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 transportation and logistics costs, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, there is backlash against globalization, wage bills are increasing, challanges to central banks by blockchain based private currencies,
increasing household debt because of falling income levels, increasing energy prices, 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 -
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.
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.
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.
Superior customer experience
– The customer experience strategy of Canon Axis in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
Ability to recruit top talent
– Canon Axis is one of the leading recruiters in the industry. Managers in the Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
Diverse revenue streams
– Canon Axis is present in almost all the verticals within the industry. This has provided firm in Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
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.
Analytics focus
– Canon Axis is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Wiboon Kittilaksanawong, Andrew Jiro Poplawski can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
High brand equity
– Canon Axis has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Canon Axis to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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 -
Lack of clear differentiation of Canon Axis products
– To increase the profitability and margins on the products, Canon Axis needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
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.
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.
Slow decision making process
– As mentioned earlier in the report, Canon Axis has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Canon Axis even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
No frontier risks strategy
– After analyzing the HBR case study Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
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.
Increasing silos among functional specialists
– The organizational structure of Canon Axis is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Canon Axis needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Canon Axis to focus more on services rather than just following the product oriented approach.
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.
High cash cycle compare to competitors
Canon Axis has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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.
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 -
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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Canon Axis can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
Loyalty marketing
– Canon Axis has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
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.
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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Canon Axis can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Canon Axis can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Canon Axis can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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.
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.
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.
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 -
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.
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.
Shortening product life cycle
– it is one of the major threat that Canon Axis is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Increasing wage structure of Canon Axis
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Canon Axis.
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.
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.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Canon Axis needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Canon Axis in the Leadership & Managing People industry. The Leadership & Managing People industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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.
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.
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.
