Market Analysis Canon Essay Example
Market Analysis Canon Essay Example

Market Analysis Canon Essay Example

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  • Pages: 4 (955 words)
  • Published: October 22, 2017
  • Type: Paper
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Module 3 covers market analysis, which involves defining and analyzing the market for the TPM combination using Porter's 5-forces framework. The module outlines the market where the TPM combination operates and analyzes it. Additionally, it categorizes the TPM combination within the growth-share matrix.

For Canon and other companies, achieving accurate market definition is crucial for success as an incorrect definition can lead to ineffective strategies and failed products. The TPM combination camera market is complex due to its diverse applications in gadgets, phones, laptops, and webcams. While digital cameras were once considered luxuries, they have now become everyday commodities.

With the availability of alternative image capturing and storing products, there has been a significant growth in the market. Sony, Nikon, Kodak, Trust, Panasonic and Fujifilm are among the numerous competitors competing for a share. Given the abunda


nce of digital camera options and rivals in the market, competition is fierce.

Canon expects that most users who will profit from their TPM blend are personal camera users, but there is also a notable professional photographer customer base.

Canon Inc. is unable to engage in price negotiations with two specific groups of individuals because their tendency to buy cameras in small quantities weakens their bargaining power. Although these groups have the option to purchase from another brand, if they collectively decide to stop buying Canon's cameras, their bargaining position will become stronger and they will be able to exert influence on Canon. Regrettably, there is no list available for Canon Inc. that identifies suppliers and their respective bargaining positions.

Canon considers the information regarding their suppliers to be private and sensitive. While they cannot provide a specific list, they can share general information

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about their suppliers. Canon operates under the Philosophy-Kyosei, which aims to benefit employees, shareholders, customers, and host communities through mutual understanding. The company believes in doing business fairly and building a relationship of trust with their suppliers, guided by this philosophy.

Canon's bargaining position with suppliers depends on the specific nature and difficulty of the product in question. If a supplier offers a unique and intricate product, they hold a favorable bargaining position and may even pose a threat. General suppliers, on the other hand, have a weaker position and Canon can easily switch to other options. As for new entrants in the digital camera market, there is low possibility due to high capital requirements and existing competition. This makes it risky to break into the market, ultimately resulting in a low threat to Canon.

Established technology companies like Philips may be entering the digital camera market. Cameras are presently the sole option for capturing a digital or analog depiction of reality, leading to low substitute probability. Although 3D images and holograms may eventually supplement 2D photos, they aren't projected to have significant impact on the market for at least ten years.

During market size analysis, the focus is on evaluating the number of customers, revenues, and profits. While it's impossible to determine an exact figure for customers, there exists a considerable potential customer pool for digital cameras. In fact, nearly every affluent household could be a prospective user. Referencing Table 3.1 provides insight into Canon's 2006 earnings and gains.

The revenue for cameras in U.S. dollars is displayed in Table 3.1 and amounts to $10,111,079.

Cameras constitute about 25.7% of Canon Inc.'s overall sales, generating an operational

profit worth $2,696,719 US dollars. Despite representing a smaller share in sales, this segment accounts for roughly 40% of the company's total profit - indicating a comparatively higher proportion. The reason behind such profitability can be traced back to lower costs.

The efficient production of cameras results in lower costs and contributes to market growth. To analyze the market growth, one can compare the revenues and profits of 2007 to those of the previous year.

Table 3.2 displays both 2007 and 2006 data using Yen as currency. The table shows a revenue growth of 10.6% for 2007.

This year's profit growth of 14.%, despite being lower than the growth in 2006 (table 3.3), is still higher than the profit growth achieved in 2006. Canon has been improving their production technology, which has resulted in cost-saving solutions that have contributed to this success. See table 3 for more information.

Canon needs to thoroughly assess market trends to be prepared for changing demands. The following are key trends in the camera market: the demand for slim, pocket-sized cameras with advanced features is on the rise. Customers desire digital cameras with many features, such as high pixel count, wide-angle capture, and image stabilization. Manufacturers are including such features in pocket-sized cameras to make them more appealing to consumers.

An examination of the positioning of the TPM combination will be carried out through utilization of the BCG growth-share matrix. The digital camera sector is considered to be a hybrid of a star close to becoming a cash cow, as a result of its elevated market growth rate. Canon persists as one of the key contenders in this area and retains substantial possibilities

for creativity despite saturation within the industry caused by high ownership levels.

Canon maintains its position as one of the top market leaders, despite a reduction in market growth rate, and possesses a considerable market share. Consequently, cameras are projected to produce consistent profits. Figure 3.1 from www displays the TPM combination's placement.

According to's BCG matrix article from 24-09-2008, the digital camera market is currently quite attractive for Canon and other established companies. However, for newcomers, the market is extremely uninviting due to high competition. As time passes and consumers become more saturated with options, market attractiveness will decrease. While new camera products will continue to be developed, consumers may question whether it is worth trading in their current camera for a new model.

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