Canon's revised business model to focus on IT peripheral products

It is primarily known as a total image solutions provider in India. The new business model however hopes to revise this image and sell Canon India as a major IT peripherals player.

Alok Bharadwaj, GM, Canon India (systems product division), who was in Pune for the launch of their new range of IT peripheral products, said that the company would go all out to penetrate the local market, especially the B and C class cities.

In order to counter the slowdown, the company has revamped its strategy to increase its market share in the printer market. The company has invested Rs 10 crore in this effort, which covers their brand building exercise, channel initiatives and the launch of 12 new products in the IT segment that includes scanners and printers. Canon India has projected a turnover of Rs 225 crore next year.

From the modest revenue of Rs 15 crore expected at the end of this year, the company has drawn up plans to take this to the target of Rs 60 crore next year with the introduction of new generation products. "With the total restructuring of our peripheral business, we hope to increase our market share in the printer segment to 18 percent in the next two years. Non-metro cities will play a major role in plans for growth and promoting our brand", Bharadwaj said. According to industry reports, Canon had less than four percent market share in terms of unit sales in the inkjet printer segment as compared to HP' s 74 percent and Epson's 17 percent.

Canon India has put in place a distribution network to reach out to the non-metro cities. The company plans to grow its channel base to include 30 reseller partners, 30 corporate partners, 50 retail partners, 1000 assemblers and other small dealers by December 2001. The emphasis is on a new channel strategy that heavily focuses on channel profitability.

"We plan to target non-metro cities which constitute 75 per cent of the peripheral market in the country. The idea is to opt for regional distributors since they would have the local reach," he explained, adding that they had plans to build a presence in top 25 Indian cities by the end of this month.

In order to increase its local penetration, the company has increased its staff strength from four to 28. 50 care centers have been created covering 25 cities to take care of local service needs. These would be increased to 100 service points next year.

However, there are no plans to unleash a price war with HP. Bharadwaj believed that they could sell alongside with HP respectably. In March next year, there are plans to introduce the LCD projector, web camera and video communication devices.

(CNS)