Wednesday, November 12, 2008

Did Ricoh or Canon Win Regarding IKON?

Armchair quarterbacks - from some who have actually been on the field -

Over at the Document Imaging Networking Executives group on LikedIn, a discussion is brewing regarding the buyout.

The question posed by group founder, Jamie Schorr:

"Did Ricoh really “win” IKON over Canon or did Canon make a decision not to play?"

One of the responses to this question from Joe Salkin , Vice President of Sales and General Manager at Duplicating Products, seems pretty poignant:

"Canon made a decision not to play. Canon was given the option to compete for the business but decided not to bid. Canon has never wanted to own IKON or anyone else for that matter however I am sure they didn't want Ricoh to have IKON either. If Canon wanted to buy IKON they could have years ago at a much lower price.

Over the last 3 years IKON's business with Canon had shrunk about 30% based on increase sales of color by Konica Minolta Color products sold by IKON vs. Canon products, and by Canon not replacing the Production Color products that Xerox picked off. 2nd I don't think Canon had much faith in IKON's Management Team, or their ability to manage their sales force. Therefore I don't think Canon wanted the headaches that came with the buy of IKON. Remember just 5 years ago IKON was a $7B company and today they won't do $4B.

I do believe Canon is going to miss the 2500 sales reps on the street, and all the business that IKON got for Canon in National Accounts that Canon will now never be able to get on their own. However over the next 5 years you will see Canon introduce new and better products, get their costs more in line with the competitors, buy up dealers across the country, and open CBS stores across the country to replace IKON/Canon sales. They will take a shot over the next 5 years but each year that will be less and less until Canon makes all or most of it up.

Last but not least Canon made up a huge part of IKON's install base and many of those customers are loyal Canon users, like Canon products, feel Canon products are the best, and will want to stay with Canon products. Therefore while IKON/Ricoh will do everything in their power over the next 4 years to flip that base to Ricoh I can assure you many and maybe most of that base will want to stay a Canon user, therefore those customers will leave IKON/Ricoh and buy from either CBS but most likely a Canon Independent Dealer to stay with Canon.

In other words in 5 years from now the big winner out of all this might just be Canon. They kept 75% of their base, and picked up additional share by opening up new CBS stores, buying up dealers, and being more aggressive on the product and marketing end of the business model and they were not the ones who paid the $1.7B for the mess that Ricoh just got. Canon will lose share in the National Account game but they will get back the placements in accounts that pay more for their products.

The next 5 years will be interesting. One thing I can guarantee you Canon will not lay down and just give up share, they are going to be coming out swinging harder than you have ever seen them. From a person who sell both Ricoh and Canon today its the best thing that could have ever happened."


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2 comments:

  1. What a load of rubbish Canon were devastated when they didnt win Ikon and were very much involved in the closed bid as were Samsung.
    The concerns in Canon top management as top why and how they lost the Ikon bid is currently a top level discussion toipic in Canons management executive board in Japan and they are very worried about the situation it leaves them in.

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  2. Anon -

    I believe you...and the world still waits to see Canon get up over this with some sort of bold move...

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