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Canon places emphasis on revitalisation and reform

March 7, 2019

The OEM has published its Presentation Material for its Corporate Strategy Conference on 1 March 2019, put together by the company’s Chairman and CEO, Fujio Mitarai, in which Canon cites its focus on enhancing existing businesses while driving growth with new ventures such as commercial printing.

The material describes Canon’s Excellent Global Corporation Plan Phase V, which spans 2016-2020, under which the CEO says it has been “working towards reform under the basic policy of ‘Embracing the challenge of New Growth Through a Grand Strategic Transformation’.

Through the auspices of this five-year plan, Mitarai explains, Canon’s “number one focus” is to “complete a transformation of our business portfolio”, transitioning into “business areas where higher growth can be expected.”

Over the last few years the company has been exploring new avenues and acquiring new businesses, including Océ, a move designed to help Canon plumb the commercial printing market. As a result, says Mitarai, “sales of new businesses in 2018 rose to account for 23 percent of total revenue, as compared to 9 percent in 2015”, before the Plan unfolded.

“On the other hand,” he adds, “existing businesses account for more than 70 percent of total sales and an even higher percentage of profits”.

Subsequently, the OEM has expressed its determination to “reinforce” its existing businesses, such as its colour MFDs, which have seen overall unit sales grow by an average yearly rate of about 8 percent over the past three years. However, Mitarai is also clear that its four new businesses, among them commercial printing, are expected to drive growth in the coming years.

He explains, “The digital portion of the market, where Canon competes, continues to grow thanks to the shift from offset to digital against the backdrop of rising demand for a high-variety short-run printing. We expect the market for graphic arts, where high image quality is required, and packaging, which includes labels, to continue to drive growth. The digital market, which includes presses and consumables, is currently around ¥3 trillion ($26.8 billion/€23.8 billion) and is expected to continue growing at a rate of around 5 to 6 percent. In contract, over the past several years, this business has experienced significant change in the environment that surrounds it, including a shift in printing technology from toner to inkjet.”

Citing the company’s achievements in this sector over the past three years, Mitarai reveals that Canon has launched three new inkjet-based products targeting the graphic arts segment “where high growth is expected.” The company has also launched a new product on the packaging market. In terms of challenges and measures for the next two years, the CEO cites an increase in the number of high-level sales engineers that are able to properly address customer challenges, and the employment of a sales structure that was successful in North America and Europe.

He concludes, “We will promptly strengthen our sales structure, securing MIF in line with market growth, which will allow us to capture demand for consumables and link this to both sales growth and profitability improvement.”

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