Case Study for Canon

Case Study: Canon Takes Aim At Xerox Basic Microeconomics

CASE STUDY Canon Takes Aim At Xerox

By William J. Holstein “Fujio Mitarai turned his copier company into a lean, competitive machine. Now he's invading an American icon's last stronghold.” (FORTUNE Magazine) – When he ran Canon's North American division, Fujio Mitarai enjoyed playing golf with Jack Welch at the Fairfield Country Club in Connecticut. He liked talking business with the then-CEO of General Electric too. "I respected his sense of strategy, his enthusiasm and sense of mission," says Mitarai, who spent 23 years in the U.S. But after Mitarai returned to Japan in 1989 and became president of Canon in 1995, he didn't embrace the GE way. "The management style of Mr. Welch is something that cannot be done in Japan," Mitarai says. "His style at his huge conglomerate was to have frequent acquisitions and disinvestments. That would be difficult for us." A typical Japanese boss in denial about the need for change? Far from it. Mitarai has forged a hybrid management style that embraces the hardheaded American pursuit of profit with traditional Japanese business values. Neutron Jack would be stunned to hear Mitarai pledge a no-layoff policy. "Our company offers lifetime employment" within Japan, Canon's CEO says flatly. But Mitarai has not been shy about smashing together hitherto independent divisions, exiting money-losing product lines such as personal computers and liquid crystal displays, or expanding the scope of merit-based pay. The result: a Japanese company that is intensely competitive despite all the ink spilled over Japan's "lost decade." And now that competitive caliber is being aimed full-bore at the U.S. market--and especially at a troubled icon, Xerox. Mention Canon and most people think cameras. The company remains a world-class maker of both digital and film cameras and camcorders. But the main engine of Canon's business is copiers, printers, and other office equipment, which together...