Businessmodel of Canon

Customer Segments

Canon’s principal customers are retail and distribution companies, businesses – including small and medium-sized businesses, professional print organisations, large commercial enterprises and government bodies – and consumers, who can access products through the Company’s online store and retail network. Canon also recently launched a range of cinematography imaging products, which will be reportedly targeted primarily at broadcast organisations and movie studios. The Company’s largest markets for sales are in Japan, the US and Europe, where its customers have included Bank of Valetta and Coca Cola.

Canon also targets businesses directly with its suite of business services, including printing management and outsourcing. The Company has provided business services to companies across a range of sectors, including insurance provider AEGON, accountancy firm Armstrong Watson, the British Library, chemicals company Borealis and stationer Staples. Under its European Canon Professional Services programme the Company provides free support services to Canon professional photographers and filmmakers.

Value Propositions

Canon’s greatest value to consumers is the reputation of its brand and the quality and reliability of its products. The Company is constantly researching innovative tool for its products so that its products remain popular and well-regarded, and the Company provides ongoing technical support and maintenance services.

Channels

Information regarding Canon, its products and its services is available at the Company’s website at www.canon.com. Canon’s products are available for sale via its online store, as well as through the Company’s network of retail outlets. The Company also sells products via its distribution and retails customers and through its worldwide network of authorised resellers. Large enterprises, organisations and government bodies can purchase large orders of Canon products by contacting the Company’s sales team directly. Similarly, customers of Canon’s business services can contact secure service contracts via Canon representatives.

Customer Relationships

Consumers can purchase Canon products on a self-service basis from the Company’s online store, as well as through the Company’s network of retail outlets. Customers that buy products in-store can receive greater personal care, receiving advice and guidance from the Company’s in-store sales representatives. Large business customers and Canon’s business service clients require greater interaction with members of the Canon sales and marketing team, with contracts negotiated directly. Canon provides ongoing support to its customers, both directly and through its partners.

It also supplies a range of support resources through its website, including self-help guides, service and repair assistance, manuals, and online technical assistance. Customers can also interact directly with Canon representatives in their various retail outlets and through the Company’s Facebook, Twitter, Instagram, LinkedIn, and YouTube accounts.

Key Activities

Canon manufactures and sells imaging, optical and multi-functional office equipment, including cameras, printers, copiers and scanners to retailers, distributors, businesses and consumers. The sale of these products is frequently supported by the provision of paid-for maintenance services contracts.

The Company also provides a range of business services, including managed print services, outsourcing, information management, and marketing and communication services. Canon also manages a network of accredited resale and service partners, which are certified to provide support, outsourcing and maintenance services to Canon customers on the Company’s behalf.

Key Partners

Canon partners with a variety of companies through its Canon Partner Channel, authorising companies to sell, service and provide support services relating to Canon products worldwide. These partners principally comprise small and medium-sized local or regional operators. Partners can be authorised resellers or can obtain certifications across a range of more technical services, including managed printing services, office solutions, advanced scanning solutions, advanced office imaging, imaging supplies, network camera solutions and information management.

In return Canon partners receive help-desk support, tools, resources, training and Among Canon’s partners are Condor Office Solutions, Pro Print Solutions, Stanford Marsh Group, Hussey Knights, Mercury Business Supplies and Think Office Technologies.

Key Resources

Canon’s key resources are its products, its manufacturing facilities, its sales network, and its personnel. The Company’s products use a range of patented proprietary technologies. In 2015 Canon was ranked third in a list of top US patent holders only behind IBM and Samsung Electronics, with 4,134 individual patents. The Company’s distributions and supply networks are also key to the Company’s business model.

Cost Structure

Canon’s principal costs relate to its research and development activities, manufacturing activities – including operation of production facilities and purchase of supplies, logistics and transit operations, and operation of an international network of retail outlets. In 2015 research and development costs alone amounted to JPY 328.5 billion (approximately $3 billion).

Revenue Streams

In 2015 Canon generated more than JPY 3.8 trillion (approximately $34.5 billion) in annual revenue. Its principal revenue stream continues to be its domestic and international manufacture and sale of optical, imaging and multi-functional office equipment products, including digital cameras, digital copiers, laser printers, semiconductor lithography equipment and FPD lithography equipment, flash units, scanners, camcorders and computers. Additionally, Canon has recently launched a range of cinematography imaging products. The Company’s largest product segment in terms of revenue is its multifunctional copier division.

Canon also provides services related to its products under various contractual agreements, and provides separately-priced product maintenance contracts for which customers pay a base fee plus a variable amount based on usage. These maintenance services are often bundled into sales of products. Canon’s product revenue is supplemented by revenue generated through the provision of various business services, including managed print services, outsourcing services, and marketing and communication services.