Business Management Report: Canon and Nikon in India

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Business and Management: A comparison between Canon and Nikon
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Table of Contents
Introduction......................................................................................................................................3
External Environment of the organizations.....................................................................................4
PESTLE analysis.........................................................................................................................4
Summary of PESTLE analysis for Canon...............................................................................5
Summary of PESTLE analysis for Nikon................................................................................6
Porter’s five forces Analysis for India’s Camera manufacturing industry.................................6
Porter’s five forces analysis for Canon Inc............................................................................7
Porter’s five forces analysis for Nikon Inc.............................................................................8
The structure of the organizations...................................................................................................8
Organizational structure of Canon Inc........................................................................................9
Organizational structure of Nikon Inc......................................................................................10
Comparison and Conclusion..........................................................................................................11
References......................................................................................................................................13
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Introduction
This report aims at comparing two companies that operate in the same industry. The
intention is also to draw the contrast between these two companies. The entire analysis will be
carried out with respect to the market of India. The report decides to work on two of the giants of
digital camera manufacturing industry– Canon Inc. and Nikon Inc. Both of the companies have a
large dedicated customer base. Canon Inc. is a multinational organization that has their
headquarters in Japan. Canon is a specialist of producing various optical products especially
digital point and shoot cameras; digital single lens reflex (DSLR), camcorders, photocopy
machines, digital printers, camera lenses, movie cameras and the list goes on. The company has
an operating income of ¥228.8 billion with a yearly revenue collection of ¥3.401 trillion. The net
income of the company is ¥150.6 billion. The other company that is chosen for this report is
another big name in camera manufacturing trade – Nikon Inc. Just like Canon, Nikon is also a
Japan based multinational company involved in producing imaging and optical products. Their
products vary from digital point and shoot cameras to microscopes, camera lenses and even
measurement instruments. Nikon generates an amount of revenue that equates to ¥822.9 billion.
The operating income and the net income of the companies are ¥36.7 billion and ¥22.2
billion respectively. These companies are chosen because they operate in the same market space
globally targeting for the same customers. Their rivalry in the camera production industry is also
famous. Since the intention of this report is to compare and draw contrast between two
companies, Canon and Nikon would be ideal for that purpose. There are many similarities in
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their products and activities. However, the contrast is also evident when their organizational
structure and mode of operations explored deeply.
External Environment of the organizations
This section of the report dedicates itself to analyze the external environment of two of
the chosen companies– Canon Inc. and Nikon Inc. The section will use PESTLE analysis for
evaluating the external environment of the subject companies. The section will then summarize
the findings from Porter’s five forces analysis. Finally the competition matrix summary will be
given in this section.
PESTLE analysis
PESTLE analysis explores six most important aspects of a company’s external environment.
PESTLE derives its name from the initial letters of those six factors. These factors are: Political,
Economic, Social, Technological, Legal and Environmental.
Political
1. The revenue given to the
Indian Government for
acquiring raw materials
has increased.
2. The trade regulations
have been changed
significantly in India in
recent years.
Economical
1. Exchange rate is
fluctuating constantly in
India.
2. The current economic
trends have a significant
impact on the business.
3. Relatively stable
economy after market
Social
1. Demographics of India is
changing rapidly;
migrations are occurring
from neighboring
countries.
2. Increased interest in
Photography in general
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3. Privatization has been
promoted by the
government and pre-
existing socialist
structure is
demolished(Mračková,
2015).
liberalization of 1990s.
4. Increasing GDP
growth(Mračková,
2015).
among population.
3. An unbelievably young
workforce. Age of the
almost two-third of the
population range from
15 to 65(Mračková,
2015).
Technological
1. Risks of electronic data
leakage have increased in
recent years.
2. Development of new
technologies sponsored
by state.
4. Whole nation has 4G
internet connection.
3. Presence of a solid IT
sector(Mračková,
2015).
Legal
1. Strict laws related to
recycling have been
introduced.
2. Minimum wage of labor
has been increased
through legislation in
recent years.
3. Disability discrimination
law is introduced
(Mračková, 2015).
Environmental
1. Quality of air is degraded
to a great extent that is
causing health issues.
2. There are environmental
pressure groups.
3. Regulation on noise
control and waste
management.
(Mračková, 2015)
Summary of PESTLE analysis for Canon
Canon Inc. should consider the increased privation in India as a chance for them to
expand their business as many new industries are given scope to open business in India. The
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changed trade regulations are favor of foreign companies and recent introduction of 100% FDI
(Foreign direct investment) provides Canon a scope for moving their business smooth in the
market of India. Increasing GDP growth implies that the income of an average Indian has
increased. Therefore, they are more likely to invest some portion of their income in the luxuries
commodities as digital cameras are considered as luxurious products for an average Indian. The
stable economy of India will help canon to feel secured in Indian market. It will also allow the
company to maintain a steady growth rate. However, the fluctuating exchange rates might cause
momentary disruptions in their business operations. Canon Inc. is offered with an incredibly
young and efficient workforce in India. The increased interest on photography among young
Indians also facilitates their business. The kind of internet connectivity India has will help Canon
Inc. to market their product throughout the country.
Summary of PESTLE analysis for Nikon
Since Nikon acquires its raw materials from the respective countries they are operating
on, the increased taxation on the raw materials might become a disadvantage for the Nikon Inc.
However, since the exchange rate is fluctuating, especially dropping as the current trends point
out, the relative income of Nikon will increase in near future from India. The stable economy and
steady GDP growth help the Nikon Inc. to sustain in the market of India. The young workforce
and increased interest in photography will also be proven advantageous for Nikon in India. The
condition of Information technology and Internet connectivity will help Nikon to transcend their
traditional form of product supply chain in India and use e-market to catch a larger audience.
(Posselt, Posselt and Berg, 2018).
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Porter’s five forces Analysis for India’s Camera manufacturing industry
Porter’s five forces analysis evaluates five crucial factors that are necessary to assess the
traffic of the market and the intensity of the competitiveness in a particular market. This section
is dedicated to conduct a porter’s five forces analysis in the digital camera market in India.
Factors Evaluation
Intensity of Rivalry High- three major
companies like Canon,
Nikon and Sony is fighting
to grab the camera market
of India. There are several
small companies with an
aggregated customer base
(Sendo, 2018).
Threat of New Entrants Low- there is no
immediate chance of any
new company to enter the
market
Bargaining Power of the customers Moderate- there is several
camera manufacturing
companies in the market of
India. Some of them
provide products at a lower
price than the others.
Bargaining power of the suppliers Moderate- some of the
companies acquire raw
materials from India where
some of the companies
bring it from outside of the
country.
Threat of Substitutes Low- There is no chance of
getting substituted for any
of the companies that
operate in the market of
India( Sendo, 2018).
Porter’s five forces analysis for Canon Inc.
The canon Inc. has a significant has significant competitive advantage in India because of
their reputation. From absolutely novice photographers to the extremely experienced ones prefer
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Canon. However, they have to face tough rivalry from the companies like Nikon and Sony and
Fuji films. One might not see any chance of new entrants entering the market of India with their
products. But existing competitiveness in the market is one of the driving forces for Canon’s
strategy adaptation in the market of India. The customers have options other than Canon Inc. so
they have a moderate bargaining power. However, for Canon, Indian suppliers might not have as
bargaining power as the customers because Canon India imports their raw materials from outside
of the country. Canon Inc. has a firm place in the market of India which cannot be replaced right
now.
Porter’s five forces analysis for Nikon Inc.
The Nikon has to face tough competition in the market of India from the companies’ like
Canon and Sony. However, there is not apparent chance of new organizations entering the
market of India. Barraging power of the customers is moderate as they have many other options
from the companies like Canon, Sony and Fuji films. However, Nikon is well-known for
providing their products at a cheaper price than their prime competitors in India (Sendo, 2018).
The bargaining power of the suppliers is high for the Nikon as they collect their raw materials
from the country they operate. There is no chance of getting substituted by other companies for
Nikon Inc. in India (Rasumov, 2017).
The structure of the organizations
The organizational structure aims at chalk out the activities that are necessary for
attaining the organizational goal (Bishwas and Sushil, 2016). Organizational structure also
divides the roles and responsibilities of various members of the organization and it also
determines the path through which the information will flow through the various layers of the
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organization. This section is dedicated to discuss the organizational structure of t5wo of the
companies that are chosen0 Canon Inc. and Nikon Inc.
Organizational structure of Canon Inc.
The Organizational structure of the Canon is comprised of Broad of directors under
which the president and the CEO comes. The structure is made up of executive committee,
corporate audit center, headquarters and administrative divisions, product group operations,
Marketing subsidiaries and affiliates, manufacturing subsidiaries and affiliates, R&D subsidiaries
and affiliates (Rasumov, 2017). The board of corporate auditors is comprised of managing
strategy committee, new business development committee, and corporate ethics and compliance
committee, internal control committee, Global legal affairs coordination committee and global
marketing promotion committee (Asakura, 2017).
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Organizational structure of Nikon Inc.
The organizational structure if the Nikon Inc. Board of directors under which the operate
Internal Audit department, Corporate planning department, financing and accounting department,
corporate communication and IR department, Affiliates administration department, Business
development headquarters, Information system head quarters and intellectual property
headquarters, Business administration center, core technology center, research and development,
production technology headquarters, precision technology headquarters. Under the precision
equipment company there exist several layers of organizational structures – sales headquarters,
developing headquarters, production headquarters, and LCD equipment divisions. Imaging
Company; marketing headquarters, development headquarters, production headquarters etc.
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Under that stands Instruments Company, customized products divisions and glass divisions
(Turker, 2018).
Comparison and Conclusion
Canon and Nikon both have a strong hold on the market of India. They are very similar in
the product they produce. The price is also very similar. However, the products of Nikon Inc. is
quite low than that of the products of Canon Inc. with similar features. The Canon is proffered
more by the professional photographers for their reputation. It is the primary cause for
comparatively higher revenue generation for the Canon. The Canon collects all their raw
materials from the outside of India while Nikon collects them from inner side of the country.
There are also significant differences in the organizational structure of both of the companies and
their activities. However, it can be said that both of the company stays at very top of the market
and they do face great competition from each other. But Canon is slightly ahead of their
competitors as the current scenario suggests.
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References
Asakura, Y., 2017. BPM Practices in a Japanese Company: A Case Study of Canon Co.
Ltd. Holistic Business Process Management: Theory And Pratice, 14, p.109.
Bishwas, S.K. and Sushil., 2016. LIFE: an integrated view of meta organizational process for
vitality. Journal of Management Development, 35(6), pp.747-764.
Harada, K., Alpine Electronics Inc, 2016. Method for displaying scale for enlargement and
reduction operation, and device therefor. U.S. Patent 9,323,437.]
Mračková, E., Krišťák, Ľ., Kučerka, M., Gaff, M. and Gajtanska, M., 2015. Creation of wood
dust during wood processing: Size analysis, dust separation, and occupational
health. BioResources, 11(1), pp.209-222.
Posselt, T., Posselt, T. and Berg, 2018. Organizational Competence for Servitization. Springer
Fachmedien Wiesbaden.
Rasumov, N., Securityscorecard Inc and Security Scorecard Inc, 2017. Non-intrusive techniques
for discovering and using organizational relationships. U.S. Patent Application 15/046,318.
Sendo, T., 2018. Business Process Standardization of Multinational Enterprises: Two Distinctive
Organizational Models.
Turker, D., 2018. Socially Responsible Production and Operations Management. In Managing
Social Responsibility(pp. 73-98). Springer, Cham.
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