Canon Inc - Consumer Electronics - Japan
Canon Inc
Strategic Direction
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Canon aims to strengthen
existing business, expand operations through diversification as well as
identify next generation products to assure higher sales beyond 2010, while
maintaining a high profit margin structure. Improving future performance would
mean joining the ranks of the global top 100 companies by 2010, which would
translate to ¥6,000 billion and net income to sales ration of 10% or more.
·
Canon wants to head towards the
accomplishment of the Excellent Global Corporation Plan which focused on higher
profits, offering attractive and timely products and effectively reducing
costs. It pursues key innovation activities, such as strengthening supply chain
management, increasing in-house production, enhancing automated production and
improving the efficiency procurement process in order to reduce costs.
·
While experiencing favourable
consumer market demands in the domestic market, Canon’s main challenge stems
from the international setbacks which include the increase in prices of raw materials
and fuel costs and the slowdown in the US economy. Demands in Europe and China
turned our brisk. Canon has lost its battle to be ranked in the overall
consumer electronics market due to its focus on portable electronic products.
Key Facts
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Full name
of company:
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Canon
Corporation
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Address:
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30-2,
Shimomaruko 3-chome, Ota, Tokyo
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Tel:
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(033)
758-2111
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Fax:
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0354829680302
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www:
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http://www.canon.com/
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Activities:
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The Company
is a manufacturer of digital multifunction devices plain paper copying
machines, laser beam printers, inkjet printers, cameras and steppers.
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Source: 2008 Canon Corporation, 2008
Euromonitor from trade press
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2005
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2006
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2007
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Net sales
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¥3,754,191
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¥4,156,759
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¥4,481,346
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Net profit
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384,096
|
707,033
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756,673
|
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Number of
employees
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115,583
|
118,99
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131,352
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Source: 2005-2007 Canon Corporation annual
report, 2008 Euromonitor estimates
Note: Consolidated data (domestic and
international operations) so, may not reflect the domestic standing of the
company in the CE market
Company Background
·
Canon Corporation is a Japanese
multinational corporation that specialises in imaging and optical products,
including cameras, photocopiers and computer printers.
·
Although Canon is active in the
market for cameras and computer printers, it is also involved in other markets
such as analogue and digital copiers, and it has a line of digital
multifunction devices.
·
In 2004, Canon Corp ventured to
the digital displays market by teaming up with Toshiba to develop and
manufacture flat panel televisions based on SED, a new type of display
technology. The joint venture company was called SED Inc.
·
In January 2007, Canon bought
Toshiba's share of the joint venture following litigation from
Nano-Proprietary, Inc, which claimed Canon breached a license agreement by
sharing technology licensed to Canon with the joint venture company.
·
Canon acquired majority
ownership of Tokki Corporation and expects the latter’s advanced technology
related to production equipment for organic light-emitting diode (OLED)
displays to contribute considerably toward the development of Canon products.
The company also reached an agreement with Hitachi Ltd to acquire shares with
the aims of advancing display technologies, ensuring stable procurement of LCD
panels used in Canon products, accelerating its OLED display development and
facilitating product development.
·
Recognising the importance of
the workforce as key to the success of the efficient production and operation
of the company, Canon Corp has increased its labour force. This is also part of
the on-going drive of the company towards the engagement of other potential
market segments, which need the skills of new employees.
Production
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Canon Corp has 37 manufacturing
companies both in Japan and overseas and supplies the local market from within
country. The company maintains a non-disclosure policy, however, on its
production data.
·
Canon increased it production
to meet growing demand for its products worldwide and put considerable amount
of weight on the expansion of its production facilities based on a long-term
perspective. In Vietnam, Canon completed construction of its second inkjet printer
plant in 2007 and commenced full-scale operations in 2008.
·
It completed a construction of
a facility for inkjet cartridge production at Oita Canon Materials Inc in Japan
in 2007. Canon raised the production capacity of interchangeable single lens reflex
(SLR).
·
It has taken steps to expand
production capacity for inkjet printers. Canon made plans to build a new plant
in Hita, Oita in 2008. At Canon Precision Inc. in Aomori, Japan, the Company
began construction in 2007 of a plant to manufacture toner cartridges for
printers and copying machines. Commencing operations in 2008, the plant
incorporates automated assembly lines to significantly raise productivity
levels.
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Canon exports to other regional
markets such as North America, Europe, Latin America, Southeast Asia and Russia
but maintains export preferences from region to region. Sales of medium- and
high-grade MFPs stayed on course in Japan and Australia, with robust results in
the Americas, Europe and Asia for SFPs and low-end MF. In laser beam printers
(LBPs), Canon aggressively exported to North America, Europe, China, India, the
Middle East, Russia and Eastern Europe,
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Canon also is taking major
steps to bolster in-house production of Complementary Metal Oxide Semiconductor
(CMOS) sensors, a key component in digital cameras and digital video
camcorders. Specifically, Canon will establish a new facility for CMOS
development through production in Kawasaki, Japan.
Competitive Positioning
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Canon is poised towards
expanding digital single lens reflex (SLR) camera market, as well as the
compact digital camera, copy machine and laser beam printer (LBP) markets. It
markets a wide product portfolio and positions itself in the high end of
market.
·
The company is strengthening
its activities in the development of such key components and devices as CMOS
sensors and DigitalImagingIC (DIGIC) imaging processors for digital cameras and
IR controllers for multifunction devices (MFDs). Further enhancing and
accelerating development, the company successfully incorporated such key
components and devices into new products throughout 2007.
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Canon ranked 9th in the overall
consumer electronics market in Japan in 2007, reflecting 1.9% of the total
volume demands.
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By leveraging Canon’s strengths
in advanced technologies for optics, sensing, image processing, simulation and
software, the company was able to increase shares of digital cameras, buoyed by
the introduction of beginner and mid-level models.
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Canon successfully increased
its market share in compact digital cameras as well as a sound growth in
digital video cameras. In 2007, the market for inkjet printers continued to
shift from single-function printers (SFPs) to multifunction printers (MFPs). As
a result, MFP sales increased primarily on a unit basis, while the SFP market
contracted in excess of expectations. Against this backdrop, unit sales of
Canon’s inkjet printers increased slightly
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As an innovator in the market,
Canon Corp is accumulating technologies and conducting highly advanced research
internally or in collaboration with leading universities and institutes. In
2007 Canon identified medical imaging and robotics as new business domains and
made advanced collaborative research with Kyoto University in Japan with the
aim of developing innovative diagnostic imaging devices.
·
Canon is interested in both
niche positions and market leadership. In 2007, Canon relies on the innovative
concept of cross-media imaging and a sophisticated combination of input and
output devices in order to increase synergies among Canon’s products and raise
their added value.
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By increasing research and
development expenditure by ¥60 billion from the previous fiscal year to ¥368.3
billion, accounting for 8.2% of net sales, Canon hopes to improve technological
advancements. It also develops and promotes “cross-media imaging”, a concept
that, through interactive connectivity, enables advanced synergies between such
input and output devices such as cameras, printers and displays. Cross-media
imaging allows users to communicate and reproduce a variety of images and
information
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Sector
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Value share
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Rank
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Portable
consumer electronics
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3.0
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9
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Source: 2008 Euromonitor International
Note: Shares for in-home and in-car
were comparably negligible compared to competing brands
