Canon Inc. is a Japanese multinational company and one of the world’s largest manufacturers of imaging and optical products like multifunction devices (MFDs), Flat Panel Display (FPDs) etc. Canon has been increasing its overseas production and the utilising local components in order to reduce exchange rates threat. Canon has maintained an operational margin of over 9 percent from the past three years.
Strength in the SWOT Analysis of Canon :
Strong Product Portfolio: Canon has different consumer offerings based on a difference in the consumer segments. The product portfolio is diverse and includes; office MFDs, laser printers, laser MFPs, digital production printers etc. The diversity in portfolio allows the company to target specific segments and reduces the risk of overdependence on single segments.
Strong and diversified manufacturing operations: Canon has been focusing on in-house manufacturing facilities in its various markets around the globe. Besides Japan, Canon has manufacturing facilities in 18 different countries. This allows them to improve quality and reduce costs. This also allows them efficiency in operations.
Strong R&D: Canon has been one of the companies looking for continuous innovation and evolution which is supported by its strong R&D facilities which allow it to develop disruptive products in all its segments and categories. The strong R&D helped in building strong Intellectual Property as Canon has received various patents on its innovations.
Loyal customers: Canon enjoys a rich history of effective marketing campaigns and superior performance which has created a strong brand image for the company. This has also helped Canon in garnering a loyal base of customers.
Fantastic brand valuation: Canon is valued at a whopping $40 billion which makes the brand one of the top 500 most valued brands in the world.
Weakness in the SWOT Analysis of Canon :
Dependence on HP: HP is one of the biggest clients of Canon’s laser printers, generating about 18 percent of consolidated sales of Canon. Although this is a major strength of canon, the phrase “your best friend is your worst enemy” comes to mind. Termination of this contract can affect the bottom-line of Canon.
Defects in products affect image: Canon, which is known for superior performance has also faced controversies in terms of product defects. For instance, Canon acknowledged defects in Rebel T6s and T6I DSLRs in 2015. This affects the brand image and trust in the company.
Brand only recognised by Imaging Products: Canon has been popular worldwide for its imaging products like cameras etc. but its other products such as projectors are not so popular and hence there is a lack of recognition and awareness.
Opportunity in the SWOT Analysis of Canon :
Growth in Universal Consumer Electronics market: The consumer electronics market is expected to grow at a CAGR of more than 2.5 percent during 2015-2020. This is primarily driven by emerging market and increase in household income levels.
Growth in Digital printing market: The market for digital printing is expected to grow from $130 bn in 2013 to $290 bn 2020. Also, inkjet is going to be the major contributor to the segment. This provides a positive outlook for Canon in the future.
Growing medical device market: There is a continuous growth in the medical device business in the world and this helps the company’s strategy to grow in the medical device industry. This will help the company to expand its product portfolio and market share.
Threat in the SWOT Analysis of Canon :
Shrinking Camera Industry: The Camera Industry is shrinking due to the evolution of mobile phone cameras and has affected sales of Canon’s camera division.
Stringent Regulations in medical devices industry: The medical devices industry is susceptible to stringent and different regulations in different countries. This increases the compliance costs and affects profitability.
Rapid changes in Technology: The company has to maintain its speed with the changes in technology. This requires a huge investment in R&D and increases costs for Canon.