MM4772 Product Management

Individual Assignment

Hong Kong Polytechnic University

2014-2015
Sem1

MM4772
Product Management
Individual Assignment

Name: Siu Chun Hei, Leo

SID: 12121608D
Class: Tut005

A. Background
Company: Canon
Product: Micro digital single-lens reflex camera
Location: Hong Kong
B. Introduction
As our company is deciding to develop micro digital single-lens reflex camera
(DSLR)which aims at minimize its size to capture more customers, our team has

MM4772 Product Management

Individual Assignment

done various research to study the real market situation of camera. As a Hong Kong
regions product manager, I need to have an in-depth data collection and evaluate the
market comprehensively. In this paper, the Category attractiveness will first be
analysis, and the Competitor analysis will be done afterwards as well.
C. Category attractiveness analysis
The Michael Porter's Five Forces Model(Table 1) will be used to analyses the
attractiveness of of the micro-DSLR camera segment
1. Category factors
1.1 Intensity of rivalry: [+]
The intensity of rivalry is quite high, although there are many firms in the market,
including, Sony, Leica, Nikon, Olympus and Hasselblad(Figure 1), few of them have
them have developed in micro-DSLR camera.
1.2 Pressure from substitutes: [-]
The pressure from substitutes is high since smartphones nowadays usually includes a
camera with uneven quality, which changes the user habit to snap and share.
According to a research conducted by NPD Group, the percentage of photos taken
with a smartphone (Apple iPhone or any other smartphone) went from 17% in 2011 to
27% in 2012.(Figure 3)
1.3 Threat of new entrants: [+]
The threat of new entrants is low due to the huge capital requirement and high product
differentiation well-established brand identity and customers loyalty. Moreover,
the production of micro-DSLR camera requires high-technology and complex
procedure, which will also become a barrier for new entrants.
1.4 Buyer bargaining power: [+]
The buyer bargaining power is low because the cost for customer to switch to other
brand is very high. Every firm has their own techniques and accessories, lens from
different brand are all identical, so it is very costly to shift to another brand.
2. Aggregate factors
2.1 Market size: [+]
The market size is large as Hong Kongs photography is quite popular and Canons
production is dominant all around the world.
2.2 Market growth: [-]
The market is growing slowing(Figure 2), the whole camera industry is in the
maturity stage of product life cycle.
2.3 Profit level: [+]
The profit level is acceptable, since as a high-end product, micro-DSLR camera will
have a high profit margin, yet large amount of money needed to invest in building
brand image for differentiation (High product standardization), the profit level is only
acceptable.
2.4 Sales cyclicity and Seasonality: [+]
Micro-DSLR camera will not be limited by the sales cyclist and season, so it is easy

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to manage the inventory and a steady profit can be generated.

3. Environmental factors
3.1 Economic: [+]
Since the GDP of Hong Kong per capital is increasing in recent years, people are tend
to have more purchasing power.
3.2 Technological: [+]
For camera industry, technology is the most essential part. Due to the mature
development of semi-conductor, the weight and size of a camera can be reduced and it
is really beneficial to the production of micro-DSRL camera.
4. Summary
Our team created a template to calculate the attractiveness of micro-DSRL and the
score is 3.1 out of 5.(Table2-4). It shows that micro-DSLR camera is still an attractive
product despite the fact that the low-end market is occupied by smartphone, we
believe that minimize the size of DSRL can attract more customers, expand our
current market shares and generated steady profits.
D. Competitor analysis
As shown in Figure 1, Nikon have similar market shares compared with Canon and
they are all companies first started it business in Japan, sharing similar culture and
system. And by using perceptual map to analyses, we can conclude that both Canon
and Nikon focus on developing high quality products with affordable price. So Nikon
is the major competitor of Canon.
1. Competitors current objectives
Nikon is now having a growth objective, from the Annual Report 2013, Nikon
announce its new goal and strategiesthat is to expend its market share and with a
new promotion method. By investing a large amount of money in sponsoring various
photography competitions and exhibitions, Nikon try to capture more eyesight from
the world.
2. Current strategies
2.1 Product
From the below product feature matrix (Figure 6), we have choose Canon 5D and
Nikon D800 to have comparison, and the results show that the DSRL produced by
Canon is slightly better, but Nikon should not be underrated because the score is very
close, showing that Nikon has a similar production techniques compared with Canon.
2.2 Promotion
In Hong Kong, Nikon has organized a photography competition named Nikon Photo
Contest International. Apart from that, Nikon will also held exhibitions for
publishing new cameras, participant will have a chance to test the new products.
Finally, Nikon sponsored various activities to improve their brand image, for example,
Nikon x Manfrotto is a event that both the camera and necessary tools
will be provided, participant were then be invited to to have a photography

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class.
2.3 Price
As stated in the perceptual map, DSRL produced by Canon and Nikon share similar
price, ranging HKD$6000 to HKD $18000\
2.4 Place
Products of Canon and Nikon can both be found in any popular camera retailer, such
as Broadway, Fortress etc.
E. Recommendation
All in all, Canon is definitely the leading company in the whole industry, but in order
to respond to the raise of smartphone, it is a must to improve the DSLR camera.
Minimizing the size and keep the high quality of the camera is a way to attract more
customers since most of the professional DSLR cameras are very heavy compared
with smartphone. When users think it is no longer a burden to carry the camera, they
will start to compare the image quality, which is our superiority to expand the market.
End
Word: 987

Appendix
Table 1 Aggregated market factors and Category fators

Attractiveness

Aggregated market factors

Market size
Market growth
Sales cyclicity
Sales seasonality
Profit level
Profit variability
Category factors
Threat of new entrants
Power of buyers
Power of suppliers
Rivalry
Pressure form substitutes
Unused capacity

High

Low

+
+
+
-

+
+
+

+
+
+
+
+
+

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Table 2 Category Factor

Factor
Threat of new entrants
Power of buyers
Rivalry
Pressure form substitutes
Total

Rating(1-5)
4
3
3
1
/

Weight
0.1
0.05
0.1
0.1
0.35

Value
0.4
0.15
0.3
0.1
0.95

Table 3 Aggregated market factors

Factor
Rating(1-5)
Market size
5
Market growth
2
Sales cyclicity& seasonality
4
Profit level
3
Total
/

Weight
0.1
0.15
0.05
0.2
0.5

Value
0.5
0.3
0.2
0.6
1.6

Table 4 Environmental Factors

Factor
Rating(1-5)
Economic
3
Technological
4
Tota;
1

Weight
0.05
0.1
0.05

Value
0.15
0.4
0.55

Figure 1

Figure 2

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Source: Canon Annual Report 2013

Figure 3

Source: The NPD Group/Imaging Confluence Study 2011

Figure 4

Figure 5 Perceptual Map

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Figure 6 Product Feature Matrix

Reference List
1.

Port Washington. (Dec 22, 2011) Consumers Now Take More Than a Quarter of
All Photos and Videos on Smartphones. NPD Group Oct 6, 2014 from
https://www.npd.com/wps/portal/npd/us/news/press-releases/pr_111222/

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2.
3.
4.

5.

6.
7.
8.

Francois Malan. (July 11, 2012). Which DSLR camera brand is the best?.
Photography blog and Portfolio of Franois Malan. Retrieved Oct 5, 2014, from
http://francoismalan.com/2012/07/jdpower_dslr_satisfaction_ranking.
Julius Motal. (Feb 8, 2013). DSLR Sales Are Down?. The Phoblographer.
Retrieved Oct 4, 2014, from http://www.thephoblographer.com/2013/08/02/dslrsales-are-down/
Dirk Singer. (Sep 29, 2013). The digital camera market continues to drop thanks
to smartphones. Lies Damned Lies Statistics. Retrieved Oct 6, 2014, from
http://liesdamnedliesstatistics.com/2013/09/the-digital-camera-market-continuesto-drop-thanks-to-smartphones.html.
Indiatimes. (May 27, 2013). Smartphones Responsible For Declining Digital
Camera Sales: Assocham Study. Before Its News. Retrieved Oct 4, 2014, from
http://beforeitsnews.com/science-and-technology/2013/05/smartphonesresponsible-for-declining-digital-camera-sales-assocham-study-2597218.html.
Will Ashworth. (Jan 31, 2013). The Digital Camera Market: An Ugly Picture.
Investor Place. Retrieved Oct 8, 2014, from http://investorplace.com/2013/01/thedigital-camera-market-an-ugly-picture/.
Dpreview staff. (Aug 1, 2013). Camera shipments continue to fall. Dpreview.
Retrieved Oct 7, 2014, from http://www.dpreview.com/news/2013/08/01/camerashipments-2013-CIPA.
Photoscala. Japanese 2012 market analysis: Only High End product sales didnt
decline. Sonyalpha Rumors. Retrieved Oct 7, 2014, from
http://www.sonyalpharumors.com/japane-2012-market-analysis-only-high-endproduct-sales-didnt-decline/.