Summary

This case focuses on Canon, a company engaged in the production of high quality cameras along with other item, such as inkjet/laser printers, scanners, photocopiers, etc., which have allowed the company to increase its economies of scale and profitability in the market. The company was originally named as Precision Optical industry Co. Ltd in 1934 by its founder Goro Yoshida, who developed and designed Kwanon, a prototype published in a magazine, but never mass produced for the general public. The name was later changed to Canon camera Co in 1947 after the World War ended and years later it was shortened to Canon Inc. in 1969. Furthermore, Conan was a Japanese multinational organization operating in various parts of the world. The senior managers of Canon evaluated that the raise in smart phones could adversely affect the sales of the digital cameras, as the next generation smartphones came packed with high camera capabilities in the market. Therefore, it was determined that Canon diversified its market and became engaged in the network security market, which was expected to grow in the near future, in which the company estimated that it could drive around one billion worth of revenues from the sales of surveillance cameras by the year 2020. However, Canon focused on the acquisition of Milestone Systems in 2014 and Axis communication in 2015, whichincreased its core competency and allowedthe company to develop technologically advanced products for the prospective customers in the network security market.

Canon Case Harvard Case Solution & Analysis

The Milestone Systems was a leader in internet protocol (IP) video management software and Surveillance Solutions. Whereas, Axis communication Acquisition was to complement milestone System’s purchase, which was a global market leader in network cameras and video encoding market. This, in turn, allowedCanon to introduce technologically advanced surveillance equipment, with high optimization capabilities, while using the expertise in video management software and video encoding gained from the acquisition of above mentioned companies. Therefore, the company would be better positioned to develop surveillance equipment to fulfill the requirement of the industrial client available in the network security market. It was expected that it would help the company enhance its brand image and allow it to differentiate its products from those already available in the market, due to which the company would be able to generate additional sales revenues from the products developed and sold in the network security market

Potential Benefits of entering the Network Security Market

Canon acquired two different companies, which allowed the company to enhance their network encoding capabilities as well as it allowed the company to develop effective Video management software. Furthermore, by using its current core competencies which the company had gained through 90 years of operational experience such as latest technology attained by investing in its research and development projects, while using expert/efficient workforce, allowed the company to develop highly advanced products with various models namely power shots, SLR and EOS, etc........................

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