【Study】 Business model transformation by world excellent company: Canon

PROJECT

To help our client who was facing the urgent need to transform their business model, we conducted an analysis on one of the world’s excellent company, Canon, and studies their business model transformation.

Sudden demand drop due to wider usage of digital camera

Canon’s business was centered on silver salt cameras (mainly film cameras) . Around year 2000 they faced a sudden market shrink due to the wide spread of digital cameras. This put them in the critical situation however they managed to maintain and grow their business through business diversification. e-solutions examined how they managed to have such transformation.

 

Stable revenue by automatic ordering of consumables

Utilizing the technology cultivated with silver halide cameras they productized digital cameras and sold them. In addition, they entered new business areas, home printers as well as office equipment covering replenishment inks and multifunction machines. The sensors were also installed in the multifunctional machines, so that they are able to provide remote services, such as automatic replenishments orders and maintenance services. As such, they responded quickly to digitization and changed thier business model from traditional product-sell model to stock-revenue model securing more stable earnings while taking advantage of their strengths.

 

New market entry using technologies of other companies

In addition, through M&A, they earned new technologies. This allowed them to quickly enter in to new growth markets. This is one of their success factors of their business model transformation. For example, for network camera market which was then a rising promising market, although Canon owned image processing technology and optics related hardware they lacked software related technologies, video management technologies, network technologies. Canon acquired Danish company called Milestone Systems and Swedish company called Axis Communication. This enabled them to entry network camera market.

Business model transformation from product-sell model to stock-revenue model and quick entry to new market while taking advantages of technologies of other companies were the success factors of Canon’s successful business diversification.

OTHER PROJECTS

TOP
© e-solutions inc. All Rights Reserved.