Canon strategic analysis case study (resource based view)

1937 Words Mar 26th, 2004 8 Pages
CANON: COMPETING ON CAPABILITIES

This report examines the competitive strategy that enabled the "camera company from Japan"1 not only to break down the monopoly enjoyed by Xerox in the copier business in the 1970s but also to grow into a highly diversified, multi-product and multinational premier company.

Specifically, the report considers (1) the competitive strategy of Canon (2) the major resources and capabilities of Canon (3) management of the development and transfer of capabilities throughout the organisation (4) Canon's strategic perspective (5) is Canon successful? (6) conclusion and key learning points

Competitive strategy

The dominant generic competitive strategy adopted by Canon is differentiation. The company deployed its
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These relationships were not only sources of required technology, they also served as strategic tool for market development for the company's products and for mitigating foreign trade tensions.

(v) High quality, low cost manufacturing: Canon has a philosophy of producing quality products at the lowest cost. Strong emphasis is placed on inventory management, waste reduction, material and production planning. Continuous improvement in productivity was achieved through automation and innovative process improvement. The commonality of parts between adjacent copier models also contributed to low cost of manufacturing due to standardisation. High quality, low cost manufacturing combined with premium prices provide Canon with an opportunity to earn good margins.

(vi) Highly motivated work-force: employees are held in high regard at Canon. This was applicable to both business unit managers as well as production line workers. The business unit managers were empowered to act as surrogate CEO of their units and to make quick business decisions. A number of initiatives were implemented to motivate production workers. These include the "stop and fix it" programme (which empowers any employee to stop the production line if he or she believes there is a quality problem), responsibility for maintenance of own machine and on-line feedback on quality and production targets. The level of motivation was reflected in the suggestion programme implemented by the company
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