Canon - Key Strategic Implementation Issues and Strategy Evaluation - Case Study Example

Strategic Case Study Institution Name Date Case Study - Canon Strategic implementation: General perspective The process of strategy implementation in Canon was made easy by the fact that the company first conducted a SWOT analysis to identify its internal strengths and weaknesses, the available opportunities and prevailing threats. It is opportunities and strengths analysis that the company used so that it could make use of opportunities and deal with the threats. Canon can be said to have adopted the Whittington (2001) processual approach to strategy implementation. According to this approach, strategic implementation involves a lot of learning and adaptation by the entire organization’s team. The process therefore required the employees of Canon to make various changes and adjustments to their usual practices and perspectives so that they can conform to the strategy. However, due to proper strategic planning, the strategic implementation process was easy to effect. Use of this approach requires a number of changes to be made to the strategy rather than changing the strategy altogether. This approach also gave the employees a chance to take part in the strategy implementation process through giving feedback of any loops in all the stages of implementation. Canon used this very effective approach in strategy implementation. The strategic plan that had been laid down by the company’s strategic planning unit had stated the inputs regarding resources and capabilities from various divisions of the company. The strategic planning unit had provided information regarding the strategy to these divisions which had created medium rage strategic plans at the division levels which were eventually consolidated at the strategic planning unit. The divisions were allowed to make those plans based on the medium range plans that focused on budgeting which is a major tool for resource allocation. Feedback from the divisions to the strategic management unit is given at all the stages of strategy implementation. Generally, the strategy implementation method that was used by Canon was a bi-directional communication system that could promote future planning and monitoring of the implementation process instead of a directive approach where the strategy planning unit could have established a strategy without the input of the divisional managers who were responsible for the strategy execution. This approach however gave room for continuous evolvement by the organization as it adjusts to the changes in its external environment (Egner, 2009). The processual approach that canon adopted in the process of strategy formulation and execution allowed business units that were involved in the process of implementing the strategy to be able to add some inputs in the formulation process. This is because the process of strategy formulation and implementation are interrelated. This approach may however only work for firms that have vertical integration of the various divisions such as that of Canon. Basically the key to success of this process is the fact that the company allowed participation of all the divisions and this promoted its acceptability. There were therefore no issues such as resistance from the employees since they had been involved in the entire process of planning through their division managers. The company therefore can be said to be at the star level in the BCG matrix which could be attributed to the functionality of the strategy. Key strategic implementation issues One of the key issues that Canon faced during the course of implementing its strategies is the great change that was taking place in the external environment. This includes increase in competitor, changes in customer demands due to improved technology and issues of globalization. Human capital was one of the issues that the company had to deal with in order to realize the strategies. With the strategic implementation approach that was adopted, the company had to first make major changes in its labor force. Basically, strategy implementation requires that the employees be fully empowered so that they can have adequate knowledge and be able to make decisions. Canon had therefore to transform its workforce so that all the employees can be able to change with the changes that were involved in the process of strategy implementation (Canon, 2012). After the launch of its strategies, the competitors of Canon such as Hp and Xerox had also to come up with ways of strengthening their performance in the market. On the other hand, the needs of its customers were changing due to changes in technology that everybody wanted to move along with. However, with the intentions of becoming the leading company in all business areas, the company had to focus on strengthening its product competitiveness. This was not an easy to handle thing and it called for a lot of investment on innovation. This also added the challenge of technology to the company. This new direction on investment required a lot of technological changes to make the new strategies effective (Mitarai, 2012). Research and development was also a major issue during strategy implementation at Canon. Implementation of new strategies in a company requires a lot of participation by the identified key competencies. However, having successfully identified the key competencies, Canon did not give priority on investing more on research and development. People who bear the key competencies in an organization require to be given good opportunities where they can be able to exploit more opportunities for growth. For example these are the same people who can understand what the competing companies are doing differently and research on ways of overpowering them. This failure in research and development has made it difficult for Canon to compete with giants such as Xerox despite the well defined strategies that aimed at improving its competitiveness (Prahalad & Hamel, 1990). Another key issue during the strategic implementation process was the high operating costs that Canon was operating with. The strategies were all very demanding in terms of resources and this raised the operating costs of the company during the implementation period. Another issue was to link the corporate social responsibility that the company was implementing to its suppliers and all other stakeholders. The company had to strive to ensure that its suppliers understand their standards which aimed at fulfilling the social responsibility and that the company is not alone in fulfilling the corporate social responsibility. It was a big task to drive all the stakeholders into this (Canon, 2012). Strategy evaluation So far Canon is doing towards achieving its strategies. The strategies that Canon adopted had been effective in ensuring a balance between the growth of its share in the market which the company targeted to be 30% and the firm’s profitability. Among its target markets, Canon managed to obtain a market share of 70% with laser printer, 40% of Bubble Jet Printers and 24.5% with the digital cameras. Initially, Canon had adopted a strategic vision that focused on dominating the small photocopier market which was underinvested by its competitors. Canon achieved this by adopting a technology that none of its competitors had. This vision enabled Canon to identify other areas and also laid the basis for planning of its other strategies. Basically, the strategic planning process focused on identifying areas that had been underserved. By taking advantage of the opportunities in those areas, Canon was able to obtain quite a large market share (Canon, 2011). The success of the Canon’s strategies can also be attributed to by a flexible planning process. This process started by conducting a SWOT analysis of the company and this set the direction for defining the strategies. Another notable success of the strategies in meeting the objectives was the decision to adopt a new technology in the area of photocopiers that the competitors did not have. This made Canon to be different from its competitors and was able to attract a large portion of the customers (Egner, 2009). The strategic approach method also used by Canon resulted in realization of its objectives. By choosing to involve all the employees through their division heads ensured cooperation from all levels by the employees. Therefore the strategies were well planned with a broad vision, the implementation process was also appropriate and this contributed to attainment of the strategic objectives. Conclusion Canon has continued to maintain good strategic performance since the launch of its strategic management plan maintaining a leading position with some of its products in some countries. For example in USA, the company’s MFP copier was ranked the top. The ability to maintain the good performance has been due to its continual improvement in addressing the issues faced during strategic implementation. For example the company has increased its investment in research and development. The company has also continued to produce new products that are patent-protected and this also addresses the issues of competition. Canon has also invested a lot on technology and a lot of innovations are being carried out in the company. Canon has also addressed its challenges through improved technical training of its staff and it is now maintaining high standards of production. Considering the current market position, Canon will in the future dominate the copier industry outdoing its competitors such as HP and Xerox. It would however be important for the company to keep updating its strategies with the changing world to ensure that it will not face competition from emerging companies that are focusing on the global customer needs. References Egner, T. (2009). Canon- Strategy Analysis: Analysis of a Diversified Company. Retrieved on 20th July 2012 from http://www.grin.com/en/e-book/135453/canon-strategy-analysis- analysis-of-a-diversified-company?partnerid=googlebooks Mitarai, F. (2012).Canon Inc. Corporate Strategy conference 2012. Retrieved on 20th July 2012 from www.canon.com/ir/housin2012/housin2012ceo_e.pdf Canon, (2012). The Canon Story 2012/2013. Retrieved on 23rd July 2012 from www.canon.com/about/library/pdf/canon_story.pdf Canon, (2011). Canon sustainability report 2011. Retrieved on 22nd July 2012 from www.canon.com/environment/report/pdf/report2011e.pdf Whittington, R. (2001). What is strategy, and does it matter? Retrieved on 22nd July 2012 from http://books.google.co.ke/books?id=PP6IMSkbYWoC&pg=PA9&lpg=PA9&dq=Whittin gton%27s+Theories+of+Strategy&source=bl&ots=_mKuc09hjO&sig=0FUeoOXgU_U_ w16zWKWb6Ls8aJQ&hl=en&sa=X&ei=fF8OUOaAFIXRrQeirYDwDw&ved=0CFQQ 6AEwAg#v=onepage&q=Whittington%27s%20Theories%20of%20Strategy&f=false Khan, L. (2012). Case Study- Canon. Retrieved on 22nd July 2012 from http://www.authorstream.com/Presentation/lubaidkhan-419511-case-study-canon-lubaid- khan-education-ppt-powerpoint/ Prahalad, C. and Hamel, G. (1990).The Core Competence of the Corporation. Retrieved on 23rd July 2012 from www.jeremym.fr/blog/wp- content/uploads/2009/11/C.K.Prahalad_G.Hamel_CoreCompetenceOfTheCorp.pdf Read More