Canon Inc.: Ambitious Acquisitions in the Video Surveillance Market
(8 pages of text)
Case (Pub Mat)
Facing a decline in the company’s core camera business as a result of the aggressive entry of smartphones, Canon identified the network security industry as a potential growth market, with expected revenues of US$23 billion by 2020. Canon opted to pursue this kind of growth potential outside its core competency by acquiring Milestone Systems in 2014 and Axis Communications in 2015. Canon paid a 50-per-cent premium to acquire Axis in a cash-only offer, while choosing to allow its two acquired companies to continue operating as independent entities. Should Canon have instead created a strategic alliance with these two companies? Would these acquisitions allow Canon to achieve synergies and secure its goal of $1 billion in sales from the network securities market by 2020?
This case is suitable for senior undergraduate and graduate students in courses dealing with mergers and acquisitions, competence-based growth strategy, industry analysis, strategic management, and international business and strategies. After completion of this case, students should be able to
- understand the challenges of companies that compete in highly competitive industries;
- recognize the solutions for continued growth through mergers and acquisitions;
- examine the evolution of an industry and spot new trends or issues, leading to growth and success; and
- identify new markets and choose an appropriate entry strategy for aggressive growth.
Information, Media & Telecommunications
Japan, Large, 2015
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