Two years ago, We Criticised Canon for Belligerently Focusing on R&D Investments and Innovation when the Market didn’t seem to have a taste for it. Two years thence, We realise that Canon India’s CEO Kensaku Konishi somehow has managed to pull it off, Despite all Criticism. How? This one’s just to Answer That Question!
“Stay hungry. Stay foolish.” It was a virtue that The Whole Earth Catalogue, a famous American magazine quoted in its last issue before closing down; and one, which Steve Jobs quotes quite often as being his mantra for continuous innovation and R&D. In the early part of this decade, Canon India had a measured, tentative and tenacious approach that started with a restrictive foray into the B2B arena. Over the last few years, however, the company has been true to the above ‘Stay hungry...’ philosophy, in letter and spirit. The company has been on a relentless drive to raise its stature from the sidelines to being firmly in the driving seat in the digital camera, copier and printer markets in India; and purely focused on product innovation and on-the-ground retail strategies.
Two years back, we ourselves had questioned the relevance of Canon’s belligerent focus on investing in R&D, at a time when the economy itself had slowed down. Today, it just seems that Kensaku Konishim President and CEO, Canon India, took the right gamble. As of now, Kensaku does have some numbers to defend his course of action. Revenues in 2006 stood at Rs.3.8 billion. By October this year, the company has touched Rs.10 billion and it plans to reach a turnover of Rs.12.5 billion by end 2010. That would mean a CAGR of around 34.67% for the last four years. The company is still far from satisfied with this level, which is obvious. After all, Canon India still contributes less than 1% of the parent company’s global turnover (Europe leads at around 33.3%). Konishi projects that the company should be able to contribute 1% to global turnover by 2012, 2% by 2015 (turnover of around $2 billion) and 5% by 2020 (turnover of $3 billion). So how did Kensaku manage such a show?
Konishi joined India in 2006 and immediately realised that some strategic changes needed to be made drastically fast. His initial plan was based on four base strategies. Firstly, he transformed the reporting structure and made individual people accountable for product groups, rather than the function-based hierarchy prevailing earlier. Secondly, he immediately ramped up on his sales force from around 400 to 800 to cater to customers and end employees. Thirdly, he launched aggressive city by city promotional strategies to make up for the beyond budget constraints in nation-wide promotions. And fourthly, Kensaku forced his people to aggressively tap dealerships; particularly those who were not too much into their competing brands like HP. Kensaku’s added an additional geographic focus for his people in this plan. Since the beginning of this year, Canon is going to Tier 2 and 3 cities as well, through mobile showrooms where they display their products, city by city, week by week.
“Stay hungry. Stay foolish.” It was a virtue that The Whole Earth Catalogue, a famous American magazine quoted in its last issue before closing down; and one, which Steve Jobs quotes quite often as being his mantra for continuous innovation and R&D. In the early part of this decade, Canon India had a measured, tentative and tenacious approach that started with a restrictive foray into the B2B arena. Over the last few years, however, the company has been true to the above ‘Stay hungry...’ philosophy, in letter and spirit. The company has been on a relentless drive to raise its stature from the sidelines to being firmly in the driving seat in the digital camera, copier and printer markets in India; and purely focused on product innovation and on-the-ground retail strategies.
Two years back, we ourselves had questioned the relevance of Canon’s belligerent focus on investing in R&D, at a time when the economy itself had slowed down. Today, it just seems that Kensaku Konishim President and CEO, Canon India, took the right gamble. As of now, Kensaku does have some numbers to defend his course of action. Revenues in 2006 stood at Rs.3.8 billion. By October this year, the company has touched Rs.10 billion and it plans to reach a turnover of Rs.12.5 billion by end 2010. That would mean a CAGR of around 34.67% for the last four years. The company is still far from satisfied with this level, which is obvious. After all, Canon India still contributes less than 1% of the parent company’s global turnover (Europe leads at around 33.3%). Konishi projects that the company should be able to contribute 1% to global turnover by 2012, 2% by 2015 (turnover of around $2 billion) and 5% by 2020 (turnover of $3 billion). So how did Kensaku manage such a show?
Konishi joined India in 2006 and immediately realised that some strategic changes needed to be made drastically fast. His initial plan was based on four base strategies. Firstly, he transformed the reporting structure and made individual people accountable for product groups, rather than the function-based hierarchy prevailing earlier. Secondly, he immediately ramped up on his sales force from around 400 to 800 to cater to customers and end employees. Thirdly, he launched aggressive city by city promotional strategies to make up for the beyond budget constraints in nation-wide promotions. And fourthly, Kensaku forced his people to aggressively tap dealerships; particularly those who were not too much into their competing brands like HP. Kensaku’s added an additional geographic focus for his people in this plan. Since the beginning of this year, Canon is going to Tier 2 and 3 cities as well, through mobile showrooms where they display their products, city by city, week by week.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles
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