industry over last two years which has put downward
pressure on not only profitability but also on overall sales.
·34 Growing strengths of local distributors also presents a threat in some
markets as the competition is paying higher margins to the local
distributors.
Limitations of SWOT Analysis for Canon
Although the SWOT analysis is widely used as a strategic planning tool, the
analysis does have its share of limitations.
·35 Certain capabilities or factors of an organization can be both a
strength and weakness at the same time. This is one of the major
limitations of SWOT analysis . For example changing environmental
regulations can be both a threat to company it can also be an
opportunity in a sense that it will enable the company to be on a level
playing field or at advantage to competitors if it able to develop the
products faster than the competitors.
·36 SWOT does not show how to achieve a competitive advantage, so it
must not be an end in itself.
 ·37 The matrix is only a starting point for a discussion on how proposed
strategies could be implemented. It provided an evaluation window
but not an implementation plan based on strategic competitiveness of
Canon
·38 SWOT is a static assessment - analysis of status quo with few
prospective changes. As circumstances, capabilities, threats, and
strategies change, the dynamics of a competitive environment may not
be revealed in a single matrix.
·39 SWOT analysis may lead the firm to overemphasize a single internal
or external factor in formulating strategies. There are
interrelationships among the key internal and external factors that
SWOT does not reveal that may be important in devising strategies.
Weighted SWOT Analysis of Canon
In light of the above mentioned limitations of the SWOT analysis / matrix,
corporate managers decided to provide weightage to each internal strength
and weakness of the firm. Organizations also assess the likelihood of events
taking place in the coming future and how strong their impact could be on
company's performance.

This method is called Weighted SWOT analysis. It is better than doing

simplistic SWOT analysis because with Weighted SWOT Analysis Canon
managers can focus on the most critical factors and discount the non-
important one. It also solves the long list problem where organizations ends
up making a long list but none of the factors deemed too critical.
Limitation of Weighted SWOT analysis of Canon
This approach also suffers from one major drawback - it focus on individual
importance of factor rather than how they are collectively important and
impact the business holistically.