Strategic planning at Canon with a cooperative corporate style (part 2)

Yet another strategy used by Canon is where in the process of creating the new strategic assets required to support diversification into a new business (like laser printers), the corporation learns new competences that can then be used to enhance its existing SBUs. For example, in creating the assets required to support the design, manufacture and service of the more sophisticated electronics demanded by the laser printer business, Canon may have developed new competences that could be used to improve its photocopier business.

Alternatively, by combining the competences developed in its photocopier and laser printer businesses, may have helped it to quickly and cheaply build the strategic assets required to succeed in a fourth market: that for plain paper facsimiles. This kind of advantage over single-business firms or unrelated diversifiers, we term ‘asset fission’ advantage.

Once the Canon top management (with the help of divisional and SBU managers) has identified overarching competencies, it must ask businesses to identify the projects and people closely connected with them. Corporate officers should direct an audit of the location, number, and quality of the people who embody competence (Printz, 2003).

This sends an important signal to middle managers: core competencies are corporate resources and may be reallocated by corporate management. An individual business doesn’t own anybody. SBUs are entitled to the services of individual employees so long as SBU management can demonstrate that the opportunity it is pursuing yields the highest possible pay-off on the investment in their skills. This message is further underlined if each year in the strategic planning or budgeting process, unit managers must justify their hold on the people who carry the company’s core competencies.

Elements of Canon’s core competence in optics are spread across businesses as diverse as cameras, copiers, and semiconductor lithographic equipment and are shown in Table 1
‘Core Competencies at Canon.’ When Canon identified an opportunity in digital laser printers, it gave SBU managers the right to raid other SBUs to pull together the required pool of talent. When Canon’s reprographics products division undertook to develop microprocessor-controlled copiers, it turned to the photo products group, which had developed the world’s first microprocessor-controlled camera.

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