The days of producing cheap cameras and printers is a thing of the past for Canon, with its CEO recently stating the completion of a 14-year mission to transform the business into a high-value-added industry.
"We have changed the industry that used to make cheap cameras and cheap printers," said Fujio Mitarai, CEO and chairman of Canon.
His strategy came to prominence in the Japanese media, following Canon's improved financial results due to the weaker yen, when he noted that Canon planned to bring its main factory back to Japan.
"The company has never produced high-end SLR cameras overseas," he told Tokyo Keizai Online (machine translated). "Domestic production has continued by streamlining and automating processes. Meanwhile, this year it closed a factory in China that was making the cheapest low-end cameras."
Mitarai explains that his new "foreign exchange policy" unites two key factors: Firstly that the depreciating yen makes it advantageous to export products from Japan, especially when focused on high-added-value products.
Secondly, and related, chasing low-value products that rely on cheap overseas production will always leave the company at the mercy of exchange rate fluctuations. Hence, streamlining and centralizing production in Japan.
This has also been driven by changes and declines in the core businesses in which Canon specializes.
"With the IT revolution (since the 2000s) and the advent of smartphones, cheap cameras were wiped out. Sales of Canon cameras have fallen by a third. Despite having the top market share, sales are steadily declining. This was my first experience. The move to the cloud has led to a shift to paperless operations, and printers and office machines have also been affected.
"Based on this experience, we have aimed to change the business structure, thinking that we must change the big trend. By telling all employees that 'change is evolution, transformation is progress,' we have changed the industry that used to make cheap cameras and cheap printers."
This paints an interesting picture for Canon's future. Obviously, there will always be entry-level products when it comes to cameras and printers. However, there is no doubt that the company is shifting resources toward the big ticket items – rather than cutting costs by making cheaper products in countries with cheaper labor.
We highly recommend reading the full interview (for which you'll need to create an account), which goes into everything from Canon's investment in surveillance cameras to its heritage as a company with lifetime employees (with a culture where all executives go to work at 6:50 am!).