Free Custom «Global Business Solution Report» Essay Paper

Canon Inc. is an electronics company that was founded in 1938 in Japan. Today, the company makes computer peripherals such as printers, scanners and fax machines in addition to its original camera business. Its industrial segment produces different products that are meant for diverse applications such as television broadcast lenses and devices for eye examinations. Today, the company’s camera business produces camcorders, digital cameras, lenses, binoculars and LCD projectors. Canon Inc. generates about three quarters of all its revenues outside Japan. Particularly, it also continues to emphasize its marketing efforts and product development in North America.

Customer Analysis

In the North American markets, the company is represented by Canon U.S. A. Inc, Canon Latin America, Inc., and Canon Canada, Inc. The European market is fed by Canon Europa N.V. while the Asian markets are catered for by Canon Hongkong Co., Ltd., Canon (China) Co., Ltd., Canon Singapore Pte. Ltd and Canon Marketing (Taiwan) Co. Ltd. The Oceania and Japanese markets are catered for by Canon Australia Pty. Ltd. and Canon Marketing Japan Inc. respectively.

 

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In Canada, Canon is a highly respected market leader and it has been supplying products to this country since its establishment in 1973, when Canon Canada, Inc. was established. The company supplies both consumer imaging and business information systems equipment. The product line includes networked office systems, facsimile machines, and copiers among others.

In the U.S. market, Canon’s products fall into three main categories: office/production products, consumer products and industrial products. Office products include facsimile machine and copiers. Industrial products include medical, broadcast, semiconductor and technical products. The consumer products include items such as digital cameras, camcorders and binoculars.

A wide range of products are available in the European market, thanks to Canon Europa N.V., a subsidiary company of Canon, Inc. these include cameras, camcorders, printers, office print and copy solutions and scanners. Others include facsimile machines, binoculars. Personal copiers, multifunctional printers, document imaging systems, large format solutions, professional print and copy solutions. Other lesser known products from this market include visual communication cameras, projectors and calculators. This market also produces industrial products such as handy terminal solutions, medical systems and semiconductor equipment.

In Asia, Korea, Japan, South and South East Asia, Canon, Inc. has established a strong market presence as well. Some of the countries where the company’s products are dominant include Malaysia, Korea, Singapore, Thailand, Taiwan and Vietnam and Philippines. The subsidiary companies involved manufacture consumer and industrial products.

Market segmentation

In the United States, Canon has already dominated the copier market. The company has also been a dominant player in the supply of personal scanners. Additionally, Canon maintains a position of leadership in the provision of imaging solutions in the USA and Europe. In 2002, Canon was in control of 22.7% of the U.S digital copier segment. Overall, the company was in possession of 35.3% of the U.S market during the same year.

Despite the fact that Canon continues to face stiff competition and a business economy that is always in flux, the company’s brand is always in high demand. This has been made possible through increase in product offerings, development of new technologies, and persistent emphasis on customer service (Gomes-Casseres, 2007).

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Major customer related issues

Every electronics company faces many problems involving the products being sold. Some the products may be faulty right from the time they leave the production line. At other times, the problems could be relating to inappropriate design standards. Canon, Inc. has had its share of such customer-related problems.

Canon printers are often praised by customers as the best in the market today. They are often rated highly compared to those of competitors. Both price and quality are important factors that customers consider when buying Canon products. Generally, the image of the company is a positive one.

In 2006, two major Canon digital camera problems were reported: one was a lens issue and the other was an image sensor defect. Most of the company’s models were noted to have this defect. Users of Canon point-and-shoots in various product lines have been complaining of this problem for a long time.  This problem, commonly known as the “E 18” controversy, is named after an error message displayed whenever lens fail to retract or extend. Meanwhile, when the problem first surfaced, Canon did not report any defect with any brand of cameras. Typically, the company does not repair any affected cameras that are out of warranty.

Competitor Analysis: major competitors

Canon’s chief competitors are Ricoh Ltd. and Xerox Corp. The competition between Canon and Xerox is fiercest in the U.S market, particularly in the sale of copying and multifunctional imaging equipment. In 1998, Canon USA, Inc. announced plans to introduce high-volume copying, high volume digital multifunction imaging systems, high speed multifunction color copying and branded laser beam printers into the U.S. market. The company was hoping to make hardware sales worth $3.6 billion. In the way, Canon was literally setting up the scene for a fierce competition with Xerox, which had already established a market here.

In 2006, Canon Inc. announced plans to start producing commercial printers with projections of claiming 20% of the world’s trade volume in five years’ time. The printers, the type of which Xerox also produces, are often used by printing companies, and facilitate data processing from PCs without photo engraving.

Canon Inc. also competes with Ricoh Ltd, a company that manufactures digital duplicators, color photocopiers. Ricoh was the first company to introduce color photocopiers into the market; therefore, it has a competitive niche in this aspect (Henderson, 2002). However, the company does not pose as much competition to Canon as Xerox.

Major competitor related issues

The main problem with competition in printer and photocopier industry is that it has almost reached a point of saturation (Ouchi, 2008). Competition continues to grow while the market continues to dwindle. Large players such as Canon, Xerox and Ricoh are looking for new markets where they can implement their new technologies. The problem is compounded by the fact that many customers perceive photocopiers to be homogenous, meaning that competitive advantage does not come by easily (Porter & Millar, 2008).

Although new entrants are not a major concern in this industry, competition tends to be offset all the time by the threat of substitutes. New ways of substituting imaging and copying solutions are being used all the time. They range from the archaic way of writing something down to using hyped ‘all in one’ electronic imaging systems. Additionally, competitors tend to launch new approaches to global competition, for example, Ricoh’s Plan.

Recently, Canon has focus on efforts to produce and market-wide and document management printers, copiers, scanners and faxes. This is the first step towards the introduction of direct competition with Xerox. Canon hopes to replicate the successful competitive encounter in 1998 in the US market. This competitor strategy catapulted Canon into the position of U.S’s most competitive producer of high-speed digital copiers.