Canon Case Study
Jake Kral
Canon Case Study
Executive Summary - When Canon jumped into the business in the late 1960s, most observers were skeptical. Less than a tenth the size of Xerox, Canon had no direct sales or service organization to reach the corporate market for copiers, nor did it have a process technology to by-pass the 500 patents that guarded Xerox's Plain Paper Copier. Over the next two decades, Canon rewrote the rule book on how copiers were supposed to be produced and sold as it built up $5 billion in revenues in the business, emerging as the second largest global player in terms of sales and surpassing Xerox in the number of units sold. Canon was founded in 1933 with the ambition to produce a sophisticated 35mm camera to rival that of Germany's world-class Leica model. In only two years' time, it had emerged as Japan's leading producer of high-class cameras. During the war, Canon utilized its optics expertise to produce an X-ray machine which was adopted by the Japanese military. Diversification was always very important to Canon in order to further its growth, and a new products R&D section was established in 1962 to explore the fields of copy machines, auto-focusing cameras, strobe-integrated cameras, home VCRs and electronic calculators. Canon began research into copier technology in 1959, and, in 1962, it formed a research group dedicated to developing a plain paper copier (PPC) technology. The only known PPC process was protected by hundreds of Xerox patents, but Canon felt that only this technology promised sufficient quality, speed, economy and ease of maintenance to successfully capture a large portion of the market. After studying the distribution of offices in Japan by size, Canon decided to focus on a latent segment that Xerox had ignored. This was the segment comprised of small offices who could benefit from the functionality offered by photocopiers but did not require the high speed machines available in the market.' Canon management believed that
Canon Case Study
Executive Summary - When Canon jumped into the business in the late 1960s, most observers were skeptical. Less than a tenth the size of Xerox, Canon had no direct sales or service organization to reach the corporate market for copiers, nor did it have a process technology to by-pass the 500 patents that guarded Xerox's Plain Paper Copier. Over the next two decades, Canon rewrote the rule book on how copiers were supposed to be produced and sold as it built up $5 billion in revenues in the business, emerging as the second largest global player in terms of sales and surpassing Xerox in the number of units sold. Canon was founded in 1933 with the ambition to produce a sophisticated 35mm camera to rival that of Germany's world-class Leica model. In only two years' time, it had emerged as Japan's leading producer of high-class cameras. During the war, Canon utilized its optics expertise to produce an X-ray machine which was adopted by the Japanese military. Diversification was always very important to Canon in order to further its growth, and a new products R&D section was established in 1962 to explore the fields of copy machines, auto-focusing cameras, strobe-integrated cameras, home VCRs and electronic calculators. Canon began research into copier technology in 1959, and, in 1962, it formed a research group dedicated to developing a plain paper copier (PPC) technology. The only known PPC process was protected by hundreds of Xerox patents, but Canon felt that only this technology promised sufficient quality, speed, economy and ease of maintenance to successfully capture a large portion of the market. After studying the distribution of offices in Japan by size, Canon decided to focus on a latent segment that Xerox had ignored. This was the segment comprised of small offices who could benefit from the functionality offered by photocopiers but did not require the high speed machines available in the market.' Canon management believed that