Strategic Analysis of Canon - Course: Sm3027 Essay

1. Canon's strategies have been very effective in balancing growth of market share with profitability, with the firm controlling a significant share of focused niche markets in the imaging industry (see Exhibit 1). Cannon's strategic challenges involved identifying the markets in which it intended to compete and developing competitive advantages to allow the firm to balance market share and profitability growth within these markets. In the late 1960s, the firm initially adopted a business-level strategic vision of focusing on the small photocopier niche that was underserved by its major competitors using a technology that was totally different than the existing technologies used by competitors. The strategic vision provided direction for the firm's strategic planning process. At the same time, the corporate planning process was flexible enough to allow Cannon to recognise and exploit opportunities in related markets over the long run, with the firm eventually adopting a corporate-level strategy of horizontal diversification based on the evolution of its core competencies. Over the long run, the development and application of Cannon's strategy has made the firm a leader in the imaging industry group.

The strategic planning process at Cannon appears to have relied on a SWOT analysis to identify opportunities and threats, and the internal strengths and weaknesses of the firm that would allow it take advantage of the opportunities and avoid the threats (see Exhibit 2). The strategic planning process at the business or centre level at Canon established the general planning procedure of identifying markets that were likely to grow in the future and entering the market if the firm possessed or could acquire core competencies sufficient to obtain a competitive advantage in the market. These markets represented opportunities. At the same time, the markets were served by existing firms, which constituted a threat to Canon because of competitive rivalry. In effect, Canon...