Corporate planning has long been used by Canon Inc. One of the reasons for the excellent performance of the company is the quality of the strategies which was formulated through its corporate planning process. Intensive planning involving in-house development and resource structure strengthening is associated with the introduction of every new product. The corporate plan has two parts: the long-range strategy and the medium-range plan. The management uses a computer simulation to model future results of their long-range strategy and medium-range plans as it also puts together other sub-systems of the total corporate plan.
Canon's strategies have been very effective in balancing growth of market share with profitability. Cannon's strategic challenges involved identifying the markets in which it intended to compete and developing competitive advantages to allow the firm to balance market share and profitability growth within these markets.
The strategic planning¹ process at Canon appears to have relied on a SWOT analysis² to identify opportunities and threats, and the internal strengths and weaknesses of the firm that would allow it take advantage of the opportunities and avoid the threats.
In 1996-2000, Canon’s focus on total optimization (making the most of its products) and profits, and a strong financial structure through cash flow management and the selection and concentration of business areas, a new corporate mindset was set. In 2001-2005, Canon aimed to become No.1 in all major business areas, so Canon kept the company in step with technological trends and strengthen product competitiveness through such measures as a shift to digital products. In 2006-2010, Canon aims to further strengthen its business constitution through such efforts as total supply chain management. Through the plan, Canon strives to become a truly excellent global company, joining the ranks of the world's top 100 companies.
¹Strategic Planning: The managerial process of creating and maintaining a fit between the organization’s objectives and resources and the evolving market opportunities.
²SWOT Analysis: Identifying internal Strengths (S) and Weaknesses (W) and also examining external Opportunities (O) and Threats (T).
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