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COMPANY RESEARCH 1IntroductionCanon headquarters is situated in Tokyo, Japan. The company is a leader in providing innovativeimaging solutions for consumers and businesses. The predecessor of canon is Precision OpticalIndustry Ltd., which was founded in 1937. Canon manufactures and develops broad range ofproducts such as cameras, printers, copying machines, optical products and various otherproducts for a variety of industrial and individual customers. It a well-established brand and istrusted by families, individuals, and business in different sectors. A philosophy which Canonfollows for its operations come from the word "Kyosei" which means living and workingtogether for the good of common. All the operations of the company are based on thisphilosophy, from providing the consumer with the wide range of products to development ofimperishable manufacturing methods. Canon main aim is to become one of the top 100 globalcompanies. Diversification and expansion in new areas like network cameras, medical imaging,mixed reality, professional cinematography, expansion via mergers and acquisitions will playimportant role in becoming a top global company. Canon has various competitors like Xerox,Hewlett Packard, Toshiba, Sony, Nikon and much more. Net sales of the company havedecreased by $55.1 billion because the volume of sales of digital cameras has decreased.Operating income has increased by $8.4 billion, which was leveraged by sales of improvedproduct mix and a decrease in expense. It has approx. 194,000 employees within its subsidiariesin Japan, America and Asia and R&D companies based in US, Asia, Australia and Europe(Desmond, E.W., 1998).Application of Porters Five Force ModelMichael Porter 5 Force Model helps in analyzing the competition of a firm in industry. Thosefive forces are competitors in industry, the threat of substitute products, bargaining power of
COMPANY RESEARCH 2buyers, bargaining power of suppliers and threat of new entrants. Industry Rivalry: Market forthe digital camera is a saturated market and have slow growth. Industry is capital intensive,having automatic machinery for building a camera. Competition is very high and aggressive.Products developed by canon 450D is similar to Nikon D90. Most of the profits in this industryare owned by Canon, Sony and Nikon and other competitors like Kodak, Panasonic, Samsung,and Casio. The rivalry has been intensified by advertising and exposure for building brandequity. The threat of New Entrants: Existing firms have very good experience and is led by thecapacity to innovate. Canon provides its customers with high-quality assurance. Switching costfor buyers is very high, and therefore new entrants might be ignored. Firms in this industry areless likely to get affected by the entry of new firms, as they strong customer base, and customersare quality and brand conscious. The uncertainty of success in the industry makes entry of newfirms is less likely. Bargaining Power of Buyers: Bargaining power of the consumer is very lowas they are very quality conscious and will not go for less price by compromising quality. DSLRconsumers using Canon lenses is less likely to switch to another brand like Olympus or Nikon.Canon is an established brand and cameras of the canon are important for consumers, thushaving low bargaining power. Bargaining Power of Suppliers: Suppliers who want to supply toCanon should keep up to Canon's "Global Canon Green Procurement Standards," which is in linewith its philosophy emphasizing good of community and environment. Suppliers have to play byCanon rules and should meet quality standards. The company itself is having full in-housemanufacturing of materials, equipment, and tools. Thus supplier has very less bargaining power.The threat of Substitute Products: Substitute products like smartphones with enhanced camerafunctions, does not have the ability to substitute camera with high image quality as compared tomobile phones. They can meet the only basic need of capturing and image, but cannot function

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