case4 Canon: Competing on the capabilities
Case4 Canon: Competing on the capabilities
Learning Purpose and Objectives Overall,studying the case of Canon can: * Revisit the key concepts you have learnt earlier; Integrate those ideas into a comprehensive framework that would show how they relate to and complement one another instead of being contradictory and mutually inconsistent. Help clarify how these concepts can be translated into effective strategic action
Learning Purpose and Objectives Overall, studying the case of Canon can: Revisit the key concepts you have learnt earlier; Integrate those ideas into a comprehensive framework that would show how they relate to and complement one another instead of being contradictory and mutually inconsistent. Help clarify how these concepts can be translated into effective strategic action
Evolving and Broadening of Concept of Strategy Michael Porter's Competitive Strategy represented a major breakthrough and this IO-based framework provided the main lens through which the issues and challenges of strategy were viewed. In the late 1980's,Grey Hamel and C.K.Prahalad proposed the approach to resource-based view of strategy,with the concept of core competency and strategic intent. On the second half of the 1990's,another set of ideas come to the fore-essentially focusing on innovation as thethe core of strategy.The advocates of those ideas include Rich D'aveni(hyper-competition),Kathy Eisenhardt (competing on the edge),Chan Kim (value innovation),Costas Markides (strategic innovation),etc
Evolving and Broadening of Concept of Strategy Mic hael Po r ter’s Competitive Strategy represente d a major bre akth roug h and t his I O-base d f ramework p rovided the m ain lens through which the issues and challenges of strategy were viewed. In the late 1980’s, G rey Hamel and C.K.Prahalad pro p o sed the a p p roach to resou rce-ba s e d view of strategy, with the con c e pt of core competency and strategic inten t. On the seco n d half of the 1990’s, ano ther set of ide as come to the fore – essentially focusing on inn ovation as the the core of strategy. The advo cates o f tho s e ideas include Rich D’ave ni (hyp er-competition), Kathy Eisenhardt (competing on the edge), Chan Kim (value innovation), Costas Markide s (strategic inn ovation), etc
Assignment questions (1)What was Canon's strategy in the photocopier business (2)How did Canon build and leverage competencies? (3)Where did the competitive strategy (Canon's differentiation strategy)come from?Describe the competency-building process? (4)How to make this competency-building process effective?
Assignment questions (1)What was Canon’s strategy in the photocopier business ? (2) How did Canon build and lev erage competencies ? (3) Where did the competitive strategy (Canon’s differentiation strategy) come from? Describe the competency-building process? (4) How to make this competency -building process effective?
Question l:What was Canon's strategy in the photocopier business? (see Figure 1) Figure 1 Xerox's existing Canon's strategic Business Logic 1.Customer definition Medium/large Small companies companies individuals 2.Use pattern Centralized decentralized copying copying 3.Product characteristics high volume utility 4.distribution own sales force dealers 5.Service own service network dealers 6.Sale terms lease sale 7.Technology leading edge low cost
Question I: What was Canon’s strategy in the photocopier business? (see Figure 1) Figure 1 X erox’s existing Canon’s str ategic Busines s Logic 1. C ustomer definition M edium/large Small companies c o mpanies individuals 2. Use patte rn Centralize d decentralize d copying copyin g 3. Prod u ct characteri stics high v o l u me utility 4. distribution own sales force dea ler s 5. Service own service network deale r s 6. Sale terms lea se sale 7. Tec hnology leadi ng edge l ow c o s t
Question Il:How Canon building and leveraging competencies(see Figure 2)? Canon was in the camera business originally.It anchored that business in its basic management discipline of quality manufacturing and value engineering,a set of competencies in technologies-primarily optics technology -and in developing and managing dealer networks. Then,through the evolution of camera business and through dedicated research efforts,Canon built a strong competence in the area of micro-electronics. Given these resources and competencies,Canon decided to enter the photocopier business.it reconfigured the business so as to be able to leverage the resources and capabilities it had. The photocopier business,in turn,allowed Canon to build new up-stream and down-stream competencies-in new materials technology
Question II: How Canon building and leveraging competencies(see Figure 2) ? Canon was in the camera b usiness o riginally. It anch ored that busine ss in its basic man ageme nt disci pline of quality manufactu ring and value engineering, a set of competencies in technologies – primarily optics technology – and i n developing and managing dealer networks. Then, t hrough the evolution of camera b usiness and t hrough dedicated research efforts, Canon built a stron g com petence in the a r e a of micro -elect r o nics. Given these resources a n d competencies, Canon decided t o ente r the p h o toco pier business. it recon figure d the business so as t o be able to leverage the resources and capabilities it had. The photo copier business, in turn, allowed Canon to b uild new up-stream and down-stre a m competencies-in new m aterials technology
Two inter-linked tasks of the strategy () To continuously find ways to leverage one's existing resources and competencies to create and pursue business opportunities,and ( to continuously use existing business and operations to built new competencies and strengthen existing one's.In essence,it is a strategy of perpetual motion
Two inter-linked tasks of the strategy (i) To continuously find ways to lev erage one’s existing resources and competencies to create and purs ue business opportunities, and (ii) to continuously use existing business and operations to built new competencies and strengthen existing one’s. In essence, it is a strategy of perpetual motion
Figure 2:Building and Leveraging Competences Management Quality/ Disciplines Value Engineering Technological Competences Micro- Optics New Electronics Materials Application Cameras Copiers Areas Office Prof- Equipment Optics Own sales Mass Market Organization Merchandis Access ers/dealers Cannon Brand Name Click here te return
Figure 2: Building and Leveraging Competences M anage m e nt Disciplines Technological C o mpet e nce s Application Areas Market Access Quality/ Value Engineering Cannon Brand Na m e Own sales Organization Mass M e r chandis e rs/dealer s Copier s Offic e Equip ment Ca m eras ProfOptics MicroElectronics Optics New Materials Clic k here to retu rn
Question Ill:Where did the competitive strategy come from?Describe the competency-building process *One step beneath the visible competition for markets,and supporting company's posture in that competition,lies its strategic architecture A company's competitive strategy must grounded in that architecture (Prahalad and Hamel,1991),and its day-to-day activities in pursuance of that strategy provide a means for continuously enhancing and broadening the assets and resources,competencies,etc.This is the second stage of competition-the competition for competencies At the very base of that iceberg lies the vision,the ambition, the dream.(see Figure 3)
Question III: Where did the competitive strategy come from? Describe the competency-building process One step b e neath the visible compe tition for markets, and sup p o rting company’s posture in that competition, lies its strat egic a rchitect ure A company’s competitive strategy must g rounded in that archite cture (Prahalad and Hamel, 1991), and its day-to-day activities in p ursuance of that strategy p rovide a me a ns for continuously enhancing and b roadening the a sset s and resou rces, competencies , etc. T his is t he second st age of competition –the competition for competencies At the very b ase of that iceberg lies t h e vision, the a mbition, the d r e am. (see Figure 3 )
Figure 3:the three stages of competition Competition Competition Competition for dreams for for markets competences Vision/ Strategic Competitive Purpose Architecture Strategy Structural analysis of Assets and resources Imagination of industry and future markets Competencies Strategic segmentation Defining of the capabilities and positioning Skills Generic strategic-cost opportunity Ete. Corporate ambition leadership. differentiation Etc
Figure 3: the three stages of competition Co mpetition for drea m s Co mpetition for m arket s Vision/ Purpose C o mpetitive Str ateg y · I magination of future m ark ets ·Defining of the opportunity ·Corporate a mbition ·Structural analysis of industry ·Strategic seg mentation and positioning ·Generic str ategic- cost leade rship. differentiation ·Etc. Str ategic Architectur e Co mpetition for co mp etenc e s ·Assets and r esources ·Co mpetencies and capabilities ·Skills ·Etc
