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Snap Two

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DQI Bureau
New Update

At the Canon Leadership Sum-mit 2003 in Goa, Y Adachi officially kicked off

Canon India’s second phase of growth, in which the company plans to grow over

thrice its current size in the next five years. The goal: Rs 700 crore in

revenues by 2007 with a 30% market share in the Indian digital imaging industry

by 2005. Yoroku Adachi, president, Canon Asia Marketing Group, called it the

beginning of the leadership phase.

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Canon India, after starting operations in 1997, grew to be a Rs 230 crore

company in 2003. During this time, the company started with direct sales

operations and appointed C&F agents to service the market. In 2000, it

ramped up its copier sales through significant build-up of copier channels. In

2001, the IT channels were set up for its PC-driven products like printers and

scanners. And earlier in 2003, Canon India debuted its digital camera range,

thus marking its entry into emerging growth segments. Said Alok Bharadwaj,

director and GM, CIID and volume products, Canon India, "The first phase of

Canon India involved setting up of infrastructure and rolling out product

capabilities. The second phase is that of expansion and accelerated

growth."

Making

It Happen From Rs 230 crore to Rs 700 crore and 30% market share, how...
Target

the Consumer:
Create 1,000 Canon Retail stations and Digifoto zones
Expand

Coverage:
Increase coverage from 412 to 1,000 towns
Intensify

Distribution:
Increase dealers from 281 to 500. Add 3,000 resellers
Aggressive

Branding:
Marketing spends planned to be Rs 90 crore (2003—07), up

from Rs 30 crore (1998—03)
The

Approach:
Rapid product introductions followed by cascaded price-drops

pushes the performance up
The

Forte:
Spend on R&D as a percentage of sales is among the highest

in the industry

What are the segments that promise accelerated growth? Said Alan Grant,

president & CEO, Canon India, "We have identified three products–laser

multifunction devices, all-in-ones, and digicams." According to IDC India,

each of these product segments are projected to grow in excess of 40% annually

by 2007. With the overall industry growth rate for digital imaging products at

20%, Canon India’s acceleration comes from the targeted 25% growth for the

next five years. And to sustain this growth, its market share in all digital

imaging product categories has to be sustained at 30% from 2005.

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The short-term strategy is to focus on increasing market share in the rapidly

expanding printing and MFD segment, while the long-term perspective is to invest

in becoming a market leader in the high-potential digital camera and commercial

photo studio solutions, revealed Bharadwaj.

Beyond numbers, Canon has been smart at selecting the right products for the

Indian market and doing the right pricing too. Rapid product introductions

followed by cascaded price-drops pushes the performance up. Further, its markets

are distributed between the professional/business application markets and

consumer markets.

One of Canon’s key differentiators is product development. Stated Adachi,

"Worldwide, Canon is second only to IBM, in filing patents- and all the

companies that follow us are much larger than we are." Which means, Canon’s

spend on R&D as a percentage of sales is among the highest in the industry.

One of the most recent innovations is the PictBridge standard that helps

transfer of digital image files without the need for a PC. The standard also

speaks about Canon’s view on how the market would evolve. A legendary leader

in the professional and consumer camera industry, Canon’s foray into digital

cameras is founded on the notion that the PC need not remain an interface for

long. Similarly, photo-output or the printing of photos calls for a

photo-printer; a laser or inkjet wouldn’t do. A convergence of sorts, between

normal printing and photo-printing, is also happening.

At the Leadership Summit, Canon launched 20 new products–six bubblejet

(inkjet) printers, two scanners, two flat-bed all-in-ones, five digicams and

camcorders, one projector, two laser-beam printers, and two dye-sublimation

printers. Priced between Rs 3,995 and Rs 275,000, these products straddle Canon’s

entire range of digital imaging solutions.

Easwar S Nair in Goa The author was hosted

by Canon India

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