FOREIGN TRADE UNIVERSITY ANALYSIS OF STRATEGY OF TRANSNATIONAL CORPORATION (TNC) OPERATING IN VIETNAM HANOI September 26, 2012 Contents Group members: Part I An introduction- Background to TNC's road to Internationalism History of Canon Corporation a Canon’s corporate philosophy b Characteristics and the establishment of Canon Inc Canon’s major sectors of operation Results of Canon’s business activities during the last three years a Awards and prizes b Assessment about the key performance of Canon Corporation in the period 2009 – 2011 Analysis of choice of foreign market Part II Business strategies of Canon in Vietnam External analysis a Macro-environment analysis b Industry analysis c Some highlights of Canon: 14 Analysis of strategies issues of Canon in Vietnam 14 a International strategies of Canon in Vietnam 14 b Business strategy of Canon in Vietnam 15 i Corporate- level strategy: 16 ii Business- level strategy 17 c Organizational structure of Canon in Vietnam 20 d Modes of market entry 23 e Performance of Canon, Inc 25 Part III Conclusion and recommendation 29 Conclusion 29 Recommendation 29 References 31 Group members: Class: Strategic Management – QTRE312.1 Nguyễn Thanh Hà - 0953040105 In charge of: 2a, 2b – Part 2 Nguyễn Thanh Thúy – 0953040082 In charge of: Part and 1a of Part Bành Ngọc Hà – 1001030109 In charge of: 2c, 2d, 2e of Part Đỗ Thị Mai – 0952050035 In charge of: 1b of Part and Part Part I An introduction- Background to TNC's road to Internationalism History of Canon Corporation a Canon’s corporate philosophy What is the meaning of “Canon”? It means “original, official” which shows the source of bright beginning for a prosperous future Therefore, it is easy to understand the reason why Canon Corporation chose this name The corporate philosophy of Canon is kyosei A concise definition of this word would be “Living and working together for the common good” but our definition is broader: “All people, regardless of race, religion or culture, harmoniously living and working together into the future ” Unfortunately, the presence of imbalances in our world in such areas as trade, income levels and the environment hinders the achievement of kyosei Through corporate activities based on kyosei, Canon strives to resolve imbalances in the world Truly global companies must foster good relations, not only with their customers and the communities in which they operate, but also with nations and the environment They must also bear the responsibility for the impact of their activities on society For this reason, Canon's goal is to contribute to global prosperity and the well-being of mankind, which will lead to continuing growth and bring the world closer to achieving kyosei b Characteristics and the establishment of Canon Inc Canon Inc (Kiyanon kabushiki-gaisha) is a Japanese multinational corporation that specializes in the manufacture of imaging and optical products The company was originally founded by Goro Yoshida Its headquarters are located in Ōta, Tokyo, Japan Canon had a modest beginning in a small room, where young people with a big dream sprang up a great number of creative ideas and earnestly began their work on producing a high-quality Japanese camera, marking the beginning of Canon In 1933, a small laboratory dedicated to making high-quality cameras was set up in a simple apartment room in the Roppongi area of Tokyo At the time, all high-quality cameras were European with the majority coming from Germany Through hard work and with an enterprising spirit, in 1934, they eventually succeeded in building a prototype, which was named Kwanon after the Buddhist goddess of mercy One year later, they produced a prototype for Japan’s first-ever 35 mm camera with a focal plane shutter During these first years the company did not have the facilities to produce their own optical glass, so the first cameras came with Nikkor lenses from Nippon Kogaku K.K (the later Nikon Corporation ) In 1947 the company name was changed to Canon and the first own Serenar lenses were made Canon’s major sectors of operation The industry that Canon operates within is an environment which needs creativeness, nonstop changes, high responsibilities to accomplish the task as well as contribute to the performance of the company’s whole system Canon is a Japanese company that meets all these requirements There are three major sectors of operation that Canon focuses on: Consumers’ products Digital single lens reflex cameras Compact digital cameras Office’s products Office network multifunction devices Laser printers Digital camcorders Lens for SLR cameras Compact photo printers Multifunction inkjet printers Inkjet printers Commercial photo printers Multimedia projectors Images scanners Network cameras Laser multifunction devices Solution software Toner cartridges Digital production printers Large – format inkjet printers Broadcast equipment Industry and others’ products LCD lithography systems Semiconductor lithography systems Ophthalmic equipment Digital radiography systems Document scanners Handy terminals Color label / Card printers Personal information products Components Die bonders Organic LED panel manufacturing equipment Vacuum thin-film deposition equipment However, the percentage is unequal among these sectors Canon Corporation shows the biggest concern with the office’s products, which accounts for about 56% of total products The second is customers’ products that makes up for approximately 39% and a very small number of products (5%) belong to industry and other fields Because of a limited time to accomplish the assignment, our group only focus on “camera” - one of the most typical products of Canon Results of Canon’s business activities during the last three years a Awards and prizes Year 2009 Awards and prizes The image-PROGRAF iPF755 received the Buyers Laboratory Inc Pick of the Year award in the "Outstanding Wide-Format Color Inkjet Multipurpose" Category Images The EOS 5D Mark II and EOS Rebel XSi received the 2009 "Hot One Award" for best digital SLR $1,000 $3,000 and best digital SLR under $1,000, respectively 2010 Canon has been selected by Business Solutions Magazine (BSM) as one of the best channel vendors The awards were for: Image-PROGRAF iPF650 Image-PROGRAF iPF510 Image-PROGRAF iPF710 Image-PROGRAF iPF610 Canon was awarded “Outstanding achievement in the advancement of the art and science of video technology” by 2010 NAB Best of Show Black Diamond Award with products: XF300 XF305 The EOS 7D was named the 2010 Hot One Award recipient in the Digital SLR category between $1,000 $3,000 2011 Canon received 2011 BERTL's Best Award for products: Image-PROGRAF iPF8300S Image-PROGRAF iPF6300S For the 8th year in a row, Canon U.S.A is proud to have received the 2011 Readers' Choice Award for Service & Reliability from PCMag.com for Printers PIXMA Pro9000 Mark II PIXMA Pro9500 Mark II 2012 The Canon Power-Shot G1 X has received the "Best Expert Compact Camera" from the Technical Image Press Association (TIPA) The PIXMA PRO-1 received the 2012 DP Review Gold Award b Assessment about the key performance of Canon Corporation in the period 2009 – 2011 KEY PERFORMANCE INDICATORS Net sales (Millions of yen) Gross profit to net sales ratio R&D expense to net sales ratio Operating profit to net sales ratio Inventory turnover measured in days Debt to total assets ratio 2011 3,557,433 48.8% 8.7% 10.6% 46days 0.3% 2010 3,706,901 48.1% 8.5% 10.5% 35days 0.3% 2009 3,209,201 44.5% 9.5% 6.8% 39days 0.3% Canon’s stockholder equity to total assets ratio 64.9% 66.4% 69.9% Analysis of choice of foreign market A corporation which wants to develop and rapidly become the market leader in a competitive environment will have to expand the scale in all over the world by opening more branches in other countries to dominate and gain more market shares than its competitors Canon just began from a small room, but how it quickly developed and became one of the market leaders in imaging and optical technique industry? One of the reasons is that Canon has a good choice of opening branches in foreign market Canon focuses on the Asian market which has most of the developing countries Take China and India as an example Although they are developing countries, they have the prominent development of technology, the hardship and creativeness of employees who require low salaries as well as the stable politics, which makes a good condition for Canon to improve and diversify its products, gain the achievements as well as expand its impact on foreign market Why did Canon choose Vietnam to open branches and invest? There are some main reasons: First, the convenience of geographical area is one of the reasons Canon choose to develop in Vietnam Vietnam has the near distance with Japan, directions adjacent to other Asian countries and a long coastline which is easy to penetrate Second, Vietnam has a stable political environment, the Government encourages to developing the technical industry and willing facilitating to this industry Third, Vietnam economy is in development stage, if Canon invests in Vietnam market, it may easily spread and introduce its products to domestic customers to enhance its reputation and raise profit Fourth, the nature of Vietnam people is industrious and creative, which can contribute to the productivity of Canon and spring up more new ideas to diversify products and shorten time to produce one unit of products Fifth, the technology of Vietnam is still being improved and needs to apply foreign technology, so Canon may quickly penetrate to Vietnam Production line and make chance to widespread the high quality products to Vietnam market Part II Business strategies of Canon in Vietnam External analysis a Macro-environment analysis There are lots of macro-environment factors that may impact on the reason why Canon chooses to open branches to develop in Vietnam and how Canon carries out the business strategy in Vietnam market We should focus on four main factors: Political Economic, Social and Technological which clearly and directly affect the performance of Canon in Vietnam Political : Vietnam is a peaceful country (ranking 39 out of 144 in 2009) which has a very stable political environment, low risk of military conflicts Political stability is one of the main factors that have helped Vietnam pursue its economic development policy Since 1990, most other regional countries, except Singapore, have experienced coup d’etats or political crises Meanwhile Vietnam has achieved political stability – factors that enable Vietnam go ahead with its renewal process Besides, Vietnam also has nearly lowest protection of intellectual property We cannot deny the fact that Vietnam has come a long way in protecting intellectual property To join the World Trade Organization, Vietnam was required to meet international standards of IP protection It passed the new IP Law in 2006 and adopted the Berne Convention on copyrights, for example The result is that today Vietnam has relatively comprehensive set of laws covering most aspects of IP rights However, the protection of intellectual property is still low For example, somewhere around 90% of all software is still pirated according to the Business Software Alliance (compared to an average of 55% in the Asia Pacific region) In addition, Vietnam has the high encouragement of trading partners, encouraging tax incentives for technical companies; the minimum wage is much lower than the technical industry standard and Vietnam also gives priorities to international companies in Vietnam When choosing Vietnam to set up branches, Canon takes lots of advantages and easily penetrates Vietnam market Economic: Vietnam's economic system is gradually out into the global system and gradually improves because of the commitment of Vietnam to WTO in 2007 Vietnam also has a stable exchange rate and the facility is gradually developed as well as more advanced Vietnam has gained considerable economic development for over the last 20 years For example, since 1990, Vietnam’s economy has made amazing progress with annual average growth of 7.5 percent Even when many Southeast Asian countries were damaged by the Asian economic crisis in 1997-1998, the country’s economy still kept growing In 1999 its economic growth rate reached 4.5 percent while other Southeast Asian countries, such as Thailand and Indonesia fell into crisis The growth rate can be attributed to the consistent economic policy of integrating gradually into the global economy in line with the situation in Vietnam In addition, Vietnam has maintained its macro-economic policy for 20 years, in which it has reduced public debt and the inflation rate, ensuring a balance budget and controlling the amount of currency in circulation Besides, most of Vietnam’s organizations are newly-built; the workforce is young, enthusiastic, hard-working, creative and skilled Then more employees are properly being trained for specific and professional work It can be proved by the following facts: • Almost two thirds of respondents are from privately owned organizations, and • around half of the organizations have been in operation for more than ten years On average around four in ten employees are aged between 16 – 25, meaning that • significant proportion of the Vietnamese workforce can be classified as being “young” Levels of professional and technical training amongst staff tended to be polarized • • between low and high with more than half having little or no training and more than quarter being University graduates The average salary of an employee in this survey is 2.4 million dong per month Staff numbers and training budgets are both projected to rise in the next three years However, the workforce management of Vietnam is in relatively low quality because of a shortage of trainers, the fear of losing staff after training and the lack of government legislation to help organizations retain staff Canon can easily apply its management and controls the operating activities of companies as well as exploit the capabilities of the workforce in the country In addition, the labor costs cheaper than other countries Highspeed economic development for many years also creates favorable conditions for Canon to introduce its products in the Vietnamese market It can be said that the Vietnamese a convenient market so that Canon can back up its position in world market Social: young people expect the global economic exchange The more percentage of people quickly access to the high quality and advanced technology that Canon brings to Vietnam Vietnamese people have high mental development to improve quality of life, higher job responsibility which is suitable for the working style of Canon Technology: Technology of Vietnam is poor, limited and on track to improve and develop Although Vietnam has gained some achievements since becoming a member of WTO, Vietnam still ranks behind many other developing countries in technology field Looking at the survey results and the World Economic Forum’s ranking in terms of technology innovation, there is clearly a large gap in technology between Vietnam, and Thailand and China Vietnam Thailand Technology Index 92 43 Technology innovation index 79 37 China 62 70 Information and communication index Technology transfer index 86 55 66 62 37 Among the indices, Thailand is most successful in technology transfer, ranking 43rd while Vietnam comes 92nd This requires Vietnam to make further efforts in technology investment and renewal Therefore, Vietnamese workers will quickly absorb into Canon’s advanced technology and promote the advantages of this high technology In addition, Vietnam has more and more skilled, creative and enthusiastic engineers who can help to develop new ideas in order to diversify products, save time and increase the productivity b Industry analysis It is very important to determine the industry analysis to appreciate the strengths and weaknesses of Canon Inc in several external factors Based on the result of industry analysis, we will have more understanding about the factors affect to Canon in running business all over the world and particularly in Vietnam An industry analysis consists of three major elements: the underlying forces at work in the industry; the overall attractiveness of the industry; and the critical factors that determine a company's success within the industry In case of Canon Inc., we also focus on those contents to determine how management team of company could make Canon Inc more competitive with the others • INDUSTRY FORCES The most important thing that we mention here is the effect of Porter’s five forces model influence to Canon Inc widely market including the potential of new competitors to enter the market, the bargaining power of buyers and suppliers, the availability of substitute goods, the competitors and the nature of competition  New entrants: The history of camera market shows that the first camera was built in 1685, and then people knew more about the other brand-Kodak with by film camera version, but there are more brands were established and ran their business in the market and they also own a lot of competitive advantages As we mentioned above, Canon Inc introduced their first camera in 1934 and became one of Japan first-ever camera However, they are not the first company who produced lenses for those products instead of Nikon At previous decades, the camera market was known as the owner of three big brands including Kodak, Canon, and Nikon Nowadays, with the development of market, there are more brands enter the market and promissory to become threatening competitors of those old brands However, in fact, we In Vietnam, the differentiation strategy of Canon is often applied, for example, launching camera products with high technology that be suitable for Vietnamese’s preference such as DIGIC image processor…"At Canon, we always listen to every thought and consumers’ need to be able to bring the best products that consumers want and welcome We always wanted to bring the Vietnamese consumers the most comprehensive imaging solution The past years, Canon has been non-stop efforts in research activities and development to bring our customers products with the most advanced technology Besides, we also prioritize application of simple features, and stylish designs when developing new products And I hope that Canon's new products will become your companion to help users save the most precious moments” - Mr Nomura Shimao, Chief Representative of Canon in Vietnam said The following extraordinary products of Canon launched into Vietnam market is one of clearest evidences in the differentiation strategy of Canon Debut Digic and latest features integrated in Canon new cameras Ho Chi Minh City, November, 2011, Canon, the leader in digital imaging, announced the launch of its new products in the second half of 2011, consisting of new digital cameras and Inkjet printers In order to carter for the growing demand of users for innovative technology, Canon introduced the DIGIC image processor first time in Vietnam market while improving other functions of its camera, including HS System, Full HD Video capture, High speed Burst HQ and Intelligent IS On this occasion, Canon also highlighted its Inkjet printer PIXMA E500 – the low cost all in one color printer As the year end was around the corner, the shopping spree was reaching its peak That's why Canon introduced a series of new technology products which ensure to meet the high demand of customers for high-end cameras and printers Newly rolled out cameras include PowerShot S100, SX40 HS, SX150 IS, IXUS 1100 HS and IXUS 230 HS A challenging task for any professional and amateur photographer is working under low-light conditions Helping improve the quality of images from these situations is Canon's HS System, where the camera's image processor and high-sensitivity image sensor work in tandem to enhance low-light image quality With the PowerShot S100 and SX40 HS, Canon has introduced a new DIDIC image processor, maintaining the camera's superb low-light image quality while improving overall camera operation and color accuracy The new image 18 processor has improved noise reduction and advanced Multi-area White Balance optimizing color tones of both subject and background under multiple light sources An added benefit of the DIGIC image processor is the incorporation of the new High-speed Burst HQ providing users with the ability to continuously capture a maximum of eight frames Besides, Canon has taken the Image Stabilization (IS) technology one step further with the new Intelligent IS which automatically chooses from six different modes (Normal, Macro, Panning, Dynamic, Powered, Tripod) to optimize image stabilization and help achieve crisp, blur-free images for various shooting conditions Coming to users in more stylish and colorful bodies, the IXUS 230 HS packs a powerful Canon lens into a thin metal body with a range of leading features At the same time, users who are a fan of HD movie can find themselves in love with Canon PowerShot S100 with Stunning Full HD (1080p) video captured at 24 frames per second with stereo sound "Super Cool" EOS M and 650D Cameras August 31th 2012, at Vietnam Consumer Digital World Expo 2012, Canon Marketing Vietnam Company Limited brought an extraordinary experience for its customers through a comprehensive series of sophisticated products and high-tech solutions, ranging from compact cameras, professional cameras, lens, and camcorders to mono-functional, multifunctional ink-jet printers, compact photo printers and scanners The event marks an important step in fulfilling Canon Marketing Vietnam's goal of expanding the market after its recent establishment By dint of understanding the demands of Vietnamese, especially the young, Canon renews and enhances ceaselessly its products when researching that almost Vietnamese enjoy the fashionable and convenient cameras which have famous brand in the globe Therefore, as a strategic product in the launch, the first mirror less interchangeable lens camera called EOS M will make users be surprised The biggest breakthrough of the EOS M lies in Canon's ability to integrate an EOS system into a compact body, with full compatibility to more than 60 new and existing EF and EF-S lenses Furthermore, to prevent under-exposed shots in poor lighting conditions, EOS M is equipped with an Auto Lighting Optimizer system and especially the HDR Backlight Compensation function– taking three images in three different exposure levels then merging and automatically aligning it within the camera to create perfect images with all details and highlights optimized 19 While mobile solutions such as wireless connection or the Vietnamese interface language are highlighted as remarkable features of compact IXUS camera range to easily share photos onto social networks, the convenience and flexibility of Canon EOS 650D's LCD lies in multitouch screen, even for first-time users The most outstanding products are legendary camera lines such as EOS 1DX and EOS 5D Mark III with cinematic standards, smart and automatic features and new light-metering sensor technology which help produce sharp and clear images Besides, Canon's huge collection of spectacular lenses and accessories is also presented and displayed at the event c Organizational structure of Canon in Vietnam Canon Inc had built a branch in Vietnam since 2001 and started operating in 2002 Firstly, Canon had operating representative offices: one in Hanoi (started in January 2003) and the other in Ho Chi Minh City (started in January 2004 In May 2002, Canon established the first assembly production in Vietnam which is located in Thang Long industrial zone After 11 years of development, Canon Vietnam now has factories which are Thang Long factory, Que Vo factory and Tien Son factory The headquarters is at Thang Long factory With factories, Canon runs a divisional departmentalization which is illustrated as the following chart: Canon Vietnam Managing Director Thang Long Industial Park Specialised in Ink Jet Printers Que Vo Industrial Park Specialised in New laser printer Tien Son Industrial Park Secialised in large ink jet printers Canon Vietnam has a managing board of directors which control the general operating in Vietnam These divisional structure groups departments together based on organizational outputs Each of factories runs all of its departments: R&D, finance, manufacturing This 20 kind of organizational structure has many advantages Firstly, this structure helps each divisions focus on its assembly production then maximize the productivity For example, Que Vo factory was built on the area of 20 with the investment capital of US$50 million, with the maximum capacity of million laser printers per year Besides, following divisional departmentalization gives each factory opportunities to practice management skills and improve human resources more effectively Especially, each division can emphasis on its product and goals Team building for Vietnam Canon workers on sport day Training at assembly production for workers However, departmentalization contains several disadvantages such as duplication of resources across divisions, poor coordination across divisions For more details about organizational structure of Canon Vietnam, there is another perspective we can consider It is job-classified structure 21 Direct with production Plan section Project section Indirect with production Job-classified structure specifies detailed missions for each section therefore improve the management of the whole company During the time of 2002 and 2011, Canon Vietnam did not have official marketing department or company and its own distribution channel The only authorized distributor of Canon in Vietnam is Le Bao Minh Company which is in charge of distributing Canon products, warranty support and carrying out marketing strategies Until now, Le Bao Minh Canon has 15-year experiences of promoting Canon brand in Vietnam However, in August 2012, Canon Asia marketing group and Canon Singapore Ltd announced the establishment of Canon Marketing Vietnam Company Limited, a new Canon 22 marketing subsidiary in Ho Chi Minh City, Vietnam The new company was established with the aim of creating an import, distribution, sales and service system for Canon products in Vietnam In recent years, Vietnam, which joined the World Trade Organization in January 2007, has made great strides in transitioning to a market economy and integrating into the international economic system In particular, through the government's economic open-door policy and domestic-demand expansion policies, Vietnam has achieved economic growth approaching 6% over the past few years with further expansion expected in the future, which has created a pressing need for Canon to establish a strategic marketing system in the country In response to these circumstances, Canon has newly established Canon Marketing Vietnam Company Limited in Ho Chi Minh City, Vietnam Canon Marketing Vietnam Company Limited will gradually take over the responsibilities currently handled by the existing representative offices in order to develop Canon's presence and services to customers in Vietnam more directly and progressively In addition to existing business segments, through the new marketing company, Canon also aims to further expand its market share within industries such as production printing and motion-picture and broadcasting production “Establishing our own sales company will allow us to better serve our customers as we are able to support Le Bao Minh and dealers much more in the areas of sales, marketing and service,” said Hideki Ozawa, president of Canon Asia Marketing Group d Modes of market entry • The period of 1980s Canon products first appeared in Vietnam in 1980s through authorized distribution channels and individual dealers At that time, Vietnam economic had just been defined for years 23 after the whole country unification Economic environment was so poor and underdeveloped At that beginning, Canon gained the first-mover advantage in Vietnam market and built the brand consciousness of Vietnamese consumers However, all Canon products were imported to Vietnam The profit margin was still low and sale volumes were not large Even though Canon could avoid the costs of establishing manufacturing operations, Canon had to stand high transport costs and tariff barriers of Vietnam market • The period of 2000 – 2011 The establishment of Canon Vietnam Company in 2001 marked a big change of Canon strategy in Vietnam The operation of Canon factories implies the pursuit of wholly owned subsidiaries mode of entry All Canon factories were built by 100% capital of Canon Global and Canon Asia There are main factors that can support Canon on this mode of entry Firstly, Canon owns the significant technological know-how in the world and Canon financial capacity is strong to build and operate its own subsidiaries in the world Canon Inc has invested 300 million USD in Vietnam to build assembly productions with the expectation of billion USD exports According to the US Patent and Trademark Office, Canon is the third position of top ten U.S patent holders by company 2011 It shows the technological strength of Canon Inc 24 Canon has totally 277 consolidated subsidiaries in the world with nearly 200000 employees A typical illustration of Canon strong financial capacity is that it is ranked 122 nd at global ranking of market capitalization according to Financial Times magazine Beside the advantages of operating wholly owned subsidiaries, this mode of entry is also a challenge of management and controlling for Canon e Performance of Canon, Inc Summary of operations Content Net sales Operating profits Income before income taxes Net income attributable to Canon Inc • Millions of Yen ¥ 2009 3,209,201 217,055 219,355 131,647 2010 3,706,901 387,552 392,863 246,603 2011 3,557,433 378,071 374,524 248,630 Sales 25 3,800,000 Sales of Canon Inc 2009 2011 3,600,000 3,400,000 Sales 3,200,000 3,000,000 2,800,000 2009 2010 2011 Canon’s consolidated net sale in 2011 is 3557433 million yen which is 0.4% decrease compared to 2010’s due to the effects earthquake and floods in Thailand Those sales come almost from office business units which cover 53.9 % of the total sales Coming after office business units is consumer business units (cameras, video recorders ) In term of sales by geographic area, Europe is the largest market of Canon that covers 31.28% of the total sales After Europe, the American market is the second largest market of Canon • Operating profits 26 Operating profits of Canon 450,000 400,000 350,000 300,000 250,000 Operating profits of Canon 200,000 150,000 100,000 50,000 2009 2010 2011 Operating profit in 2011 decreased 2.4% to a total of 378071 million yen from 2010 The ratio of operating profit to net sales increased 0.1% to 10.6% from the fiscal 2010 The major components of operating expenses are payroll, R&D, advertising expenses and other marketing expenses After the effects of earthquake, Canon cuts spending and control expenses more efficiently Therefore, the total operating expenses decreased by 2.6% from 2010 to 2011 that leads to the increase of operating profit in 2011 • Some key performance indicators Net sales (Millions of yen) Gross profit to net sales ratio R&D expense to net sales ratio Operating profit to net sales ratio Inventory turnover measured in days Debt to total assets ratio Canon’s stockholder equity to total assets ratio 2011 3,557,433 48.8% 8.7% 10.6% 46days 0.3% 64.9% 2010 3,706,901 48.1% 8.5% 10.5% 35days 0.3% 66.4% 2009 3,209,201 44.5% 9.5% 6.8% 39days 0.3% 69.9% The Gross profit to net sales ratio of 2009 was 44.5% which was about 4% lower than Gross profit to net sales ratio of 2010 and 2011 while Canon had to pay more R&D expense during 2009 than years later Canon was affected by the economy recession in fiscal 2009 and had the decrease in gross profit as well as operating profit ratios despite the relatively stable revenue After one year of economic recession which caused the decrease of Canon’s performance quality, in 2010, economic conditions continued to improve broadly throughout the world, led by the economic growth of such emerging markets as China and India In 2011, Canon’s performance indicators showed the level-off and insignificant decrease Amid increasing uncertainty in the second half of the year as the pace of recovery decelerated due to economic downturn in the United States and Europe, the economy as a 27 whole continued to grow moderately, primarily driven by emerging economies In the United States, a lack of improvement in employment conditions and housing problems led to a lower rate of growth Emerging markets, such as China and India, maintained a high rate of growth amid concerns over the effects of tight monetary policies In Japan, severe circumstances persisted following the Great East Japan Earthquake in March and, just as production activities began showing signs of recovery Owing to the historically high valuation of the yen combined with the effects of the earthquake and floods, all of Canon’s businesses faced extremely demanding conditions throughout the year Amid this harsh environment, Group-wide efforts to swiftly restore production in the aftermath of the disasters, coupled with efforts to maximize production and boost sales, led to net sales for the year totaling ¥3,557.4 billion, a year-on-year decline of 4.0% Despite the significant negative impact of the strong yen and the effects of the earthquake and floods, the gross profit ratio rose 0.7 points year-on-year to 48.8%, owing to the further acceleration of production innovation activities 28 Part III Conclusion and recommendation Conclusion Summarily, TNC Canon Vietnam has been developed more and more effectively thanks to the efficient management of Canon Global and the favorable technological advantages Recommendation On overall strategy, Canon should build plan to show their representative in almost camera market in order to get higher market shares and attract customers Besides some authorized agencies, Canon also should also focus on some super electronic markets such as Pico, Media, etc with the large number of customers’ attractiveness First of all, we realize that Canon should improve the Cost structure to reduce cost and get better profit from products By integrated supply chain management and concentration on the efficient production of key products elements, Canon could safes a lot of types of cost and the expense for those factors will be as low as their expectation By running multinational strategy in Vietnam market, Canon with their new company and authorized agency should reduce the cost structure in order to get higher profit For each company, market position is one of the main factors which are focused on at the moment of beginning doing business As Canon’s vision and mission, they should consider of running Research and Development tools and also improve Research partnerships to hold the market position Along with the establishing new company in Ho Chi Minh City, Canon should speed up in compare with other companies to get the highest market position in camera market One of the most important factors that Canon must have specific plan for their operations is product Canon has powerful in selling DSLR camera in compare with many others brand such as Nikon, Samsung, Sony… Therefore, they should clearly determine where their target market and strategic products are Canon can continue product development and innovation with its DSLR range to maintain market dominance On the other hand, Canon can focus on some the strategies such as market development and market penetration for its compact digital camera market By using the powerful of customer’s satisfactory in Vietnamese market, Canon should promote their staffs and their customers to attract potential customer 29 30 References http://www.internetslang.com/CANON-meaning-definition.asp http://www.canon.com/about/philosophy/index.html http://en.wikipedia.org/wiki/Canon_%28company%29 http://www.canon.com/products/ http://www.canon.com/about/history/outline.html http://www.canon.com/ir/annual/index.html http://www.usa.canon.com/cusa/professional/news_events?pageKeyCode=awardsHome http://www.chinadaily.com.cn/cndy/2012-08/09/content_15653580.htm http://www.geckoandfly.com/10054/manual-compact-digital-camera-comparison-sony-vs-canon-vsnikon-vs-leica/ http://inventors.about.com/library/inventors/bldigitalcamera.htm http://www.canon.com.vn/personal/news/detail/canon_Debut_digic5?languageCode=EN http://www.canon.com.vn/personal/news/detail/press -vn-marketing?languageCode=EN http://www.sggp.org.vn/kinhte/tugioithieu/2012/7/294400/ http://www.essayscam.org/Forum/11/strategic-analysis-canon-strategic-management-paper-990/ http://sohoa.vnexpress.net/tin-tuc/doi-song-so/canon-thanh-lap-cong-ty-tai-viet-nam1795845.html http://canoncvn.com.vn/en/job_description.html http://canoncvn.com.vn/en/production_stream.html http://vef.vn/2012-01-19-thu-hut-dau-tu-nhin-tu-nhung-du-an-ty-usd Ebook: Strategic Management - An integrated approach - 9th edition 2010 (Charles W.L Hill Gareth R.Jones) 31 ... appearance but also the quality of products and image and creativity There are some Canon camera which are using by professional photographer such as Canon 60D, Canon 5D Mark II, Canon 7D, etc with almost... of Canon Corporation a Canon s corporate philosophy b Characteristics and the establishment of Canon Inc Canon s major sectors of operation Results of Canon s... 2012, Canon Asia Marketing Group and Canon Singapore Pte Ltd announced the establishment of Canon Marketing Vietnam Company Limited (CMV) - a new Canon marketing company in Ho Chi Minh City, Vietnam