Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market
Facing a decline in the company's core camera business as a result of the aggressive entry of smartphones, Canon identified the network security industry as a potential growth market, with expected revenues of US$23 billion by 2020. Canon opted to pursue this kind of growth potential outside its core competency by acquiring Milestone Systems in 2014 and Axis Communications in 2015. Canon paid a 50-per-cent premium to acquire Axis in a cash-only offer, while choosing to allow its two acquired companies to continue operating as independent entities. Should Canon have instead created a strategic alliance with these two companies? Would these acquisitions allow Canon to achieve synergies and secure its goal of $1 billion in sales from the network securities market by 2020? Wiboon Kittilaksanawong is affiliated with Saitama University. Andrew Jiro Poplawski is affiliated with Nagoya University of Commerce & Business.
Authors :: Wiboon Kittilaksanawong, Andrew Jiro Poplawski
Swot Analysis of "Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market" written by Wiboon Kittilaksanawong, Andrew Jiro Poplawski includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Canon Axis facing as an external strategic factors. Some of the topics covered in Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market case study are - Strategic Management Strategies, Marketing, Mergers & acquisitions, Risk management and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, increasing commodity prices, challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs,
increasing energy prices, there is backlash against globalization, etc
Introduction to SWOT Analysis of Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Canon Axis, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Canon Axis operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market can be done for the following purposes –
1. Strategic planning using facts provided in Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market case study
2. Improving business portfolio management of Canon Axis
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Canon Axis
Strengths Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Canon Axis in Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market Harvard Business Review case study are -
Strong track record of project management
– Canon Axis is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Canon Axis in the sector have low bargaining power. Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Canon Axis to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Canon Axis has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Successful track record of launching new products
– Canon Axis has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Canon Axis has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Ability to lead change in Leadership & Managing People field
– Canon Axis is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Canon Axis in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Canon Axis has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Sustainable margins compare to other players in Leadership & Managing People industry
– Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market firm has clearly differentiated products in the market place. This has enabled Canon Axis to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Canon Axis to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Canon Axis has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Canon Axis
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Canon Axis does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Canon Axis has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Canon Axis are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Innovation driven organization
– Canon Axis is one of the most innovative firm in sector. Manager in Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market are -
Low market penetration in new markets
– Outside its home market of Canon Axis, firm in the HBR case study Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Canon Axis has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High bargaining power of channel partners
– Because of the regulatory requirements, Wiboon Kittilaksanawong, Andrew Jiro Poplawski suggests that, Canon Axis is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Aligning sales with marketing
– It come across in the case study Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market can leverage the sales team experience to cultivate customer relationships as Canon Axis is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market HBR case study mentions - Canon Axis takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Canon Axis supply chain. Even after few cautionary changes mentioned in the HBR case study - Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Canon Axis vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Canon Axis has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High operating costs
– Compare to the competitors, firm in the HBR case study Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Canon Axis 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Canon Axis has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Workers concerns about automation
– As automation is fast increasing in the segment, Canon Axis needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Canon Axis is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Canon Axis is facing challenges because of the dominance of functional experts in the organization. Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Canon Axis can use these opportunities to build new business models that can help the communities that Canon Axis operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Canon Axis in the consumer business. Now Canon Axis can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Canon Axis to increase its market reach. Canon Axis will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Canon Axis to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Canon Axis to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Canon Axis has opened avenues for new revenue streams for the organization in the industry. This can help Canon Axis to build a more holistic ecosystem as suggested in the Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market case study. Canon Axis can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Canon Axis in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Leveraging digital technologies
– Canon Axis can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Canon Axis can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Canon Axis to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Canon Axis can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Canon Axis can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Manufacturing automation
– Canon Axis can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Threats Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market are -
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Canon Axis in the Leadership & Managing People sector and impact the bottomline of the organization.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Canon Axis business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Canon Axis can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market, Canon Axis may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Environmental challenges
– Canon Axis needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Canon Axis can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Canon Axis.
Technology acceleration in Forth Industrial Revolution
– Canon Axis has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Canon Axis needs to keep up with the evolution of technology in the Leadership & Managing People sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Canon Axis with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Canon Axis will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Canon Axis can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Canon Axis demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Weighted SWOT Analysis of Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Canon Axis needs to make to build a sustainable competitive advantage.