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Studocu is not sponsored or endorsed by any college or university Analysis on Ricoh Canada Inc Management (Universiti Kuala Lumpur) Studocu is not sponsored or endorsed by any college or university Analysis on Ricoh Canada Inc Management (Universiti Kuala Lumpur) Downloaded by kelkins kelkins (kelkins102@gmail.com) lOMoARcPSD|28769488

1.0 Executive Summary The Ricoh Company is a Japanese multinational imaging and electronics organisation founded in 1936 (Ricoh, 2020). Their subsidiary, Ricoh Canada Incorporated (RCI) is standing alongside large name such as Canon, Xerox, and Hewlett Packard as the largest copy and imaging company in North America. Developments in technology have push away the traditional market of paper printing services with digital printing. The traditional printing reached its maturity phase with modern technique that enables printing from electronic files. Therefore, having a good strategic management is relevant where organisations are constantly disrupted by technological innovation. The change in consumer behaviour due to global trends became Ricoh biggest obstacle as industry is rapidly evolving. The dependency of income from legacy business starting to affect RCI profit in decreasing margin. Therefore, report on Ricoh is prepared to diagnose internal and external environment and identify strategic improvement for the next five years based on current situation. 2.0 SWOT Analysis on Ricoh Canada Inc. Figure 1.1 SWOT Analysis Downloaded by kelkins kelkins (kelkins102@gmail.com) lOMoARcPSD|28769488

2 Ricoh Canada Inc. Analysis 2.1 Strengths RCI has financial advantage with strong cash flow due to capital investment from its legacy that enable the company to support against its rivals. The ‘Kaizen’ culture brought by parent company has encourage employees to be proactive in incremental improvements and create long-term value through action plan. In return, RCI gain strong reputation in customer service supported by high RCI rating in Net Promoter Score (NPS) of 80% which explains satisfied customer (Ricoh, 2020). Loyal customers offer positive endorsements whereby they are willing to recommend Ricoh’s services to others subsequently, brings to good brand equity (Ameritas, 2020). Ricoh was able to avoid the 96% of American businesses that closed down in 10 years’ time due to poor customer service due to their continuous effort in customer relationship management among existing and potential customers (Ameritas, 2020). Ricoh consists of highly skilled technical labour from successful training and learning programs that resulted in motivated employees which subsequently increase end-user experience and promote market share. Competent and committed human capital is a powerful element to gain competitive advantage especially in a service-oriented business. Another strengths that RCI possess is having a strong base of reliable supplier. Access to suppliers that offer raw material also improve the overall business efficiency. Ricoh has integrated several technology firms to streamline its operations through merger and acquisition to strengthen their supply chain that allow quick product delivery to end user. 2.2 Weaknesses Although RCI exceeded customer expectations but its practices may not be sustainable with internal obstacle that could prevent the company to grow. Ricoh is operating under the influence of their parent company in Japan. The ‘Kaizen’ culture does bring positive atmosphere of becoming successful however, RCI may not be able to compete in an intense environment with its overreliance on headquarters for innovations. It reduces efficiency in operations when decision making is centralised due to time consuming. Also, with no research and development (R&D) faculty in North America making it more difficult for RCI to stand alongside with large firms. Buyers still view RCI as ‘printing people’. Their past investment By Musyirah Ismail MGT 71104 Strategic Management Downloaded by kelkins kelkins (kelkins102@gmail.com) lOMoARcPSD|28769488

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3 Ricoh Canada Inc. Analysis into legacy business as compared to prioritizing future innovation resulted to an inexperience in the new service industry. RCI is strong players on one end (LDS and RMS services) but they fall far behind its rivals in cloud services. Exhibit 6 explains Ricoh IT/Professionals services where they have yet to put their skilled workforce to use even in existing products although it accounts $900 billion on global market. The company lacks on training sales team rather focus more on geographic and key named accounts. Meanwhile, their competitors, HP have integrated printing hardware and solutions software. Plus, the company failed to utilise the newly acquired IKON due to human resource inefficiency which showcases their poor spending strategy. As shown in balance sheet, total assets have decreased that indicates a decreased reliance on hardware sales and poor inventory management. This can lead to constricted cash flows in future given the slowdown condition in the printer space market. 2.3 Opportunities Technological developments have brought firms to be automated to reduce costs. A significant increase of demand for cloud computing and remote monitoring services are found due to fast growing IT. The shift in corporate behaviour to paperless offices with heavy reliance on technology to maximise workflow creates opportunity for Ricoh. Besides, there is higher chance in the service industry that is worth $24 billion as compared to only $4.5-5 billion market worth in hardware. Many from the same industry had emerge to current needs thus, its critical for RCI to remain ahead of the competition. Currently, Ricoh focuses only on B2B line meanwhile its rivals operate on B2C line. Therefore, penetrating B2C by offering identical incentives as others can dent the service market and gain competitive advantage. Subsequently, provides new revenue opportunities for Ricoh Canada to increase their market presence. By growing in the cloud services, RCI can access to government contracts as there has been an increase in spending to go green in education and healthcare institution to adopt new technology standard that offers Ricoh to emerge new market. The government aimed to execute shared cloud hubs to 65% of its states and more e-learning are expected to be implement in the education system. The action to expand customer base also means the need to prepare costs of By Musyirah Ismail MGT 71104 Strategic Management Downloaded by kelkins kelkins (kelkins102@gmail.com) lOMoARcPSD|28769488

4 Ricoh Canada Inc. Analysis innovation. This should not be a problem for RCI with their current strong financial position. The company can further invest into R&D to leverage their quality service. 2.4 Threats Despite the opportunities that was presented as a result of globalisation, the environment can also offer threats for Ricoh Canada. The decrease in demand for high quality printers where growth relies on new technology due to changing on consumer buying behaviour can disrupt the existing physical infrastructure supply chain model. Also, Ricoh failed to recognise early on the rapid shift for cloud computing and remote monitoring after the adoption of Internet into digital imaging. Meanwhile, most competitors in printing industry have heavily invested in IT and service sector and shifts the industry standards. The presence of well-established firms in IT and service industry like HP has created holistic offerings that will threaten Ricoh position in the industry even if they enter into new segment. As there is only a few products have high market share conquered by firms like Canon and Xerox with larger market share. Thus, the remaining products make Ricoh vulnerable to threats if these products suffer. The fact that that Ricoh only holds 10% of market share as shown in Exhibit 2 whereas HP possess the largest market share of 37% followed by Lexmark of 21% is also threatening. Since RCI is operating and sourcing its product from several countries thus, exchange rate fluctuations can hinder revenues. The decrease in net margin indicates the need to cut cost especially when Ricoh not having any hedges in place for currency translation. By Musyirah Ismail MGT 71104 Strategic Management Downloaded by kelkins kelkins (kelkins102@gmail.com) lOMoARcPSD|28769488

5 Ricoh Canada Inc. Analysis 3.0 Comprehensive Strategic Plan for 5 Years Figure 1.2 Five Years Planning 3.1 Year 1: Reviewing Strategy RCI need to mitigate from its present strategy where current vision and mission are still in focus of B2B segments. Instead, be proactive to plunge every opportunity that brings them closer to IT segment. Reviewing strategy is vital because the essence of business model is seen through vision and mission that illustrates company’s direction of core activities. RCI would need to look at current business landscape based on SWOT analysis and re-evaluate to identify future direction (Ahmed, 2019). The dimension of customer service needs to be taken into consideration to match organisation offering given their capability to stay strong despite intense competition. Vision statement facilitates a firm strategic, managerial and decision-making process. These statements serve as focal point for subordinates to follow in organisational climate to translates into actionable cost, performance and time related measures to develop like-minded company (Ahmed, 2019). Having said that, RCI competitive advantage can also be utilise for public-relations tools to engage larger segments and develop business partnerships. By applying SMART model into objectives, allows RCI to compare number units planned to sell versus the actual occurrence to understand the underlying reasons and make coordinated effort accordingly. Thus, the company can consider the resources and finance required over the long haul and skills available to reduce the time frame in identifying gaps in the market. SMART model that composes of specific, measurable, achievable, realistic and time bound attributes also helps to create new value for customers through ingenuity and solutions (Gregory, 2020). An objective can only be strategic if a firm put words into action. By Musyirah Ismail MGT 71104 Strategic Management Downloaded by kelkins kelkins (kelkins102@gmail.com) lOMoARcPSD|28769488

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6 Ricoh Canada Inc. Analysis 3.2 Year 2: Construct Plan on Reducing Expenses Cost concept is essential in any organisation to influence decision-making process. The development of business strategy revolves around their financial position. Firm will not be able to remain competitive if managers fail in identifying and evaluating strategic investment. The shift from imaging space towards online service should have decrease the requirement of physical products. However, report indicated that most expenses are to be found in sales, administration and operating expenses. In time, this cost will lead to increase in production cost and may cause difficulties to maintain customers (Akeem, 2017). RCI can only improve their profit margin if they reduce their expenses and be more selective for every outgoing dollar. A planned cost reduction should not reduce the service rendered instead, RCI need to critically examine elements of costs of each aspect of their business. Digital marketing services for instance, is more cost-effective in comparison to the traditional marketing. Thus, management would need to reconsider the actual number of employees that is required. Resources must be sacrifice in improving standards of organisation process in the nature of working (Akeem, 2017). Cost control subsequently aids in stimulating market demand where RCI can sells its product at lower rate without disrupting its quality. Besides having price advantage, higher profit margin will in return attract potential investors. 3.3 Year 3: Product Development Strategy Ricoh need to adapt strategy, structure that allow managers a better control of planning and execute in an integrated way to embrace current turbulent environment. The adoption of differentiation strategy in the extends of product line is significant to reduce brand pressure that they are facing now. To ensure that growth strategy is in line with cost leadership strategy, RCI can use its existing infrastructure in product line extension that resonate the new behaviour. When the opportunity in healthcare is expected to grow, RCI should start to leverage its core technologies in that dimension and began R&D into magnetospinographic measuring devices to visualize neural activity transfers. The transition into IT and services market would be easier than establish new operation to maintain high-profile relationships from its B2B sales environment. Thus, building R&D lab By Musyirah Ismail MGT 71104 Strategic Management Downloaded by kelkins kelkins (kelkins102@gmail.com) lOMoARcPSD|28769488

7 Ricoh Canada Inc. Analysis will help the company to realize future growth faster and shift technology to where the trend is heading. This alternative shall assist RCI to remain dominant player in the market, hence, reflect its objectives. Research indicates that nearly 90% of organisations failed to translate strategies from operational objectives into activities and would be worthless if there is no clear understanding of management role. To do so, it takes collaborative team effort that involves all organisational level to implement activities. 3.4 Year 4: Re-establishing Sales Team Besides emerging new market like healthcare, Ricoh would need to ensure that sales team embrace changes that revamp brings when incorporate B2C line because they are the front lines that conveys company identity. Salespeople bridge the gap between customer needs and products they are offering (Traiman 2013). Customer retention don’t seem to be a barrier however, new number of customers is a growing concern. The current ratio of new customer, 4 to 1 shows that changes is necessary even if company excels in their R&D. In adding new product to the line, sales management helps to improve product development and achieve optimal sales volume. Sales lead conversions and if they don’t have the advantage of personal knowledge to deliver the sales pitch it may disrupt their credibility and trust among customers (Traiman 2013). Investment in sales training is essential to deliver core values especially in a service sector where demand and preference continue to shift. Research indicates that 60% salesforce face more difficulties in today’s environment than it was five years ago (Ameritas, 2020). Battle can only be won if firm utilise their employees well to generate bigger bottom line. Training means more than influencing potential customers but also identifying method to engage, discuss their needs and offer the right solution to close the deal. By empowering the sales force, RCI can remain competitive to deliver the ongoing value that RCI have long possessed in customer service dimension. 3.5 Year 5: Merger and Acquisition in Market Share Expansion The field of services offer remarkable results however, to some extend such offering can come at cost. Technology companies will face greater obstacle in the fifth year in search of new By Musyirah Ismail MGT 71104 Strategic Management Downloaded by kelkins kelkins (kelkins102@gmail.com) lOMoARcPSD|28769488

8 Ricoh Canada Inc. Analysis ideas, products, trained knowledge workers or additional market share. Also, it costs five times more to attain new customer than retaining existing ones therefore, the scope of expansion need changes (Ameritas, 2020). Although technicians at RCI are integral part of their service, however, profits accounted is insufficient even with advanced technology. This is where mergers and acquisition (M&A) come into strategy and it appear to be a norm as companies find it challenging to compete in the marketplace over the years (Depersio, 2020). In 2012, reports show cross-border M&A in IT services worth $1.4 billions. Acquiring foreign or local firms with better experience and knowledge, RCI shall increase market presence subsequently, strengthen their capability with specific skill set (Goedhart, Koller and Wessels, 2017). Besides reducing competition, the rationale behind M&A is geographical penetration. This activity helps RCI to consolidate their weakness in regional growth in dealing with sales and marketing to enter certain location. Acquiring have created value in the past therefore, RCI are more likely to succeed in this way as it is cost effective and saves time on innovation process without having to wait on Japan. Besides that, they can access funds and valuable assets for long-term prospects with their own distribution channels (Nibusinessinfo.co.uk., 2020). 4.0 Conclusion It is evident that thinking strategically is a prescription in an increasingly volatile environment to integrate traditional business disciplines like accounting, sales and other aspects. Developing a strategic landscape is not just about crafting and execute the plan instead, firm need to constantly review and measure their strategic approach if they are in accordance with the fast-changing market forces. Ricoh’s present strategy has been successful in the past due to their focus on traditional printing products and software however, new and fresh strategy is needed as they have reached a stagnant growth. Company executives need to have sharp analytical skills to strengthen their long-term competitive position and overcoming obstacles as well as leveraging opportunities (Masumi, 2019). Besides financial gain, being able to anticipate changes allow RCI to be effectively control over the desired results where resources like workforce are put at the best of their efficiency. (2390 words) By Musyirah Ismail MGT 71104 Strategic Management Downloaded by kelkins kelkins (kelkins102@gmail.com) lOMoARcPSD|28769488

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9 Ricoh Canada Inc. Analysis By Musyirah Ismail MGT 71104 Strategic Management Downloaded by kelkins kelkins (kelkins102@gmail.com) lOMoARcPSD|28769488

10 Ricoh Canada Inc. Analysis 5.0 References Ahmed, A., 2019. Importance Of Mission Vision In Organizational Strategy . [online] Small Business - Chron.com. Available at: <https://smallbusiness.chron.com/importance- mission-vision-organizational-strategy-16000.html> [Accessed 13 January 2021]. Ameritas,. 2020. Why Good Customer Service Is Important . [online] Available at: <https://www.ameritasinsight.com/employee-benefits/industry-buzz/why-good-customer- service-is-importanthttps://www.ameritasinsight.com/employee-benefits/industry- buzz/why-good-customer-service-is-important> [Accessed 15 January 2021]. Akem, L., 2017. Effect of Cost Control and Cost Reduction Techniques in Organizational Performance. International Business and Management , [online] 14(3), pp.19-26. Available at: <https://core.ac.uk/download/pdf/236300505.pdf> [Accessed 18 January 2021]. Depersio, G., 2020. Industries Where Mergers And Acquisitions Are Most Common . [online] Investopedia. Available at: <https://www.investopedia.com/ask/answers/050715/which- industries-are-mergers-and-acquisitions-most-common.asp> [Accessed 13 January 2021]. Goedhart, M., Koller, T. and Wessels, D., 2017. The Six Types Of Successful Acquisitions . [online] McKinsey & Company. Available at: <https://www.mckinsey.com/business- functions/strategy-and-corporate-finance/our-insights/the-six-types-of-successful- acquisitions#> [Accessed 12 January 2021]. Gregory, A., 2020. Here Are Some Business Goals That Follow The SMART Criteria . [online] The Balance Small Business. Available at: <https://www.thebalancesmb.com/smart-goal- examples-2951827> [Accessed 17 January 2021]. Masumi, P., 2019. Importance Of Strategic Management . [online] Essays, Research Papers and Articles on Business Management. Available at: By Musyirah Ismail MGT 71104 Strategic Management Downloaded by kelkins kelkins (kelkins102@gmail.com) lOMoARcPSD|28769488

11 Ricoh Canada Inc. Analysis <https://www.businessmanagementideas.com/strategic-management/importance-of- strategic-management/20167> [Accessed 16 January 2021]. Nibusinessinfo.co.uk. 2020. Benefits Of Mergers And Acquisitions | Nibusinessinfo.Co.Uk . [online] Available at: <https://www.nibusinessinfo.co.uk/content/benefits-mergers-and- acquisitions> [Accessed 15 January 2021]. Ricoh, 2020. Who We Are . [online] Available at: <https://www.ricoh.ca/en/about-us/who-we- are> [Accessed 13 January 2021]. Traiman, L., 2013. Why Sales Training Is Critical To A Company’S Success . [online] Available at: <https://www.business2community.com/sales-management/why-sales-training-is- critical-to-a-companys-success-0593930#:~:text=It%20is%20extremely%20important %20that,huge%20returns%20for%20a%20company.&text=Communication%20skills %20are%20essential%20in,the%20products%20and%20services%20offered.> [Accessed 14 January 2021]. By Musyirah Ismail MGT 71104 Strategic Management Downloaded by kelkins kelkins (kelkins102@gmail.com) lOMoARcPSD|28769488

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