Business overview and analysis of nikon corporation

3645 words (15 pages) Essay in Marketing

5/12/16 Marketing Reference this

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With a workforce of about 26,125 employees, based in Japan, Nikon Corporation has been one of the most reputable company involved in imaging products (56.9%), precision equipment (33.2%), instruments (7.8%) and others (2.7%). (Nikon, 2010). The company has branches in Europe, America and Japan. Since 90 years, the company has been continuously improving photography, imaging and the optics industry towards the demand requirements of their customers. Therefore Nikon’s market has been mainly directed towards the consumers (B2C) and businesses (B2B).

The range of camera produced by this company since its existence is included in Appendix 1.



Referring to CIPD (2010), PESTLE analysis is an assessment of the company’s environmental forces that will guide it to be placed strategically above its competitors. These external forces are:

Political forces

In terms of government policies and legislation, a new geographical market in digital camera will be beneficial as it will attract new investors in these locations. Regions where political stability is not appropriate, there will be greater risks to enter new market places. On the other hand, well-established political legislation enhances the standard of living in these countries. According to Datamonitor (2010), social responsibility in these countries is developing very fast, enhancing the education of the population. Hence, new digital camera can be considered as a commodity. Therefore, Nikon should consider countries with good government policies, prior entering into these geographic regions. Actually, Nikon is present in Europe, America and Japan. This is because of the political stability of these countries.

Economical forces

During the past years, the world incurred an economic slowdown due to the U.S financial crisis. However, it has been reported that many countries has recovered from this crisis. To counteract this crisis, Nikon had to redo a branding to re-boost the sales. Furthermore, markets for low income consumers were looked into such that these consumers could afford a trustworthy camera.

Social/Cultural forces

The social needs for a camera are becoming more and more important. However, Nikon has the disadvantage of producing professional cameras with high prices. In order to integrate the social/cultural external forces, Nikon has started manufacturing cameras which are more affordable to the mass population. Additionally, in terms of social awareness, Nikon is already working on CSR to promote its brand.

Technological forces

With rapidly changing technology, Nikon has to keep pace with new technology in order to be competitive in the market. This has been witnessed by the elimination of traditional film camera to the latest SLDR camera. Furthermore, Nikon has invested massively in research and development in order to have a competitive advantage in the imaging industry.

Legal forces

There is no legal requirement regarding purchase of a digital camera on the worldwide market. This relieved the customers of any special permits that they might need for buying a camera. However, photography is banned in certain regions for security and cultural purposes. For Nikon, this does not constitute a problem as most of its users are professional photographers.

Environmental forces

With alarming concern of climate change, Nikon is working on using recyclable materials to reduce the effect of carbon dioxide emissions. As one of their strategy, Nikon is aiming at green marketing which is considered as one of the developing trends in modern business. (Kassaye, 2001). Hence in the manufacture of its products, health and safety procedures are adhered to.


The core competencies usually relate to the capabilities of the firm, enhancing its competitiveness in the market it serves.

According to Johnson and Scholes (2002), the core competences ‘create and sustain the ability to meet the critical success factors of particular customer groups better than the providers in ways that are difficult to imitate’.

Hence the strategic marketing of Nikon is based on core competences of the company. This highlights the company’s distinctive capability. Nikon, being leader in manufacturing of lenses, has four product segments:

Imaging products

Precision equipment



The figure below shows the missions of Nikon:

Fig1: Nikon’s Mission

Source: Nikon Annual Report 2010

The marketing strategy is in line with the corporate strategy of the company as it is currently making its brand image identified with ‘high quality’, ‘reliability’, and ‘integrity’. Since it is aiming to be the market leaders in all its business areas, they have included ‘fun’ and spirit of innovation as part of their image. Nikon’s vision has been changed recently to become “Meeting needs. Exceeding expectations.” Furthermore, Nikon is improving on processes that will keep their survival in a constantly changing market. MEtA and CSR are also two options that have been considered by Nikon to strengthen this relationship of trust with all their stakeholders.

From the above, Nikon’s core competencies drives it towards a more efficient company and offers advantages to the market places it occupies.

According to Drucker (1973), the corporate objectives of an organisation should include the following eight items:

Market Standing





Management performance

Employee performance and development

Public responsibility

Regarding Nikon, the corporate objectives are in line to that specified by Drucker (1973) as it covers all the eight items. However, using the core competencies approach, it can be deduced that Nikon has organisational capability for developing lenses use for cameras and other precision equipment. Their employees have the required core skills and each department has the competencies. The company also invests a lot in research and development to remain in the constantly changing market needs.

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Wherever, the skills needed do not form part of their competencies, Nikon make acquisitions and merges with other leading companies as well as leveraging of synergy is used to strengthen its core competencies and organisational capabilities.


Direct competitors for Nikon in the imaging products are Sony, Canon, Panasonic, Samsung, Olympus and Kodak.

The table below shows the strengths, weaknesses,



Strong brand awareness and image

Good after sales service

Variety of products

Economy of sales in terms of promotional campaigns


Know how in lens

High brand awareness in camera industry

Good image

Good quality products at affordable prices

Indirect competitors are:

Film cameras

Cell phones with high resolution cameras

Video cameras


For Nikon, the SWOT analysis is tabulated below:

Table 2: SWOT Analysis



High market occupancy

Major advancement in R&D and new technology

Healthy monetary situation

High brand name

Increasing market trend in LCD and DSLR cameras

Healthcare products are becoming more demanding



High stock levels of products

Lack of scale

Usually high price of cameras

Increasing cameraphones on the market

Reducing semiconductor capital market spending


High market occupancy

Considering the asian market, Nikon is the leader in most of the markets it operates. In the digital camera market, it accounted for 40% of unit batched for digital single-lens reflex (DSLR) cameras. According to Datamonitor (2008), the company also accounted for 25% of the instrument products sales and 27% in the precision equipment sector. The company’s high market occupancy is therefore a competitive advantage, allowing it to capture more market grounds.

Major advancement in R&D and new technology

Nikon has invested massively in R&D activities. It has also made collaboration with HP for the development of new technological digital imaging system since 2005. In 2008, it entered a cross licensing agreement with Microsoft for the development of its products. With these collaborations between different companies, Nikon is working on deriving synergies between different businesses. Non-core activities are thus being divested as they do not provide any competitive advantage to Nikon. Nikon’s percentage of expenditure in R&D rose from 5.1% to 6.1% in 2008. Therefore it can be deduced that the company’s major advancement in R&D has allowed it to enter strategic relationship with other leading companies.

Healthy monetary situation

Nikon has shown strong monetary performances during the previous years. Data from their annual report indicates increasing cash and declining debt. This means that the company is in a strong liquidity status, allowing financial growth plans like market expansion to occur. This good financial position also creates confidence in its potential investors.


High level of stock of products

With comparison to its competitors, Nikon had high level of inventory. These were in the turnover ration of 3%, 3.4% and 3.7% in the years 2006, 2007 and 2008 respectively. Accordingly, having hign inventories in a market where the trend of price is declining will affect Nikon’s operating performance.

Lack of Scale

As reported by Datamonitor (2008), Nikon has reported revenues of JPY 955,792 millions in 2008, compared to its competitors Canon and Fujifilm where revenues of JPY 4,481,346 million and JPY 2,846,828 millions were reported during the same period. This is because of the lack of scale.


Long term growth prospects for LCD displays and SDLR cameras

The demand for LCD screens is expected to grow in the long term. As a developer of LCD steppers and scanners, the company will be in a situation where manufacturing of multi-lens projection optical system, requiring an adaptor for larger glass plates, will not be a problem.

In the camera market, the quality of Nikon lenses helped the company to stand good among its competitors. The digital SLR camera was initiated by Nikon in 1999. Today, the company offers a range of DSLR cameras. According to GfK (2010), market for DSLR cameras recorded steady growth of 22% in the first six months of 2010. This opportunity shall be important for Nikon to remain as market leader in this product segment.

Healthcare products are becoming in demand

With a global healthcare market growth of 4.5% during 2007, the market is expected to reach a value of $ 170.5 billion by the end of 2012. Asian, European and American countries are the customers for these product. In this application, Nikon manufactures microscopes and other products for use in the biomedical field.


Reducing semi-conductor market capital spending

The market capital for semi conductors is expected to decrease by 22%. Nikon being a dependent on semi-conductor market, can be affected by this reduced capital spending of semi conductor market.

Increase camera phones on the market

According to ABL Research (2007), nearly 70% of all handset globally are expected to be equipped with cameras with high resolutions. Therefore this could create a threat to Nikon, reducing the growth of its share in camera market.


The new product will be a digital single lens reflex camera with added functionalities compared to the latest proposed by its competitor Canon. The new product will be named Nikon XD and will have the following specifications:

24.5-megapixel Resolution FX-format CMOS sensor

Nikon EXPEED image processing technologies

138 MB1 Processed NEF (RAW) 12 or 14 bit image files

Low noise ISO sensitivity from 100 to 1600

Two Live View shooting modes

Continuous shooting at up to10 fps at full FX-format resolution

Fast, accurate 51-point AF system

Nikon EF lens mount

1,005-Pixel 3D Color Matrix Metering II with Scene Recognition System

3-inch super-density 920,000-dot VGA LCD monitor

100% viewfinder coverage

Nikon Picture Control

Rugged, durable and precise magnesium-alloy construction

Virtual Horizon Graphic Indicator

A-GPS Positioning

Bluetooth and Wifi Connectivity


Using the SMART concept as described by Westwood (2005), Nikon will be able to control its marketing plan for this new product, improve organisational capabilities and provide overall functional target for the coming years.

Therefore, the SMART objective will be rather a tactical decision making. Initially, it will have an objective for branding.

In the first instance it will focus to make this new camera the preferred brand of 18-50 years professional photographers in Japan by year 2012.

Secondly, as a function of becoming the preferred camera, it will acquire an increase market share by 10% by 2013.


People who who pay for professional photo portraits are generally status-conscious professionals who have children, and so we’ve segmented the Eugene-Springfield metropolitan area according to the social status of families. We’ve used education as a measure of social status.

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Families of College Graduates

Professionals are, almost by definition, college graduates. They are the ones most likely to have a need for professional photo portraits for career purposes. They are also most likely to have the means and taste to want professional photos for their families, as well.

Families of High School Graduates

People who have not completed college are assumed to be more likely to be employees or be in a trade. While many of them may have the means for professional photos, relatively few will use them. They are more likely to use home-made photographs, except for rare occasions, such as a high school photo or wedding.

Families of Non-High-School Graduates

These are families who are generally without the means to hire professional photographers on a regular basis.


The Eugene-Springfield metropolitan area has a total population of 330,527. There are 74,836 families.

Some 25.5 percent of the adult population in the metropolitan area is composed of college graduates, which we will here define as professionals. Some 62 percent of the population is made up of high-school graduates.

The Eugene-Springfield metropolitan area closely conforms to the boundaries of Lane County, Oregon. The office will be located in Eugene, but clients are accessible throughout Lane County through physicians’ offices. Most Lane County residents are accustomed to doing occasional business in Eugene.

The following table and graph give the breakdown in demographic terms.

Year 1

Year 2

Year 3

Year 4

Year 5

Potential Customers



Families of College Graduates








Families of High School Graduates








Families of Non-High-School Graduates
















Target Market Segment Strategy

Our target market is families of college-educated people who are most likely to be professionals.  This is the population most likely to order professional photos on a regular basis, having both the means and the desire for professional quality photographs.

Since women make most of the purchasing decisions in families, our specific target market is middle-aged professional women in the Eugene-Springfield metropolitan area, roughly 19,554 people.

Market Trends

Photography has gone digital. Digital cameras are replacing conventional cameras faster than DVDs are replacing VHS in video stores. Even cell phones have digital cameras on them. The uses of photography have expanded as well because of Web pages on the Internet and email. Digital images are needed for printing uses as well, for such uses as brochures and business cards.

Photo studios have mostly switched to digital format because it also allows for easy processing and manipulation.  They have been less amenable to making digital files affordably available to clients, and this is a trend on which we intend to capitalize.

Market Growth

The growth rate used in the table is based on the 1.4 percent growth rate experienced by the Eugene-Springfield area over the past year. This growth is reflected in the accompanying chart and graph.

Market Needs

Families have photos taken to preserve memories. Most photos are taken by consumers with their own cameras, which are increasingly digital and are even part of their cell phones. Most of these photos are low quality but no one cares because only the family views them.

Consumers generally engage professional portrait photographers when the photos will be viewed outside the family and when quality matters. Professionals, such as those in our target market, often have business needs for quality photos and have acquired a taste for them. These professionals have families, too. They have the budget and the need to use them for their families because they often entertain at home and their family photos will be on display. Just as they appoint their homes with fine furniture and decorations, the photos on their walls need to exhibit quality.

Specifically, some of their needs include:

baby pictures

portraits for home or office

senior pictures for the high school yearbook

family pictures to send to family members

family newsletters

family, individual or business websites

portraits for business cards, such as for real estate agents

portraits for brochures and annual reports

The world has become increasingly digital, but many professional photo studios have made it difficult for people to enter the digital age. The traditional practice of retaining negatives to require clients to return for prints has been carried over to charging high fees for releasing digital files of their portraits.

The need to capture memories lasts for people’s entire lives, and business portraits require a regular update. But people generally don’t look forward to seeing a photographer. In fact, they find it a burdensome expense, have not established a relationship with a photographer and don’t think often about going to one. As a result, a lot of memories are lost and ancient portraits of professionals continue to be hung on walls and portrayed in publications. This makes them appear to be trying to preserve their youth instead of embracing their maturity and experience, and doesn’t show them in the best light.

Industry Analysis

The competition is divided between luxury magazine-quality photographers, moderate professional photographers who mostly pose their subjects, and same-day photo studios. 

Phoebe’s Photo Studio is not a luxury, magazine-quality studio, but our service and photo quality is high compared to other moderate professional photographers. Our rates are comparable to theirs, but we add value through personal contact and easy dissemination of digital images.


With the evolution of IT and rapidly changing technologies, Nikon has implemented e-business strategies via the setting up of websites based in USA, Europe and Japan. This will definitely enhance the marketing strategies that Nikon has adopted for the international market. The website provides a platform for users 7 days a week 24 hours a day. Furthermore, Nikon publishes a range of information regarding its products on its website. These include company profiles, company history, company philosophies, corporate and strategies statements and other financial data.

Using the marketing mix in the global market with e-business, the 4Ps wwill now become E-Product, E-Pricing, E-Place and E-Promotion.


The consumers will get information and specification about the new camera instantly online but unlike in a shop where they will not be able to see and touch it physically. For Nikon, products shall be categorized to suit each target markets. In the case of Nikon XD on the international market, it may be wise to investigate the geographical segments requiring this camera prior to launching it in a specific region.


E-Price will normally bring the price of the new camera more competitive as Nikon will no longer incur costs for stores and staff.


Using this strategy, the method of purchasing will be via the internet. Nikon will have to ensure that the product is delivered on time to the right customer. In the global context, Nikon actually possesses 3 main websites. However, as more geographic market segments are being targeted for consumers with different cultures, Nikon will have to expand its servers and security for higher volumes of consumers. For Nikon XD, the effect of E-Place will not be critical since it targets high-end consumers in countries where internet accessibility is available. Moreover Nikon being already in alliance with UPS Supply Chain will continue to focus on global logistics for competitive advantage.


E-Promotion strategy will have to include banner promotions, web public relations and E-leaflets. All these are already being provided by Nikon on their websites.

To conclude, it is vital to consider that e-marketing mix should be dependent on each other for an online marketing strategy. In the case of Nikon, embracing in e-business strategy has already started but still the resistance to change needs to be addressed. In this manner, the different risks shall be considered prior to implementing the changes drastically.

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