Technologies that makes dreams become a reality, make the impossible possible, and maintain the global environment and population. Camera industry is not an exception of the involvement which makes life become more meaningful by saving unforgettable memory through wonderful pictures. However, like any industry, digital camera industry gets more competitive nowadays with the new entrants. The goal of this survey is to analysis the macro - environment of the camera industry as well as the makes driving industry competition. In addition, through the opportunities and risks facing firms on the market, some suggestions will be presented
Macro-environment of the camera industry in Japan
Japan is the seventh most populous country in the world after the People's Republic of China, India, America, Indonesia, Brazil and Russia. Based on the Ministry of Internal Affairs of Japan, the populace of Japan in 2009 2009 is 127, 430, 000. Tokyo is the administrative centre of Japan and it is the most populous city with an average density of 13 thousand people per square kilometers. 79% Japanese are in urban that produce Japan become one of the countries with high rates of urban population on the globe. Because industries and services play important role in Japanese market and this sectors are focused in the Tokyo area.
Japanese folks have very special characteristics, perhaps because these characteristics, japan have flipped poor tool and harsh local climate country into a powerful country. They can be constantly monitoring the changes of the world, analyzing the effects of the ongoing style for Japan. Once they identify the key trend, they are prepared to accept research and figure out how to catch the trend. Collective work soul is remarkable quality elements that are not found in other oriental countries. In work, people often dismiss what I acquired to promote the general; to find out the harmony between themselves and other members of the group. The company can remain competitive fiercely with the other person but depend on circumstances and the precise circumstances they can also interact to accomplish common goals. For example, two Japanese camera company can contend with each other in the united states but abroad as both companies can work together to defeat with a third country of foreigners. Because of the co-operation, today Japanese camera industry gets the highest position in the world. Some characteristics of japan custom has made positive efforts to the success of an organization, the development process of Japanese modernization and have a direct impact to the realities of economic management.
Japan is a leading region of the world in the areas of technological research, technology and machinery, medical research. Almost 700, 000 research workers' share of budget 130 billion US dollars research and development; ranks third on the planet. The important contribution of technological innovation in Japan is in the areas of electronics, cars, machinery, professional robotics, optics, chemicals, semiconductors and metals.
Japan leads the world in research robot and also the largest motor vehicle manufacturers on the globe and is home to 6 out of 15 automobile manufacturers on the globe as well as 7 out of 20 most significant manufacturers of semiconductors.
Precision machinery industry of Japan is famous for watches and surveillance cameras. Before World Battle II, the quality of Japanese camera is poor. However, in the 50s, the manufacturers have improved upon their product quality to international expectations, expanding creation and occupy a significant market show of world markets. The label "Made in Japan" became associated with cutting-edge technology and top quality. Japan went on to become the world head in camera technology and sales, snuffing out most German and United Status makers. JAPAN camera maker's opponents were no more German or American. Japan produced many camcorders with 17, 660, 000 devices in 1991. Currently Japan is the world's leading camera manufacturers. The camera industry is based seriously on exports to Japan; Japanese camera should face the increasing competition of industrialized countries. In 2009 2009, sales of small camcorders in Japan has dropped 5% over 2 yrs ago because most homes in this country already own at least one camera. Meanwhile, global sales of compacts also reduced the same quantity from other camera manufacturers. Camera producers have to study to equip the initial features for the new camera to be able to stimulate demand.
Japan was very poor in natural resources except timber and sea food, while the society is too big, raw materials are incredibly much demand in this country and mainly be based upon import. Main import associates of Japan are China 21%, United Talk about 12. 7%, Saudi Arabia 5. 5%, UAE 4. 9%, Australia 4. 7%, Korea 4. 7% and Indonesia 4%. The current economic climate is dependent on import so the changes of the world market also have strong effect on Japan. For example, the changes in the price tag on oil have an identical impact upon multiple business, from packaging and automobiles to hospitality and transport.
Japan's market was devastated through the battle, but with the appropriate policy, it possessed rapidly recovered (1945-1954) and progressed into high levels (1955-1973). Since 1974 until now, the expansion was slowed down, the significant reduced in the 1990 period because of this of unnecessary investment during the overdue 1980s but Japan stayed a third greatest economy in the world after United State and China based on the World Lender.
At the beginning of 2010, although Japan's current economic climate remain some problems such as deflation but domestic development has stabilized again. The first reason is Japan's exports to China and Asia increased, while its exports to the United Condition and European countries towards constancy. The second factor is the result of monetary support methods by the federal government of Japan has started to be effective. As expected by monetary experts, GDP of Japan will increase 1% in 2010 2010. The recovery of the economy has important implications to the purchasing electricity of consumers as well as the development of the company.
Business environment includes both specific and general forces. To accomplish research on business environment helps the business enterprise leaders active in all situations may occur in the operation of its business, then finding out the regulations and measures modified accordingly.
The Japanese appreciate the task hard over everything. They have got a strong connection to entrepreneurs than with their family and put all effort to the success of the organization. Competition and assistance contracts are parallel increased. To resolve the discord of interests, expectations, guidelines, Japanese business people often make an effort to discuss to find optimum solutions to avoid conflicts induced confrontation. Japanese management style is one of the main causes of the businesses success in Japan.
The politics of Japan is conducted in a construction of a parliamentary representative democratic monarchy where Prime Minister of Japan is the top of federal. Japanese politics runs on the multi-party system. Executive vitality is exercised by the government. Legislative power is vested in the dietary plan, with the House of Associates and the House of Councilors. The Judiciary system of Japan can be an 3rd party entity.
While the global market remains many unpredictable factors anticipated to debt problems by Western european, Japanese economy has not retrieved. In June 2010, Primary Minister of Japan Mr. Yukio Hatayama announced his resignation and Mr. Naoto Kan became new Japan's Leading Minister approved the visit of japan parliament; once again the politics changes have very seriously affected the economy of Japan. The invoice for environment change coverage, disputed bill and global postal reform charges are tightly related to the market but have not been transferred. Political instability and coverage with unreliable has significantly affected the activities of the business.
Task environment of the camera industry in Japan
Michael Porter's "Five pushes" was used to check out camera industry. The five makes are risk of new entrants, rivalry among existing organizations, and risk of substitute products, bargaining electricity of purchasers, bargaining electricity of suppliers. The better each one of these forces, the greater limited companies are in their potential to raise prices and earn greater revenue. Although Porter mentions only five pushes, a six - other stakeholder - is add here to indicate the energy of camera and imaging product affiliate.
Bargaining Electricity of Buyers
Camera and imaging product associate
Rivalry Among Existing Firms
Threat of Replacement Products
Threat of New Entrants
Bargaining Ability of Suppliers
Relative Ability of AssociateFigure 2. 1 Causes Traveling Industry Competition
Source: Techniques for Analyzing Companies and Rival by Michael E. Porter.
Threat of new entrants
The risk of new entrants in digital camera industry is low. Technology is very important because companies in camera industry continue to keep up with the latest trend and technology. It is difficult for new companies to enter in the industry and contend with greater companies such as Canon, Nikon and Sony. Although with the go up of technology and the growing demand of consumers, the industry is very popular and profitable for the firms who have access to technology and capital. To enter into camera industry, it requires high capital to get on technology, marketing and distribution. New entrants on the market spend a lot of time and money on building brand and nurturing customer knowledge. The barriers to admittance industry are high nonetheless they are declining by the time. The new technology makes the price of camera is declining. Moreover, the introduction of internet and the growing of many distribution channels, companies can offer product about the world. The hurdle to entry in to the industry is high depending on economic condition. When the economy is good and consumers have more money to buy camera, it is better for company. When the economy is in recession, there's a high hurdle. The differentiation of product is high barrier for new entrants. To contend with existing companies in the industry, new entrants have to differentiate and concentrate their products that may be too costly.
Threat of rivalries
The threat of rivalry in camera industry is very high. You can find 28 camera producers in Japan with main rivalries such as Canon and Nikon - are considered the very best two manufactures surveillance cameras, Sony, Pentax, Panasonic, Olympus. There exists high intensity and frequent competition in the camera industry, and the key competitors launched services very often. If company will not come up with trends and services, it'll lose market show and income. When Olympus launched the 14-megapixel Stylus-7040 at CES, with a 7x huge focus, Sony and Panasonic created super wide move camera with strong features, such as Wi-fi, GPS and screen tough to contend with Stylus - 7040. In camera industry, there is certainly low product differentiation; customers can freely choose the product which is good deal. Moreover, clients can easy to switch from one competitor's products to some other, industry rivalry raises. Furthermore, the camera industry is attaining saturation with sales declining global from 2008 to present. Companies in the camera are fierce competition to remain the market show.
Threat of substitutes
The threat of substitute in camera is low. A couple of two major substitutes. The first one is film camera and the next one is cell phone camera. It seems that film cameras are losing reputation because of outdate technology. Film camera is much less convenient and convenient as digital camera. Users must hang on to have pictures prepared and developed before they can look at them. Additionally it is expensive getting the pictures refined and developed. In addition, when users use film, they need to have everything on their roll of film, whether it is good or badly taken, paper out. Users do not have the versatility to scroll through and erase bad pictures on the spot as they actually when they use digital cameras. Many cell phone designers add camera function in cellular phone. The first camera cell phone created commercially was the J-SH04 in Japan by J-Phone (now called SoftBank Mobile) and the Sharp Firm in November 2000. The J-SH04 got a 110. 000 pixel resolution (0. 1 megapixels), the grade of photo is not good. Although, the image quality of cell phone camera is increased over enough time with the addition of more megapixels (The Sony Ericsson Satio which has 12. 1 megapixels, happens to be regarded as the best camera mobile on the globe) but it is well suited for amateurs. Furthermore, users do nothing like cellphone camera since it will not provides storage area as camera.
Bargaining power of buyers
The risk of purchasers is very huge. The customer is the main factor in the buying process. They make a decision where to buy the product and how much they want to shell out the dough. Digital camera product is established from desires, not needs; therefore customer doesn't have to choose the product to survive. They are able to choose what to buy and from what company. Therefore, it is important for the companies to set-up value and placed a price that customer is willing to pay for. In camera industry, there are many products with different prices, different features. Customers can easy choose the features they want. Low turning cost of point and capture markets and little product differentiation allows buyers to pick the lowest cost option. Furthermore, in recession economic, the customers are not making so much, they might be sensitive to cost and look for the cheapest possible cost and the highest possible quality of product. Nowadays, internet helps potential buyers have more information about the product and buyers can buy online. It creates the bargaining power of buyer is increased. Since there a wide range of buyers on the market, there isn't a large hazard but companies have to keep customer in mind and listen to the necessity of customer. Company wishes to endure and develop, they have to produce what customer need, not produce what they have.
Bargaining electricity of suppliers
The threat of distributor is low. Inputs of digital camera are software, zoom lens, battery, RAM, adobe flash storage card, etc. The products are standard so that suppliers don't have much bargaining ability. Building good romance with suppliers is very important with electronic digital companies. If they buy in mass and have good relationship, they can reduce their costs. Many suppliers focus on integration to drive down cost. If suppliers generate a good that is very new and unique, they can chose to source for companies that provide the best price. Internet impact is merged. Buyers can find different suppliers and compare prices easier and reducing vitality of suppliers. In digital camera industry there are extensive suppliers, they are simply more and more force to slice their price when their customer can go to other suppliers who may offer the most reasonably priced. Suppliers are also starting lose electricity because more and more are needs to produce their own products and components in-house. For instance, Canon production fabricates all chip and designs.
Power of camera and imaging product associate
Camera and imaging product affiliate (CIPA) has medium influence on digital camera industry in Japan. The purpose of CIPA is to aid the further development of its associates who are engaged in the development, creation digital cameras by dealing with problems of the industry, such as environmental problems, insufficient compatibility or interoperability between products, and the maintenance of fair market competition, and by promoting research and information exchange. Companies in this affiliate have to adhere to CIPA expectations such as standard method of calculating digital still camera battery intake, resolution measurement methods for digital cameras, hypersensitive of digital camera models. Moreover, CIPA provides information about products and company for consumers in order that they can certainly choose what product they want.
Mapping of the main element strategic organizations in the industry
A tactical group is a couple of business units or companies that "purse similar strategies with similar resources". Categorizing businesses in virtually any one industry into a place strategic group is very helpful as a way of better understanding the competitive environment. Research implies that some strategic groupings in the same industry tend to be profitable than others. Because a corporation's composition and culture tend to reflect the varieties of strategies it uses, companies or business units belonging to a particular strategic group within the same industry have a tendency to be strong rivals and tend to be more similar to the other person than to competition in other strategic group within the same industry.
Strategic group in Japanese camera industry can be mapped by plotting the marketplace positions of industry opponents over a two-dimension graph, using two strategic factors as the vertical and horizontal axes. It can be said that we now have many standards to map camera companies into tactical group they are price, photo quality, diversification of products, function of product, extra - equipment and so forth. Price and diversification will be chose for vertical and horizontal axes respectively to map camera companies into strategic organizations that'll be presented the following.
Figure 3. 1: Mapping tactical group in the Japan digital camera industry
Diversification of products
Canon, Sony, Nikon
Samsung, Panasonic, Olympus
Fuji Film, Ricoh, Kodak, Toshiba, Casio
As is seen there are four tactical organizations in the camera market. In good deal and few types of products we have Pentax and Kingcom. A couple of Fuji Film, Ricoh, Kodak, Toshiba, and Casio in the tactical group with a little low price and several types of products. Samsung, Panasonic, and Olympus are mapped in group with average price and a bit varied of products. High price and diversified of products include Cannon, Sony, and Nikon.
From the map above, a strategic type which is a category of companies based on a standard tactical orientation and a combo of framework, culture, and functions consistent start strategy, can be create. Certainly, Pentax and Kingcom are defenders because these businesses with limited types of products concentrating on enhancing the efficiency of these existing procedures. This cost orientation makes them improbable to innovate in new areas.
Prospectors are Cannon and Nikon with fairy wide products that concentrate on product creativity and market opportunities. Analyzer is Sony that performs in at least two different product market areas, one stable and one changing. Inside the Cyber-shot DSC - the secure area, efficiency is emphasized. Alternatively, in Alpha DSLR, invention is emphasized. Lastly, reactors are Samsung, Olympus, and Panasonic that their responses to the environmental pressures tend to be piecemeal tactical changes.
Analysis of the rivals in a main strategic group
Like any industry, businesses in camera industry have to handle with an ever-increasing degree of environment uncertainty. Although companies are in the same proper groups however they only have similar partly strategies such as composition or culture. They still have their own missions, objectives, and strategies. Therefore, in a proper group, there continues to be competition among businesses. This industry matrix below provides key success factors that are parameters and can significant influence the overall competitive position of companies in camera industry.
According to Takasi Kondo (Vice Leader Digital Imaging Sony European countries), in the DSLR business segment, Canon and Nikon hold the first and the next place while Sony captures the third position. Obviously, in camera industry, the competition among Canon, Sony, and Nikon is quite fierce. Each company uses absolutely their own competitive advantages along with smart strategies about products, price as well as customer services to be able to improve customer satisfaction, increase the market stocks, and record higher market position.
As is seen from the data above, Canon has high ranking on diversification of products based on making use of new technology. Canon has been focusing on manufacturing 3 series of camera these include EOS, Powershot, and Ixus. Definitely, Canon's strategy is diversifying its series of products. Each series has its different characteristics that gratify customer need. For EOS series are backed by over 70 years of lens technology, allow to up grade the equipment to complement photographic progress. There's a appropriate DSLR body for just about any user, over 60 lenses and a wide selection of accessories for each conceivable photographic situation. Powershot series is specially made to be an affordable yet powerful compact camera. The very last series is Ixus which is suitable for the fashion-forward, classy appearance. Therefore choosing the IXUS is the best suits for discerning needs.
Moreover, Canon has been developed services which provided significant additional customer advantages to better meet customer needs. When customers require stylish of camera is slender, small, and light, thus Canon embedded in all new types of IXUS and PowerShot digital cameras. Becoming successful leader of imaging solution, Cannon matches customer expectation with the characteristics. Cannon products correspondence with everyone, yet still more products in future advanced in design and color to suit consumers' modern lifestyle.
Sony appears to be the great rival with Cannon in diversification of products. Presently, Sony focuses in 3 series Alpha DSLR, Cyber-shot DSC, Mavica MVC. The improvement in Alpha DSLR series is the Sony's diversification technique to compete with Canon's EOS series. Sony is constantly on the up grade the function by applying the latest imaging technology in the new technology of product. Two new DSLR body have been launched to consumers recently, they are intended to help Sony to be the quantity two or even number one in the market (Kondo, 2009). It can be said that Sony is using differentiation strategy when they design, produce the initial features for the new camera physiques which will be launched and the new flagship will be more likely to have a complete format sensor and can use CF cards for memory. This plan creates the competitive advantages for Sony products from others rivals' ones.
Besides Cannon and Sony products, Nikon still contributes into group competition with Digital SLR cameras. Nikon Digital SLRs combine the latest in technology easily of use to create extraordinary digital images. Compared the features, explore the benefits, and explore the details and features. Nikon becomes ideas into images with a Digital SLR. To summarize, three firms Cannon, Sony, and Nikon are concentrating on diversification of products, however, each company is doing its strategy diversely, which is obvious they are doing well to be able to meet various customer's requirement.
The second criterion to map Canon, Sony, and Nikon into a tactical group is price. Currently, three firms source to consumers with fair level of price. Sony seems really aggressive in their rates. Many experts examine that Sony should go for the lowest pricing on their cameras. A lot more XD CAM video cameras they get out there the more it expands the commitment to the format and that is good business sense. It makes it very difficult for the competition to claw again market share.
The economic crisis in 2008 damaged the world in general and camera produces in particular. Unlike many businesses try to reduce the price to maintain the market show and catch the attention of more customers, Nikon has applied the price increasing strategy because of the negative inflation between the Japanese yen and other major currencies. The rises seemed frontward targeted mostly to lenses, even though some camera systems were also going up as well. Increasing price means that Nikon can earn a reasonable revenue and also continue to invest in services development. This plan is absolutely right for Nikon in left over a strong company, consolidating its reputation, producing high quality products, and increases the competitiveness in camera industry.
Opportunities and hazards facing businesses of the camera industry in Japan
The camera industry in Japan performs a major role in the presently flourishing digital-home-appliance business. Using a influx of immediate sales expansion since 1995, Japanese camera manufacturers have showed their strong competitive border to capture an 80% share of overall global market. The camera market has got into its middle years, and start comes new difficulties and new opportunities for Japanese camera producers.
Kyocera, Olympus and Pentax have been reported as having reduced their level of production. Alternatively, Canon, Casio, Sony, ect. are growing their market stocks and are relentlessly rivalling for unsaturated international market dominance. Nikon and Cannon, both established conventional camera manufacturers, are working to develop the marketplace for advanced dslr cameras.
Meanwhile, "camera-phones" outfitted with miniature camera modules have grown to be a rapidly widening market category since 2001. On the 500 million mobile phones made up to the finish of fiscal 2008, some 180 million were camera-phones. Sales have grown dynamically, with the proportion of exports to total sales increasing year-on-year. Japanese companies such as Panasonic, Sony, Sharp and Konica, Minolta, jointly meet 80% of the world demand for the imaging devices and optical modules used in camera-phones, which evidently reveals the formidable competitive good thing about Japanese industry in this field and generate a good opportunity for Japanese camera creators to broaden their market.
A higher rate of technological progression, supported by strenuous investment in R & D, is one of the leading factors in Japan's competitiveness and makes the country an integral investment destination for camera industry. Japanese companies are basing their R & D functions and processing of high-level products, including the DSLR camera, domestically. Cannon, for example companies its DSLR video cameras in Japan. Some companies keep digital camera development at home to safeguard intellectual property.
The camera market in Japan has already been showing some indications of saturation, so Japanese camera manufacturers are investing in more strength into international markets. Corresponding to Takatoshi, assistant director of the Industrial Machinery Section at the Ministry of Market, Trade and Industry (METI), the Japanese strategy in addition has included the management of global-supply-chain, which includes factories in China. Other companies have divided jobs in the creation process between Japan and China. Moving the assembly procedures to China is ways to reduce costs. Fujifilm, besides downsizing its home operations, made a decision in 2006 to alter its entire camera production to China. Until recently, the company possessed produced over 70 percent of its digital cameras in China. Creating a mass production system in China is part of Fujifilm's cost-minimizing structural reform of its electronic-imaging business. By 2008, Taiwan experienced anchored around 41. 8 percent of the global DSC market. However, 90 percent of its development was with respect to Japanese camera designers. Japanese companies are starting to outsource development of low-end models to Taiwan.
According to a fresh review from InfoTrends (is market information website), the worldwide camera market continues to show a strong year-over-year unit development rate. 2006 sales are anticipated to reach nearly 89 million devices, representing a 15% increase over 2005
The Japanese local market for the camera will soon reach saturation. Market expansion is slowing down and the drop in prices in changing the surroundings of portrait digital photography. This reveals many challenges for most Japanese companies as they make a decision where to invest from now. Until lately, there were quick breakthroughs in technology, necessitating huge investments for the development of the camera. But with way too many products available in major retail outlets in Japan, consumers have a hard time selecting a camera.
It is now an era of success for Japan's perfection machinery industry in the DSC sector. "Manufactured in Japan" DSC products could very soon turn into a thing of days gone by, as Japanese companies switch production abroad where costs are cheaper. The "hollowing out" of the domestic DSC industry is inevitable. Because of this, some Japanese companies have started to withdraw from the market while others are considering merging technologies, investing in new areas or even creating new types of partnerships.
Increases in pixel quantity lead to extension of the marketplace, which is here that Japanese companies powered by advanced R&D manifest their advantage over international companies. The imaging devices are supplied mainly by Panasonic and Sony, which constantly promote development of the camera market, in so doing providing an edge to Japanese camera manufacturers. However, it is projected that low-end digital camera models will plunge into cost competition rather than complex competition (i. e. greater pixel amounts), producing Japanese companies in a fierce price war against South Korea, Taiwanese and Chinese camera manufacturers. Japanese companies will gradually lose their border in the low-end camera market.
Attractiveness of the camera industry for the present incumbents and potential new entrants
The camera industry in Japan has broaden its concentrate beyond developing equipment to maintenance and management services as well as creating music, video, printing and digital content. These developments are anticipated to create a variety of new opportunities for the proven camera producers and potential new entrants. To encourage further expansion, the national and local government authorities are providing bonuses to these businesses, creating attractive business surroundings for home potential buyers as well as new entrants from in another country.
Although digital cameras are no longer the exclusive preserve of professional photography enthusiasts or the high-income group. Since in the launch of portrait digital photography in 1990s, the marketplace for digital still cameras has grown speedily as prices fell and quality issues received addressed. The worldwide consumer camera market is likely to demonstrate an annual development rate of 6% by level, increasing from almost 78 million systems in 2005 to 104 million devices in 2010 2010.
At present, income are approximated to be about 10% to 15% but they are likely to drop as more digital camera makes like Sony enter into the market. In addition to Sony, several other digital camera makers have announced programs to create their own digital SLRs to contend with current market heavyweights Nikon and Cannon. Shipments of dslr surveillance cameras are forecast to climb sharply in the coming years, matching to data from IDC. There were about 2. 5 million such cameras sent in 2004 which will surge to 7. 3 million this year 2010, the business predicted in mid-2005.
It is one of the flourishing areas and profitable business for the firms who have already established their position in the markets such as Nikon, Cannon and Sony. While using climb in the demand from consumers, you will see many new entrants interested in investing in this field but you won't easy for those to compete with the existing leading camera designers in Japan.
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