This paper supports the argument that companies outside the industry sector can draw useful lessons from the strategies used by Canon in its own industry. This paper will also discuss some of the strategic areas that may be of interest to other industries and the limitation of using the said information.
2. Analysis and Discussion
One area from which lesson could be learned is having a vision for the company as part of setting of a strategic plan for the organization (Johnson and Scholes, 1993). Many things can be learned in having a vision. A vision sets the direction for managers and employees to align the corporate objectives of the organization. In the case of Canon, the vision of the company covered the values of the company, the market position that it expected to hold over many years and the resources needed to develop and sustain the same. That the vision is dynamic depending on how the senior and other managers related the same with other conditions should be an encouragement to companies outside the industry since it cannot be assumed the once a vision is set, it will stay fixed forever. Since a vision must relate with other variables, it follows that it must continuously adopt with the other variables or conditions in order to create the needed mix.
One of the variables is the values of Canon. Values may include beliefs and traditions that are given importance by the company. It could be a belief in discipline, which must be sustained. Other companies may well learn that values of the founder or founders are normally carried in the organization throughout the years. The fact that values or beliefs in something have worked for the organization, then it would be very hard to change the same without questioning or doubting the very foundation upon which the organization was established. It is therefore good for other companies to have their corporate philosophies and code of ethics, which should be made known to every part of the organization. A limitation of this information is in case condition may justify modification of values and management may refuse to see it.
Another area that is worth looking into from the Canon’s strategic plan is the fact that the vision is influenced by the market position that the company expected to hold over the years. This would be the equivalent of looking at the external environment of the organization to know the expected demand of the industry product as basis of corporate strategies. In a very simple sense, an organization can justify expansion and investment in capital expenditures if it can see good industry and economic outlook for the coming years that would not only justify recovery of investments but also should generate profits above the cost of capital. To understand demand there is need to know the greater macroeconomic environment which includes the study of the effects of interest rates, inflation rates, economic growths, foreign exchange rates, the changing taste of the customers, and many other things would necessarily affect the demand for the company’s product (Slavin, 1996). Other companies are aware of this as they look for industry opportunities and threats that would affect their own industries. The industry opportunities may be derived using the Porter’s Five-force model where each of the forces is studied on how they will affect the long-term profitability of the industry. These forces include the threat of new entrants, the availability of products substitutes, the bargaining power of buyers, the bargaining power of suppliers, the bargaining power of sellers and the extent of rivalry in the industry. In a sense, Canon could be considered to have determined its industry opportunities and threat as bases of its strategies. One limitation of this is the tendency to associate plans for expansion when forecasted economic growths would seem likely and forgetting the risks that forecasts could be wrong.
Another area from which learning could come is the fact the Canon’s vision covers also the resources needed to develop and sustain the said vision. This means that Canon had to know how many resources it had and how much it needed to support a dynamic vision that considered other factors like the vision and the market position that company can hold. In strategic planning practice, this would be the equivalent of analyzing a company’s strengths and weakness based on its financial analysis and value chain. Financial analysis could show whether company has the needed profitability level, liquidity level and solvency to level to sustain the strategies (Brigham and Houston, 2002; Droms, 1990; Meigs, Meigs & Meigs, 1995). A company may not just expand too optimistically because it faces the risks of over expansion outside what its size and financial capacity could sustain. The value chain could also generate information on where the company could deliver well products and services to customer better than competitors could. In the case of Canon, it had identified it core competencies, which it used as bases of, is strategies. These competencies could be viewed as corporate strengths and source of competitive advantage (Porter, 1988) which could be used by other companies in the design of their own strategic plans (Porter, 1980; Byars, 1991). One limitation of this is having a mismatched on defined strengths with the needed strength for a certain strategic plan.
To conclude, the case study of Canon indicates a story of the success of its strategies and implementation. Success attracts managements of many companies as good experiences as that from Canon could serve as inspiration or motivation. The fact the company had a vision that is supported by the values of founders or managers, the market position that company can hold over the years and the resources needed to develop and sustain said vision conveys a strong message about the interrelationships of these things that can be tapped by many organizations outside the industry where Canon operates.
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