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Student Name: NGUYEN Khanh Diep

ID Number: 52115613

Midterm Report

Canon Corporation – Management Reform and Finania! "o!i#$ine 1%%5

1. Overview

Canon &n' (キヤノン株式会社) i* a +apane*e m,!tinationa! orporation*peia!i-ed in the man,fat,re of imaging and optia! prod,t*.in!,ding amera*. amorder*. photoopier*. *tepper*. omp,terprinter* and media! e/,ipment' &t* head/,arter* are !oated in 0ta.

 o#o. +apanCanon ha* a primar# !i*ting on the o#o $to Ehange and i* aon*tit,ent of the 4"& inde' &t ha* a *eondar# !i*ting on the Ne Yor $to Ehange' 7t the 8eginning of 2915. Canon a* the tenth!arge*t p,8!i ompan# in +apan hen mea*,red 8# maretapita!i-ation'

2. Lessons from the case of anon orporation ase

a. The importance of leadership

:eader*hip i* an important fator for maing an organi-ation*,e**f,!' :eader*hip tran*form* potentia! into rea!it#' :eader* area e# h,man re*o,re in an# organi-ation' ;e genera!!# thin of ompanie* ompeting 8# mean* of their prod,t*. 8,t the# pro8a8!#ompete more 8# mean* of their !eader* than their prod,t*' MitaraiF,e pro=t. ith *trongmone# po*ition. #o, an mae a nee**ar# in>e*tment and pro=ti!! *,pport #o, in p,r*,ing #o,r fa>orite or' @e*ide*. he i* theone ho introd,ed the prinip!e of on*o!idated e>a!,ation *#*temto Canon'Mitarai F,i*ion' ?e i* the per*on ho 8ring*thining into ation' ?e reform the ompan# hen *eeing that

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deentra!i-ation i* no !onger eeti>e at that time' ?e hange* theCon>e#or "rod,tion $#*tem to Ce!! $#*tem

b. The importance and inuence of organizational reform

;ithin the frameor of the ontin,o,* de>e!opment* in theeonomi. tehno!ogia! and *oia! fator*. it i* a8*o!,te!#nee**ar# for ompanie* to hange the a# the# are organi-ed' Foreamp!e. one ompan# *tr,t,re o,!d 8e *een a* good in one time8,t it o,!d 8e not *,ita8!e in another time' he CE4 need* to ha>ea good >i*ion to ana!#-e and e>a!,ate the ompan#* *it,ation inorder to hange and reform the organi-ation hen the ,rrent*tr,t,re i* no !onger good for the ompan#'&n a*e of Canon. the deentra!i-ation *tr,t,re of Canon did ore!! d,ring the period of p,r*,ing di>er*i=ation' ?oe>er. in the

era of rapid g!o8a!i-ation and tehno!og# inno>ation. that *#*tem i*no !onger idea! for ompan#' hro,gh hanging fromdeentra!i-ation *#*tem to on*o!idation *#*tem. Canon an a>oidthe di*per*ion of h,man re*o,re* and apita!' F,rthermore. it anontro! the ompan#* =nania! ondition 8etter'

c. The importance of consolidation system policy 

 he ompan# i* termed a parent. and the parent. together ith a!!it* *,8*idiarie*. 8eome* a gro,p' &n *imp!e ord*. on*o!idation i*the !ine8#!ine *,mming ,p of the re>en,e*. epen*e*. a**et* and!ia8i!itie* of the parent and a!! it* *,8*idiarie*. in t,ne ith theparent* reporting period and ao,nting po!iie*';hen e>a!,ation of 8,*ine** performane* on!# o>er* the parent*ompan# and the e>a!,ation of *,8*idiarie* ere o,t of thi*e>a!,ation. thi* *it,ation o,!d happen ;hen the parent ompan#annot meet the *a!e* target. it ma# fore the *,8*idiarie* top,rha*e their good* on ao,nt. to mae it* 8,*ine** performane8etter' ?oe>er. in rea!it#. the good* i* not *o!d and the# reate apre**,re on the *,8*idiarie*' &f the *,8*idiarie* annot *e!!. the#ma# oer di*o,nt* to the ,*tomer*' herefore. in o>era!!. thi*

*it,ation reate* a 8ad eet to the ompan#'&n a n,t*he!!. it i* >er# important for a ompan# to prepare theon*o!idated =nania! *tatement and e>a!,ate a ompan# and it**,8*idiarie* a* a gro,p'Canon introd,ed on*o!idated e>a!,ation *#*tem in 1%%H' hi*made the a!!* hih ere the o8*ta!e in the pa*t di*appearedgrad,a!!# 8# thi* ne mea*,re' &t a!*o he!p* the ompan# to a>oid

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,nnee**ar# 8an 8orroing* thro,gh Iei8!e !i/,idit# a!!oationamong gro,p ompanie*'

d. The importance of analyzing Cash Flow Statement and 

manage the cash ow

CG$ J @eginning &n>entorie* ",rha*e – Ending &n>entorie*'

@# e>a!,ating the Ending &n>entor#. a ompan# o,!d manip,!atethe pro=t' herefore. the Apro=t =g,re* in the inome *tatement arenot nee**ari!# re!ia8!eB' &n*tead of empha*i-ing the re*,!t in theinome *tatement ith !e** attention on the eLient ,ti!i-ation of o>era!! a**et*. e *ho,!d !o*e!# monitor and e>a!,ate the a*hIo'&n order to impro>e the a*h po*ition of a ompan#. e an

ithdra from ,npro=ta8!e 8,*ine**e*'&n a*e of Canon. a* part of the eort to empha*i-e a*h Io.Mitarai deided to ithdra from omp,ter 8,*ine** in 1%%68ea,*e *ine 1%H5. after in>e*ting in 7meria* ompan# for #ear*.Mitarai fe!t that Canon Ahad not a/,ired ,ni/,e tehno!og#ompared ith the !eading ompanie* and in>e*tment had 8eenontin,ing itho,t pro=tB'

e. Supply chain management, technology and the innovation

Canon mo>ed ahead ith *,h groth *trategie* a* enhaningei*ting 8,*ine**e* and epanding into ne area*' hro,gh thethoro,gh imp!ementation of *,pp!# hain management and &reform*. the ompan# targeted the rea!i-ation of rea!timemanagement to re*pond /,i!# to hange*' &n*tead of month*.ith the imp!ementation of 8arode *#*tem. Canon anman,fat,re order* reei>ed d,ring the pa*t 1 ee. and *hip themto dea!er* after O ee*' Ne *#*tem a!*o he!p* the ompan# to 8eea*ier to tra in>entorie* and monitor the in>entorie* !e>e!' 

f. Cell Production System

 he ompari*on 8eteen Con>e#or $#*tem and Ce!! "rod,tion $#*temi* *hon i* 8e!o ta8!e

Con>e#or $#*tem Ce!! "rod,tion $#*tem• Centra!i-ed• ?a>e to meet the *peed of the

• Deentra!i-ed• M,!tiera!

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!oe*t prod,tion proe** *oho!e fator#* eLien# an8e aeted

• Con>e#or 8e!t* are epen*i>e• Cannot >ar# the prod,t*

peop!e)• 7,tonomo,*• &nrea*ing teamor• No 8readon that

aet the ho!eprod,tion !ine

• Can prod,e a >ariet#of prod,t* hih i*prefera8!e 8ea,*emaret ant* !e** ,nitof a prod,t 8,t moreprod,t* oered' 7ndd,e to the rapid grothof tehno!og#. !ife #!eof a prod,t 8eome

>er# *hort'

g. essons from !nancial analyzing

- ;hen ana!#-ing a ompan#. e ha>e to ana!#-e 8oth $trateg#Management and Finania! "erformane. 8ea,*e the*e tofator* ha>e !o*e re!ation*hip ith eah other' ;hen a ompan#hange* it* *trateg# management. the =nania! performane i*aeted and it i!! 8e reIeted to the =nania! *tatement' 4nother hand. the ,rrent =nania! po*ition of a ompan# an ha>e

a *trong inI,ene in the *trateg# of that ompan# in net period'&f #o, ant to ,nder*tand a8o,t the ompan#. #o, ha>e to!o*e!# !oo to the ompan#* nat,re'

- From the Ca*h F!o $tatement. e an *ee that the Free Ca*hF!o of Canon i* a!a#* po*iti>e' &t te!!* ,* that Canon ha* notm,h in>e*tment opport,nitie* d,ring the pa*t #ear*' hat o,!d8e the rea*on for the inrea*e in di>idend pa#ment' ;e an !earnthat Di>idend 7mo,nt do not reIet the in>e*tmentPgroth of aompan#' @ea,*e if #o, in>e*t in highgroth 8,*ine**. #o, i!!epet !e** di>idend' &f the ompan# gro*. then #o, an earn

mone# from apita! gain' &f the ompan# doe* not epand m,h.then #o, i!! epet di>idend more' hi* an 8e !ear!# *een inthe a*e of Canon'

- :ooing at the rea*,r# $to. e an infer that the ompan# ha*8o,ght 8a a !ot in the period of 2996Q299%' hi* an happen8ea,*e of the three rea*on* 1' o inrea*e the oner*hip andprotet the ompan# from foreign a/,i*ition. 2' o a>oiddi>idend red,tion. and 3' o inrea*e the *to prie' &n thi*

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a*e. Canon 8,# their trea*,r# *to to inrea*e their *to*maret prie'

- ;hen ana!#-ing the Canon* $to "rie Chart. e an *ee thatthe Canon* *to i* >er# fa>ora8!e' @,t it i* not tr,e' @ea,*ehen ana!#-ing one ompan#* *to prie. e ha>e to ompare

it ith the maret inde' &f e di>ided the Canon* $to "rie toNiei 225 7>erage. e an dra a hart hih *ho the re!ati>einrea*ePderea*e of Canon to the o>era!! maret' 7* an 8e*een. the Canon* *to prie i* on!# prefera8!e ,nti! 2993. not299H' he !e**on to 8e !eant here i* e *ho,!d ,*e the re!ati>ehart in order to ompare and mae right in>e*tment dei*ion' 

!. onc"usionCanon Corporation – Management Reform and Finania! "o!i# *ine1%%5 i* an intere*ting a*e for a M@7 *t,dent to *t,d# a8o,t ho to

eLient!# manage a ompan# and ontro! it* re*o,re' &t a!*o he!p* ,*to 8roaden o,r no!edge a8o,t =nania! ana!#-ing. ho to,nder*tand a nat,re of a ompan# thro,gh it* *trateg# managementand =nania! *tatement*' &t a!*o point* o,t *ome ommon mi*tae* of *t,dent* in =nania! ana!#-ing and he!p* ,* to a>oid the*e mi*tae* inthe f,t,re'