Canon Case Study Analysis

2231 WordsFeb 24, 20159 Pages
Drawing on the Resources and Capabilities literature, evaluate whether and how Canon generates sustainable competitive advantage. Canon is an exceptional case of a firm that connected its resources and capabilities to the strategic objective in order to sustain competitive advantage. Via a dominant strategy of innovation, Canon provoked a generation of technological, manufacturing and marketing competencies. ‘A company’s resources and capabilities are increasingly considered as [a] fundamental source of competitive advantage’ (Abubakar, H.L. (2011) P.1), this process has enabled Canon to become a market leader. The focus of this essay will evaluate how Canon became so successful. Canon utilised technological capabilities through research and development (R&D), which was strongly decentralised; generated from financial and human resources (HR). Using Grant’s Resource Based View (RBV) (1998), we can analyse how Canon formed its resources into competencies. Grant’s RBV emphasises the importance of linking resources which add value to create capabilities, ‘capabilities are the main source of competitive advantage’ (Grant, R.M. (1991) p119). Canon used their financial resource to expand R&D, ‘R&D increased to 6% of sales to 9% in 1985’ (C1053). HR converted the knowledge Canon acquired into innovative technology, but also designs based around previous technology. Canon connected its primary resources to the R&D capability, generating knowledge throughout the company establishing innovative products that competition couldn’t compete with. Grant emphasises that resources that create internal specialist knowledge such as R&D, are the main source of establishing core competencies. Canon protected the research they gained with patents, allowing them to ‘maintain leadership’ (C1044), formulating sustainable competitive advantage. R&D made

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