Introduction
The operation of the business is affected by various factors that result from various business environments. These include technological, legal, competitive, economic, social-cultural and political environments. Amongst these environments, the technological environment is characterized by the high rate of dynamism. This is due to the high rate of product innovation which is aimed at increasing customer satisfaction. For example; with the increased rate of computerization, there has been advance in the photography industry resulting from the innovation of digital cameras. The industry is also characterized by intense competition amongst the firms. This has resulted from the increased investment by these firms in research and development with the objective of boosting their competitive edge. Amongst the firms which have invested in product design and development is Canon Incorporation. The discussion of this paper is aimed at analyzing the competitive environment with the objective of developing a competitive edge for the new digital camera developed by the firm.
Organization background
Canon Incorporation is a firm that is in the photography industry and deals with the manufacturing of various products such as laser beam printers, cameras, and other multipurpose digital devices. The firm is located in Tokyo, Japan and has a human resource base of 131,532 employees. During the 2007, financial year, the firm revenue was approximately $38091.4 million.
Product Designing And Development Process
The product
Due to the increase in the level of competition, the firm’s management intends to design and develop a new digital camera. The product would be launched in the market and result in an improvement in the firm’s competitive advantage.
Business goal
In developing the new product, the management is intends to increase its market share with a margin above 10% within the first two years of launching the new digital camera in the market. In relation to revenue, the management has a goal of boosting the revenue level with a margin of 8% within the first year after the launch of the product.
Planning
The initial process of designing and development of the digital camera will involve conduction of conceptual designing. This is through undertaking a comprehensive market research. The research will consider various variables such as competitors and the consumers. This will aid in gathering of reliable market data for effective product designing and development. Conceptual designing will also involve an analysis of the necessary technology requirement for developing the new product.
Target customers
In designing and developing the digital camera, the firm’s major target consumers include individual and institutional consumers. Amongst the individual consumers, the youth is the major target. This is due to their high rate in which they embrace the technology. The market size is also increased by the fact that the product can be consumed by another category of individual consumers. The institutional consumers include the broadcasting firms such as the television companies, newspaper firms amongst others.
Concept Development
The designing and development phase will ensure that the digital camera has superior features. These include Integrated Cleaning Systems (ICS), image processors, multiple memory card installation which include SD and the SDHC cards, CMOS sensor, Live View Functions and Optical Image Stabilizer. The digital camera will also have multiple Universal Serial Bus (USB) ports and video cables. The ICS will enable ease in cleaning the camera from dust through vibrations of the camera. The new camera will be multipurpose in that it will support the Single Lens Reflex (SLR) features.
The competitiveness of the digital camera is also enhanced by the fact that it will be designed in a manner that eliminates noise in the process of taking photos. This will make it effective in taking photos in places that demand silence, such as play theatres and church. The designing of the camera will also ensure that there is efficiency in handling of camera during taking of photographs without tampering with the quality of the picture. This will increase its competitiveness amongst the customers especially the journalists who demand high efficiency in camera handling. The new digital camera will also have silicone petals that will be flexible. These will ensure effectiveness in the protection of the camera’s lens (4).
Detail Designing
In manufacturing the camera, the raw materials that will be used are high quality. This will enable in enhancing the durability of the camera.
Testing and Refinement
Before producing the digital camera in large amounts to meet the market demand, a pilot project will be conducted to verify the effectiveness of the new digital camera. This will involve the production of fabricated prototype digital camera.
The prototype will be tested amongst the individual and the institutional consumers. This will help in the determination of the effectiveness of the digital camera and the identification of the possible gaps for improvement.
Competitive Analysis
There is intense competition within the photography industry. This is due to the emergence of various competing firms that are investing in the manufacturing of digital cameras. For example, within the Chinese economy, the photography firms are investing heavily in the production of digital cameras. The cost of production for these companies is relatively low. This results from the availability of raw materials and skilled human capital necessary for the manufacture of the digital cameras. This enables the management of these companies to set a lower price for the digital cameras which results into intense price war amongst the competing firms.
On the other hand, old companies that had heavy investment in the manufacture of analog cameras are embracing the digital era. This is by increasing their investment in the designing and development of digital cameras. This has resulted into an increase in the number of competing products in the market.
SWOT analysis of the digital camera
Strengths
The multiple memory card features enables storage of more photographs and large size videos within the camera.
The USB will enable ease in printing of the photographs through the computer. The video cables will enable the ease in playback of the videos.
Ability of the camera to capture quality images resulting into customer satisfaction. This is due to the ability to set the camera in different styles such as landscape, monochrome, and neutral. Photograph quality is also improved by the presence of light sensors. This enables the ease in distinguishing color and its brightness.
High shooting speed enables the camera to take photos of fast moving objects. This makes it easier for journalists to take quality photographs.
Increased easy of creative control.This results from the ability to support the SLR features will enable the camera to be easily adjusted for the installation of the lens as demanded. This will increase the ease of operation amongst the professional and the amateur photographers.
Weaknesses
Financial constraints. High cost of research is involved in the research and development of the digital camera.
High voltage requirement. Video capturing requires a higher amount of energy. This will demand constant replacement of the batteries.
Inability to convert the digital camera into an infrared camera. This is due to the fact that it is not easy to remove the infrared blocking filter. The problem arises from the fact that it is not easy to find a glass that can efficiently block the original blocking filter (7).
The camera has a relative weight which makes it difficult for some individuals to move with freely.
Increased chances of innovation of a rechargeable battery compatible with the digital camera. This will increase the chances of improving the competitiveness of the digital camera.
Opportunities
Increased opportunities of improving the digital camera. This includes the elimination of the limitations of human vision that is beyond a certain wavelength. This is by utilizing the light energy that is emitted by the objects that cannot be observed by the human eye.
High market opportunities amongst the institutional consumers. This is due to an increase in freelance and franchise photography. There is the possibility of increased demand due to the way in which digital cameras have changed the photo taking and development.
The legal environment presents an opportunity for increased digital camera innovation. This is due to the ease with which the firm can obtain a patent for its new product. This reduces the risk of piracy.
Change in individual customer trend. Individual customers are embracing digital imaging increasing the market size.
Threats
Increased competition due to advancement in mobile phones. Mobile phone companies are developing phones with digital camera features. This has resulted into emergence of substitute products.
Decrease in market. This results from a change of in consumer trend. Individual consumers are preferring camera phones to the digital cameras. This is due to the increased mobility and multipurpose characteristic of the mobile phones.
Shift in trend amongst the competitors. Camera manufacturing firm are shifting from the production of analog cameras and venturing into the production of digital cameras. This result into a decline in market opportunities for the firm. For example Panasonic, Sum sang and Kodak company. This is intensifying the degree of competition.
High rate of technological advancement increases the threat of obsolescence. The firm has to be involved in continuous product research so as to add value to the product.
PEST analysis (Political, Economic, Social, Technology)
In the product design and development phase, an analysis of the political, economic, social and technological environment is conducted. This will enable the organization to identify the environmental factors that will aid in the effective marketing of the product.
Political analysis
The government has formulated various standardization policies related to digital camera manufacturing industries. This ensures that the cameras produced meet specific qualities that would result in customer satisfaction. Other policies are related to safety regulations. For example, it is a requirement that the digital camera manufacturing company include a manual detailing the effective handling of the digital camera lithium batteries to protect them from short-circuiting. As an industry regulation measure, the government has also established a quality control department to ensure strict adherence to the set standards (8).
The government does not put regulations with regard to the pricing of digital cameras. This enables the market forces to determine the price of the digital cameras. The free market creates a healthy competitive environment for the firms. This is due to the fact that they can extensively invest in product design and development. This means that it is possible for the firms to maximize the level of profits.
Economic analysis
The development of new product requires a firm to have sufficient finances to undertake the product designing and development more effectively. The economic environment enables the firms to obtain the finances from the financial institutions with ease. This is due to the fact that there are minimum loan requirements by the financial institutions. The rate of interest charged by the financial institutions is relatively low. The ease of obtaining a loan and the associated low cost reduces the financial constraints that may arise in the process of product development (9).
The labor market is also very effective in relation to the photography industry. The effectiveness arises from the high supply and efficient skills of the workforce. This increases the effectiveness and efficiency with which firms undertake product designing and development.
Social analysis
There is an improvement in the living standards amongst the people which results from an increase in the earning capacity of the citizens. The increase in the employment level has resulted in a change in the consumption patterns amongst the individuals. More households are incorporating leisure such as touring various places. There is also a social trend resulting from an increase in social festivities which are usually memorable occasions. This has resulted in a change of attitude in relation to the need for increased documentation of these events in various forms such as through photographs and videos. This presents an increase in market opportunity for the digital cameras.
Technological analysis
Product designing and development of digital cameras require the support of other technologies. The diversity within the technological environment enables effective and efficient development of new products. This is due to the fact that there are many mature manufacturing firms who can supply the needed technology efficiently. This results in cost reduction for the firm since the management will have a wide number of suppliers to select from. The innovation potential of these firms in terms of technology increases the efficiency of value addition to the new products. This makes the future market potential of the new digital camera to be high.
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