Canon's digital dominance

Having long dominated the camera and copier market, Canon, the $23 billion dollar Japanese company, has recently launched a major push for digitalization of its products. Right from the camera to printers and copiers, almost all the products manufactured by Canon are now being digitalized. Canon is also focusing on increasing productivity and profitability of all its product lines.

Canon is also focusing on emerging markets like the Middle East to drive its future growth. It recently opened its new regional headquarters in Dubai Internet City.

Q. What is your strategy for emerging markets like the Middle East?

A. Canon had a liaison office in Dubai since 1998. Now, we have set up various regional offices across the world in order to service emerging markets. Finland for Russia, South Africa for sub Saharan Africa, Vienna for East and Central Europe and here in Dubai for the middle east. Through this we hope to expand our activities in these markets. I am not saying whether we are doing this quick enough, we want to accelerate our regional activities since the market is expanding so fast. The middle east office will serve a market of over 220 million including the large markets of Egypt, Iran and Saudi Arabia. The revenues from this region have grown by 40 percent last year and the year before it grew at 60 percent. So in two yearrs we have grown 100 percent. This growth rate should accelerate even more and we have to grow faster than the market.

Q. What are you focusing on?

A. We invested in this market a bit late, so we have to grow faster. But even otherwise it is a good time for us to expand our marketshare since Canon has been offering a lot of digital products like cameras. A few years ago we were focused on the analog products since we thought that it was what people wanted. Then came this sudden change, so we are now 100 percent shifting our efforts to digitalization and our camera is top quality. Some years ago we were number 5 or 10, but now in many countries we are number one and also we were a bit late in copiers but we have already changed the lineup there also and have totally new digital products. So we are also targeting number one position in that line also, so it is a good time to grow faster.

Q. Where is your fastest growth coming from?

A. The fastest growth is in digital cameras. Even in Europe we have a 60 percent growth in this market and 70 percent the year before, we think it will keep this pace for some years. For the entire market and especially in this territory, compared to others, we are satisfied with our printer activity and scanner. We have been very successful in these categories and now our new digital camera can be directly connected to printers and that should boost our sales even further.

Q. Who are you competing with in the camera market?

A. We have three kinds of competition in digital cameras. The traditional camera makers like Nikon and Minolta and then there are companies like Sony and also paper companies like Kodak or Fuji. They are doing their best for survival and I think only five or six of the current competitors will survive. We will defintiely be very strong in the market as we have made ourselves clearly the digital market leaders with the Ixus model.

Q. Since you were late in the digital market, has it made your task more difficult?

A. It was not a matter of technological challenge but a mind set difficulty. The tendency is that if you are doing well in a product, then you don't change it. For instance in SLR (Single Lens Reflex) market in Europe, we have about 40-50 percent marketshare. So you tend to stick to your business, but competition is always trying to change the market and they are quicker. We have a lot of technology, but the question was whether we should go in for that and once you have made up your mind then things go very fast. But until that it takes a long time. We have had too long a monopolistic situation and monopoly is not good, it makes you easy and lazy.


Q. How difficult is the reentry proving to be?

We are doing rather well in the Middle East. In the camera group, we have a very good marketshare. It has been easy to build on our strength in the analog, so in digital still cameras it has been easy, may not be the same in video, but overall we are up there in the top three.

Q. What is your target?

A.Canon Inc global has four corporate targets by 2004. First is that in every single product and everywhere in the market, we want to be the number one. Second is that we are trying to develop new products like monitors etc, this will be some important new business. The third is that we want to make our company financially very solid company. Canon is already the number one among the Japanese companies in this industry, so while we are moving on with digitalization, we are also working hard on cost reductions. Right from supply chain to production methods we are trying to reduce our costs. The fourth target is to drive our people towards digitalization and productive, customer-oriented marketing strategies.

Q. With such a wide product range and so much competition in each product line, how do you plan your marketing strategies and identify competition?

A. The most important thing is how we line ourselves up in the channel strategies, especially in this area or region it is very important. We are seeing a realignment of the markets in Europe and in middle east with integration of the market which has already happened in Europe and is happening in the Gulf, so we are reorganizing our sales strategy.