Strategy Session: Canon—Improving People’s Lives with Leading-Edge Technology

Strategy Session: Canon—Improving People’s Lives with Leading-Edge Technology

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It has certainly been an interesting few years for the camera side of the imaging industry. The category has seen a recent explosion of new, exciting products, including the Canon EOS R full-frame mirrorless camera.

I had the pleasure of sitting down with Kazuto “Kevin” Ogawa, the recently appointed president and COO of Canon USA, Inc., and head of the Imaging Technologies & Communications Group, as well as Eliott Peck, executive vice president and general manager of the Imaging Technologies & Communications Group.

We spoke about the current state of the imaging industry and about the strategic moves Canon has made over the last few years to strengthen their position in the market.

While Ogawa recently joined Canon USA, he has been with Canon Inc. in various capacities since 1981, including in Japan, Singapore, Hong Kong, China and Canada. Most recently, he was executive vice president of Canon China, where he supervised the entire Asian market.

Eliott Peck is a 40-year Canon veteran. He has served in many capacities within Canon USA.

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Eliott Peck and Kevin Ogawa
JG: Kevin, you certainly have had an illustrious career with Canon, and it took you a long time to make it to the USA! As a longtime employee of Canon who has experienced the power of the Canon brand all over the world, what do you think the Canon brand stands for?

KO: Canon is well trusted and well received throughout the world, and the bottom line is to continue delighting the customer through our leading technologies. Sometimes people recognize Canon as a technology company. But technology has to be made with a customer-first mindset, whether for a home or office environment.

Canon is certainly a technology company, but doesn’t it primarily operate as an imaging company?

KO: Canon has consistently delivered leading-edge technologies in many industries all over the world, and not just in photography. We are involved in commercial printing, the security camera industry and, of course, the medical industry. In each case, our technologies and solutions affect and hopefully improve people’s lives, which is a core value of Canon.

Of course, photography is a core business for Canon, and we are a dominant player. But all in all, these many industries create a full image of our brand.

At CES, Canon’s focus over the last few years was less on products and more on partnerships, which is very unique. Is this the main focus of your company now?

EP: The imaging industry over the last five years has experienced a decline. We thought it was important to define what imaging really is today. As Kevin said, we are a technology company. With our expertise in optics and sensors, we look to leverage that into nontraditional imaging businesses.Canon-Logo-new

KO: In the IoT era, singular technologies can help others, so partnerships are mutually beneficial. Importantly, we don’t see this as disruptive to the traditional business but rather as incremental opportunities.

Of course, you have established yourself as a trusted brand.

EP: Our business card is a powerful business tool. We never have to explain what Canon is; but we need to explain our capabilities beyond what people think.

What surprises people about Canon?

EP: I think people are genuinely impressed with the breadth of our offerings and the depth of our commitment to technology, well beyond the imaging industry.

Let’s switch gears to the mirrorless market. You recently introduced the Canon EOS R. Now it appears that Canon, Nikon and Sony are ready to do battle in this market. What do you think of the category, and why did Canon wait so long to make a serious move?

KO: First of all, we look at the full line of our business to satisfy customer demand. Whether it’s mirrorless, full frame, DSLR or point and shoot, we want to be the best imaging device providers, for the professional to the novice user. So we are always trying to find the most suitable technologies to satisfy the end user. Mirrorless has its advantages, as do DSLRs and even point and shoots. In addition to the camera bodies, we have to figure out the best optics to fuel the best output.

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Canon EOS R

Mirrorless is certainly a growing opportunity. More competitors launching mirrorless models has created a big buzz in the industry, which is good for everyone.

Photo specialty dealers are certainly feeling good about the expansion of mirrorless. It gives customers a new reason to walk into their stores.

EP: We’ve gone through cycles of ups and downs in this industry. Through all of those times, you’ve seen the industry lift up, which helps everybody. Now, we have an opportunity to do it again, with a new, younger market—the YouTubers and bloggers. They represent totally new markets for us. If you can tap into a market that has traditionally not used cameras before, then you can grow the overall market. Different cameras will appeal to different customers and different needs. So everyone wins.

You believe this younger customer you mentioned will grow the market?

EP: Yes, but their perception of brands is very different. They align themselves with products and technologies, but not necessarily with brands.

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Canon USA, Melville, New York
You’re also looking at a non-brand loyal customer?

EP: You now have an opportunity with the undecided. We know they’re passionate about imaging, but the reason for imaging is very different. It’s about their lifestyle and their story, not as much about the technology. I think the opportunity is to create products that help them.

Is the smartphone a friend or a foe of our industry?

KO: Nowadays, the smartphone is the hub of daily life, and in a way it is a tool for the expansion of the photo industry. In terms of business, how do we cultivate the younger generation to be interested in the photos they’re taking and in high-tech products that expand their enjoyment?

Thanks to the smartphone, the frequency of the shutter is tremendously increasing. Ten to 15 years ago, no one took photos of their food! Now they all take photos of it. Canon wants to provide the most suitable devices for them, whether it’s mirrorless, DSLRs or whatever. In that sense, smartphones are not the enemy; they are really more like a friend.

Twenty years ago 12 and 14 year olds did not take pictures. Do we all now have to figure out how to take their enthusiasm and hope they say, “Now that I’m a photographer, I want to become a better photographer.”?

KO: Yes, YouTubers now are competing for the quality of their photos and their movies. That’s what we want them to care about, rather than the speed of getting their images online. We have data that shows that smartphone images are getting better and better, and customers want to take better pictures, including better video.

Let’s talk about the retailers. As you know, I’m an advocate for the photo specialty dealer. Sometimes they feel like a stepchild to the mass market. They feel they don’t get respected, and they don’t feel like they can make money due to cash flow issues. Retailers want manufacturers to appreciate that they’re small businesses that struggle with cash flow more than anything. They appreciate the power of your brand, but they’re trying to make ends meet. What are they doing well and what can they, and you, do better?

KO: As proof of our commitment since I arrived, we held a dealer meeting here in Melville. In addition, I visited several retailers. I wanted to show our commitment to these valuable partners.

The most successful among them have a few things in common. User engagement is certainly their biggest advantage, as well as expanded educational facilities. They are best at providing additional value, which differentiates them from online retailers. We consider them to be true business partners. At Canon, we can provide solutions for them that go beyond selling our cameras. For example, we offer printing solutions they can provide to end users. We plan to strengthen the relationships with them, and we’re going to invest in this channel.

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Canon Pixma TS702 Compact

EP: Canon is very clear how important this channel is, because they are the front line to the end user. We understand the challenges they face, with consumers walking into a specialty store only to buy somewhere else. But we work very hard to provide value elements to dealers.

For example, if you look at the pure profit you get from hardware, it’s thin for everyone. But we offer value in our CarePak, our service and support operations, our education operations and our printing operations. We want to continue to provide extra value.

You’ve always been a leader with professional photographers.

KO: Yes, and Canon Professional Services (CPS) is key for keeping our leadership position. We have the number one market share, and service and support is critical for that market. While the current program is working well, we are always looking for ways to strengthen it. There are also some worldwide events on the horizon, which will enable us to continue to gain feedback from our pros.

Pro’s like to offer suggestions, don’t they?

KO: Of course! In general, our engineers always used to work in the headquarters offices. But now we’re bringing them to the front lines to discuss our products with the pros and end users. That feedback is very essential; it’s good for us and them.

EP: That’s how Cinema EOS was born; it was direct feedback from the users. We had 5D Mark IIs in the field, and the pros thought it was amazing. But they said if it “only did this and that,” you could enter a new market and give people more capabilities in the cinema world. So that feedback encouraged us to enter and expand the market.

What’s new on the Cinema EOS front?

KO: We’re seeing changes on how content is delivered. Right now Netflix is one of the largest providers of new content. Before, it was primarily ABC, CBS, NBC and FOX. However, 4K products have to meet certain specifications to be certified by Netflix. And Netflix just announced that our cinema products are now certified for 4K content. Of course, all of this new original content creates opportunities to expand the market.

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Canon Cinema EOS C300
It sounds like you’re listening to the market and responding. How is Canon different now than it was five years ago? How will it be different five years from now?

KO: We have four key pillars for growth: commercial printing, security cameras, medical equipment and industrial equipment. Recently, we made acquisitions that enabled us to become strong players in those markets. However, we’re committed to the imaging industry and devices, as well as to multifunctional products like inkjet printers and copiers—our core businesses. We are trying to expand on top of our core business with these four pillars.

Kevin, what keeps you up at night?

KO: I was quite pleased having the opportunity to work in so many different countries and regions all over the world. I’m happy to finally have made it to the United States. To be frank, seeing the smiling faces of the employees here is very motivating for me. Delighting customers and stakeholders, which includes employees, allows me to sleep very well.

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