THE CANON STORY

2 012 2012 / 2 013

Kyosei

Contents
01 02 04 22 24 27 Kyosei : Canons Corporate Philosophy Message from Top Management Canon Now Excellent Global Corporation Plan Phase IV Canon up to Now Activities Focused on Tomorrow

The corporate philosophy of Canon is kyosei. A concise definition of this word would be Living and working together for the common good, but our definition is broader: All people, regardless of race, religion or culture, harmoniously living and working together into the future. Unfortunately, the presence of imbalances in our world in such areas as trade, income levels and the environment hinders the achievement of kyosei. Through corporate activities based on kyosei, Canon strives to resolve imbalances in the world. Truly global companies must foster good relations, not only with their customers and the communities in which they operate, but also with nations and the environment. They must also bear the responsibility for the impact of their activities on society. For this reason, Canons goal is to contribute to global prosperity and the well-being of mankind, which will lead to continuing growth and bring the world closer to achieving kyosei.

01

Message from Top Management

We aim to transform ourselves through flexible ideas in response to the changing times.

02

2012 is a year Canon embraces new challenges. In 2011, we faced many ordeals, beginning with the Great East Japan Earthquake. But Canon has always viewed a challenging environment as an opportunity for great advances. Addressing the needs of the changing times flexibly and with inspired ideas, we aim to return to a path of growth. And to promote further growth, we will steadily move forward with Phase IV of the Excellent Global Corporation Plan, the companys medium- to longterm management plan launched in 2011, in accordance with our corporate philosophy of kyosei. We aim to achieve the overwhelming No. 1 position in the world in our current business domains by bringing to market attractive new products and services in a timely manner. In our marketing activities, we will work to strengthen our solutions and services businesses while boosting sales in rapidly growing emerging markets. In research and development, the source of Canons competitive strength, we are focused on creating innovation in the U.S. and Europe, further developing our next-generation medical business and cultivating new technologies in the field of industrial equipment. We will also work to achieve globally optimized production, the total optimization of companywide operational processes through the full implementation of IT systems, and the acceleration of the commitment to quality first. At the same time, we will give thorough consideration to environmental and compliance issues and work to cultivate human resources capable of leading efforts to realize these transformations as part of our activities to fulfill our corporate social responsibilities. Through these activities, Canon seeks to grow and prosper over the next 100, or even 200, years with the goal of becoming a truly excellent global company that is admired and respected the world over. As we move forward, we look forward to your continued understanding and support.

Fujio Mitarai
Chairman & CEO Canon Inc.

03

Canon Now

We will continue following the path of innovation that has brought us to now and will lead us to tomorrow.
Net sales (2 011) Net income (2 011)

$45,608 million
Global ranking
Fortune
(Net sales) Global ranking (Net income) Global ranking

Asia & Oceania Japan 22.2% 19.5% Europe 31.3% Americas 27.0%

$3,188 million
Net sales

(2011)
*

FORTUNE Global 500

July 25, 2011 issue

Americas
Employees
(216th in 10) (202nd in 10)

$12,333 million 19,205

Europe

204th 171st

Evaluation of five performance measures for fiscal 2010, including net sales, net income, and total assets

FT Global 500
Financial Times
(Market capitalization) Global ranking
June 25/26, 2011 issue

122nd

(93rd in 10)

(8th in Technology Hardware & Equipment sector) Market capitalization ranking on March 31, 2011 (the number of outstanding shares multiplied by share price) * FORTUNE Global 500 isaregisteredtrademarkofTimeInc.intheUnitedStates.

Top ten U.S. patent holders by company (2011)

Rank 1 2 3 4 5 6 7 8 9 10 Organization IBM SAMSUNG ELECTRONICS CANON PANASONIC TOSHIBA MICROSOFT SONY SEIKO EPSON HON HAI PRECISION INDUSTRY HITACHI Number of patents 6,163 4,899 2,813 2,566 2,478 2,306 2,282 1,535 1,485 1,464
Canon U.S.A., Inc. Canon Europe Ltd.

Major operational sites

Research & Development Manufacturing Sales & Marketing

Based on weekly patent counts issued by the United States Patent and Trademark Office. IBM is an abbreviation forInternationalBusinessMachinesCorporation.

04

Notes: Net sales and employee numbers are based on consolidated financial statements for the fiscal year ended December 31, 2011. U.S. dollar amounts are translated from yen at the rate of JPY78=U.S.$1, the approximate exchange rate on the Tokyo Foreign Exchange Market as of December 30, 2011, solely for the convenience of the reader.

Consolidated subsidiaries (2 011)

Employees (2 011)

277
Net sales Employees

198,307
Net sales Employees

Asia & Oceania 43.4%

Japan 35.5%

Europe 11.4%

Americas 9.7%

$14,270 million 22,739

Asia & Oceania

$19,005 million 156,363

Including Japan

Business segments
Salesratiopersegment (%)

Consumer
Business Unit

36.9%

Office
Business Unit

Canon Inc. Headquarters

53.9%

Canon (China) Co., Ltd.

Canon Marketing Japan Inc.

Industry and Others

Business Unit

Canon Australia Pty. Ltd.

11.8%

Sales ratios do not total 100% due to sales between segments of 2.6%.

05

Introduction to Canon Businesses

Consumer Business Unit
Digital imaging enriches and expands the ways and means of communication in daily life.
Digital Single Lens Reflex (SLR) Cameras Digital Compact Cameras Digital Camcorders

Digital Cinema Cameras

Office Network Multifunction Devices

Office Business Unit

A variety of digital imaging solutions that deliver high image quality, high precision and high speed.
Solutions Software Laser Multifunction Devices s

Semiconductor Lithography Equipment

Ophthalmic Equipment

Document Scanners

Color Label / Card Printers

LCD Lithography Equipment

Digital Radiography Systems

Handy Terminals

Components

06

Interchangeable Lenses

Inkjet Printers / Multifunction Inkjet Printers

Commercial Photo Printers

Large-Format Inkjet Printers

Network Cameras

Compact Photo Printers

Image Scanners

Multimedia Projectors

Personal Information Products

Broadcast Equipment

Toner Cartridges

Digital Production Printing Systems

Laser Printers

Industry and Others Business Unit

Imaging technologies trusted by professionals that contribute to many different industries.
Die Bonders Organic LED Panel Manufacturing Equipment nt Vacuum Thin-Film Deposition Equipment

07

Lights! Camera! Action! Answering the call of Hollywood.

Imagine a scene from your favorite movie. Now picture this: behind the scenes there were large motion picture cameras, extensive lighting equipment and numerous staff. Yet, despite the elaborate preparations and set-up, the movies director may not have been able to fully express his or her vision. In fact, for many scenes, a director is left with no choice but to settle for a compromise. With the launch of the Cinema EOS System, Canon has made its long-awaited entry into the motion picture production industry, expanding the possibilities of creative expression while delivering exceptional imaging quality. With its compact, lightweight body, the EOS C300 digital cinema camera facilitates filming in confined spaces, such as the inside of a car. Its exceptional mobility also enables such shooting possibilities as mounting the camera on a radio-controlled helicopter. But perhaps what amazes filmmakers the most is the outstanding image quality. The EOS C300 even makes possible the capture of sharp, clear, detail-rich images in dark settings that would otherwise require additional lighting. Ushering in this new wave of filmmaking were the movie-shooting capabilities incorporated in the EOS 5D Mark II digital SLR camera. Industry professionals from around the world have praised the rugged performance of its compact, lightweight body, the wide lineup of interchangeable lenses it accommodates, and the stunning image quality and high sensitivity it delivers. Producing highquality cinematic images with beautiful background blur, the camera has been used in the production of a number of major motion pictures and television dramas. Spurred by the popularity of the 5D Mark II, Canon sought input from filmmakers working on the front lines of the industry and applied the feedback to the development of the Cinema EOS System lineup of cinematography products. With more than 70 high-performance interchangeable lenses, including new EF Cinema Lenses, the system offers extraordinary expressive capabilities. To provide complete support and direct communication with professional users, the Canon Hollywood Professional Technology & Support Center was recently opened in the heart of the U.S. cinema and television production industry . Canon is striving to provide visual storytellers with the means to convey their stories as envisioned. Perhaps the day is not far off when we will be able to enjoy watching scenes that could previously only be dreamed of.
08

Film industry professionals check out the performance of the EOS C300. Training programs featuring seminars by experts are offered.

The Canon Hollywood Professional Technology & Support Center is located in the heart of Hollywood.

EF Cinema Lenses are the culmination of more than 70 years of lens technology expertise and knowhow.

Cinema EOS System

09

A bustling street in rapidly developing Ahmedabad, Indias seventh largest city.

Image Square stores share a unified design that enhances Canons brand image.

Expanding into Emerging Markets

10

In rapidly growing Ahmedabad, India, communication is blossoming.

In the state of Gujarat in western India lies the Ahmedabad District, home of some of the most phenomenal economic growth in one of the worlds fastest developing nations. Buses, cars, rickshaws, motorcycles, bicycles and pedestrians busily shuttle in all directions around the city. Huge new shopping malls, a testament to the rising prosperity, are springing up one after another. In line with this growth has been rising demand for products and services that enhance quality of life. For Canon digital cameras and printers, which offer high image quality and ease of use, the future looks bright indeed. In anticipation of continued rise in demand, Canon India has rolled out a chain of branded retail stores called Canon Image Square. At the stores, customers are able to handle Canon digital cameras and printers to experience their performance and ease of use before purchasing them. With knowledgeable and attentive staff on hand to answer questions about the products, Image Square has gained a reputation for trustworthiness and become a popular shopping destination. As of the end of 2011, there were some 50 Canon Image Square stores in 32 major cities across India. By the end of 2014, we aim to expand this number to 300 stores in 150 cities. Canon also carries out a range of marketing activities in other emerging markets, including China, Indonesia, Russia and Brazil. All around the world,
Customers get a hands-on look at the latest Canon products, including digital cameras and inkjet and laser printers.

we strive to help people experience and enjoy the benefits of enhanced communication through Canons high-quality imaging capabilities.

11

DNA diagnosis could soon make possible customized medical treatment.

What if you could take precautions to avoid future illnesses? What if side effects from drugs could be anticipated and avoided? In the U.S., which stands at the forefront of genetic diagnosis, DNA testing is starting to challenge even conventional healthcare wisdom. There are, however, numerous restrictions, such as the high cost of testing, the limited amount of information that a single test yields, and the time required for test results. Canon U.S. Life Sciences, Inc., headquartered in Maryland, home to one of the top biotechnology clusters in the United States, conducts R&D in DNA diagnostic systems. The company plays a key role in Canons new medical business domain. Applying heater technology employed in the companys inkjet printers, which can produce heat instantaneously, Canon is developing a system that will enable DNA amplification, an essential part of DNA testing, at speeds never before achieved. Bringing together various Canon imaging technologies, the system also makes use of the CMOS image sensors found in Canon digital cameras, which deliver high-sensitivity performance to capture DNA reactions. Currently, even the simplest DNA tests take approximately one hour, but the practical application of this system could reduce the time to less than 15 minutes while enabling the testing of up to eight patients at once. Access to genetic diagnosis would not only enable the prediction of the effectiveness and side effects of drugs, but also open new doors to order-made treatments with each patient receiving the optimum combination of treatment and medication. More importantly, knowledge of ones susceptibility to certain diseases would allow preventive measures to be taken at an early stage. The development of DNA diagnostic systems and our aim to establish related business in the U.S. represents an important step in the realization of Canons Three Regional Headquarters management system encompassing Japan, America and Europe. Through continued research and development in this vital field, Canon aims to advance this technology, making genetic testing more accessible to all.

12

DNA Diagnostic Device

DNA and reagents are put into a cartridge and heated, enabling the amplification of the DNA for testing.

CMOS image sensors, featured in EOS cameras, are used to capture DNA.

Targeting practical application in the near future, Canon U.S. Life Sciences conducts verification experiments on a daily basis.

13

Commercial Printing Solutions

Adjacent to Toyota Motor Corporation headquarters, Toyota Loops has a barrierfree interior design.

Magazines and pamphlets printed by an imagePRESS C7000.

14

From catalogs to payroll stubs, the printing needs of large companies are growing.

On the one hand: brochures, posters, direct mail, manuals and business cards. On the other: confidential documents, training materials and payroll stubs. Business entities have endless printing needs. Until about a decade ago, no matter how small a print job was, companies had no choice but to turn to professional offset printing for beautiful results. Today, they can use an in-house commercial digital press, which offers high image quality and durability. At Toyota Loops, a special-purpose subsidiary of Toyota Motor Corporation (TMC) that handles TMCs internal printing, large commercial digital presses capable of paper cutting and bookbinding stand in an orderly row. Canon imagePRESS devices now handle the daily output of 300,000 sheets once handled by offset printing. Canon imagePRESS C7000-series machines deliver high-quality color printing while four monochrome imagePRESS devices produce high-resolution black and white output. Digital commercial printing simplifies such pre-output processes as the editing and processing of documents from different departments, which may come in various formats. From the first sheet to the last, users can realize highquality printing with just the press of a few buttons, and without paper waste.
Canon imagePRESS systems operate at full capacity, handling a variety of printing work.

This also benefits the in-house printing of payroll stubsa challenge because each stub contains unique information. Toyota Loops chose Canon for other reasons as well. When Toyota Loops was first established, Canon reviewed the placement of printers and the optimal workflow based on the mobility of employees. In Canons proposed arrangement, one person would be able to handle multiple printers, ensuring a safe, comfortable, high-efficiency printing environment that, unlike offset printing, is effluent free. In the growing field of commercial printing, Canon considers the customers point of view to propose products and solutions that support real needs.

15

A parade of enticing dishes at the touch of a finger. A restaurant where ordering is half the fun.

As if by magic, delectable dishes appear one after another on the white plates. Here, in the heart of London near Piccadilly Circus, an innovative restaurant called inamo st. james has been creating quite a stir. At inamo st. james there are no menus or tablecloths. There are just white tables and plates. Each table acts as a projection screen for a multimedia projector, which displays photos of the dishes onto the plates. Diners order the dishes they want with the touch of a finger on the projected image. In addition to being able to see the dishes on the menu, customers can use the projector to change the pattern displayed on the table to a design that reflects their mood. The table can also be used to play games. The multimedia projector that makes this system possible was developed by Canon. The high-definition images it projects vividly reproduce each dish in stunning detail. It also gives diners control over the ambience; the stark white tables can be instantly switched to something more colorful. The restaurant, which currently has two locations in London where a total of 128 multimedia projectors are in use, represents one example of how businesses can stay one step ahead through Canon imaging technology. We are committed to developing technologies that deliver new value to lifestyles and to society.
In addition to menu items, diners can select from a variety of scenes and patterns to project on the table to control the ambience.

A multimedia projector is installed directly above each table, adding color to communication during dining.

Imaging Solutions

16

The innovative idea of using multimedia projectors to display images on the tables has proven a hit among customers.
17

A meeting with the British Red Cross on plans to develop the skills of volunteers.

Social Support Activities

Canon supports the Study Caf project, which has ten locations in eight major cities throughout Denmark. Danish Red Cross After training, young people can go on to receive official first-aid certification. SRC, Andri Pol
18

Looking out for the future of young people together with the Red Cross.

The problems we face in todays society are not only those that are reported by the media. If you look carefully around the world, you will find that many social problems exist very close to home. The Red Cross has the worlds largest humanitarian assistance network and their activities transcend borders, religion and race. In Europe, not only are they involved in dispute- and disaster-relief activities, they also focus their energies on community healthcare and educating youths. Canon Europe, which has long provided support for these activities through charity events and various other means, formed a partnership with the Red Cross in 2006 to further strengthen the collaborative relationship the two organizations share. The company actively cooperates with the Red Crosss youth support and education projects spanning 16 European countries, including the United Kingdom, Belgium, Finland, France and the Netherlands, offering both financial and physical support to help young people deal with the issues they encounter in todays society. The Danish Red Cross launched the Study Caf project to help youths from disadvantaged communities go on to further education. Young volunteers provide assistance by helping children with their schoolwork and discussing the benefits of continuing studies. The Swiss Red Cross supports first-aid training for young people. At Canon, we believe that our corporate activities are made possible by the development of society as a whole. To support the realization of a better society, we will continue carrying out social contribution activities that are rooted in local communities.

19

Canon is cultivating global employees who respect different cultures and values.

The effects of globalization are visible everywhere you look. An incident in a single country or region can ripple through lives and economies around the world. With operations worldwide, Canon enjoys the support of its customers across the globe. As a corporation that has achieved continued growth thanks to our basic strategy of globalization, a strategy adopted shortly after the companys founding, Canon must continue responding to the progress of globalization. Therefore, it is critical that we cultivate a workforce that can excel in a global environment. One example where this applies is manufacturing, an area in which Canon excels. To develop future leaders capable of fulfilling active roles at our production sites across the world, we conduct global training programs to instill personnel with advanced technological knowledge and the organizational skills required at manufacturing facilities. Trainees spend about one year with experienced Japanese instructors, gaining the knowledge and skills for product manufacturing, and receiving practical experience using advanced equipment and measuring instruments. In addition, trainees study Canons management style and the Japanese language. Through interaction with instructors and colleagues, trainees get exposed to various cultures and values while learning about manufacturing approaches and different communication methods. It is important for global employees to remain conscious of the broader world around them. Therefore, it is essential they have contact with people from other cultures and be able to accept differing values while also successfully conveying their own values to others. For personnel who will take on management responsibilities at Canon in the future, we conduct training to provide deep international knowledge and broad global perspectives. To survive and excel in the era of globalization, Canon cultivates truly global personnel all around the world.
Vietnamese trainees recognized for their leadership potential participate in a training program.

20

Managers from Canon Group companies worldwide participate in training to enhance their management skills.

Cultivating Global Personnel

Training in the metal stamping of parts, which is vital to manufacturing at Canon.

21

Excellent Global Corporation Plan Phase IV

Accelerating our transformation into a truly excellent global company.

In 2011, Canon embarked on Phase IV of the Excellent Global Corporation Plan. Through Phases I, II and III, we strengthened our financial structure and compiled a steadily growing record of achievements. In pursuit of ongoing transformation, we aim to achieve sound growth based on the companys corporate philosophy of kyosei with the goal of becoming a truly excellent global company admired and respected the world over.

Nagasaki Canon

Oc N.V. (Netherlands)

Digital SLR camera and multifunction inkjet printer

Achieving the overwhelming No.1 position in all core businesses and expanding related and peripheral businesses

Developing new business through globalized diversification and establishing the Three Regional Headquarters management system

Establishing a world-leading globally optimized production system

At Canon, we believe sound growth is predicated on strengthening our primary businesses. With innovative and attractive industry-leading products, and an emphasis on highly profitable solutions and services, we aim to achieve the overwhelming No. 1 position in each of our primary businesses. At the same time, we continue to grow secondary businesses in related areas, such as network cameras and the retail photo segment.

Canon has intensified efforts to strengthen two new business domains: medical imaging and intelligent robots for automated production. To date, we had made Japan the center for innovation, promoting business development and diversification. Now, however, we are looking to M&A and other methods to achieve innovation in the U.S. and Europe as well, creating a global R&D framework based on our Three Regional Headquarters management system.

Canon optimizes productivity by diversifying production facilities worldwide. With the aim of achieving rational production in terms of product quality and cost, we comprehensively assess such factors as distribution, parts procurement, labor, and risk. Production is further enhanced through the in-house production of tools, materials and technologies, including automated production systems.

22

Leadership training

imageRUNNER ADVANCE

Canon Image Square (India)

Comprehensively reinforcing global sales capabilities

Building the foundations of an environmentally advanced corporation

Imparting a corporate culture, and cultivating human resources befitting a truly excellent global company

As developing and resource-rich economies in Asia, South America and Africa join the ranks of the worlds growth centers, Canon continuously assesses trends and aligns our global sales structure accordingly. In Europe and the U.S., for instance, we are strengthening our services and solutions sales force and deepening our partnership with Oc N.V. In Asia, we focus on the Chinese market while expanding sales in ASEAN countries.

As an environmentally progressive company, Canon pursues environmental conservation hand in hand with business growth. We employ technologies that support energy savings and resource conservation through every stage of the product lifecyclefrom initial design and production to eventual recycling. In all of our corporate activities, Canon undertakes efforts to reduce burden on the environment.

The enterprising spirit at the heart of Canon has enabled us to continuously transform the company over many decades. This is reflected in Canons guiding principlesthe San-ji (Three Selfs) Spirit (refer to page 25) which have been passed down since the companys founding. Today, Canon actively works to maintain a corporate culture that values transformation. At the same time, our international training programs help to develop personnel befitting a truly excellent global company.

23

Canon up to Now

The history of Canon started with the enterprising spirit to make the worlds best camera.
Precision Optical Instruments Laboratory established Kwanon camera prototype developed Hansa Canon camera introduced Precision Optical Industry, Co., Ltd. founded Japans first indirect X-ray camera introduced Company name changed to Canon Camera Co., Inc. New York branch office opened Canola 130 calculator introduced Sole European distributor, Canon Europa, established Canonet camera introduced

Hansa Canon 35mm focal-plane-shutter camera

Canonet Electric Eye (EE) camera

Canola 130, the worlds first 10-key electronic calculator

NP-1100, Japans first plain-paper copying machine

A modest beginning in a small room

In 1933, a small laboratory dedicated to making high-quality cameras was set up in a simple apartment room in the Roppongi area of Tokyo. At the time, all high-quality cameras were European with the majority coming from Germany. It was in this small room that young people with a big dream earnestly began their work on producing a high-quality Japanese camera, marking the beginning of Canon. Through hard work and with an enterprising spirit, they eventually succeeded in building a prototype, which was named Kwanon after the Buddhist goddess of mercy. The following year, in 1935, Japans first-ever 35mm focal-planeshutter camera, the Hansa Canon, was born, along with the Canon brand.

Striving for the worlds best camera

In 1950, Canons first president, Takeshi Mitarai, went to America for the first time to attend an international trade fair. Having seen modern factories and a high standard of living first hand, upon his return, he built a fireproof factory of steel-reinforced concrete in the Shimomaruko area of Tokyo, which he saw as essential for Canon to succeed in doing business with the world at large. Mitarai also made clear his respect for humanity by stressing the importance of the San-ji, or Three Selfs, spirit, the guiding principle for Canon employees. In 1955, Canon made its first step into the global market with the opening of a U.S. office in New York City. In 1957, Canon set up its sole European distributor, Canon Europa, in Geneva, Switzerland. By 1967 exports already topped 50% of the companys total sales.

Canons Corporate DNA

Behind Canons 70-plus-year history and development as a business lies its corporate DNA: a respect for humanity, an emphasis on technology, and an enterprising spirit that the company has consistently passed on since its foundation. The enterprising spirit on which Canon was started as a venture company and the relentless drive to distinguish itself through technology permeate the company, and have continued to
24

Respect for Humanity

provide society with new advances. These motivating factors are in turn supported by a respect for humanity, which encompasses meritocracy and an emphasis on good health. Canon Corporate Canon is committed to passing its corporate DNA on to DNA future generations to ensure the company grows for another Emphasis on Enterprising 100, or even 200, years. Technology Spirit

Cameras in the right hand, business machines in the left.

NP-1100 copying machine introduced PPC-1 mask aligner introduced

AE-1 SLR camera introduced LBP-10 laser printer introduced

BJ-80 inkjet printer introduced CLC-1 digital full-color copying machine introduced EOS650 AF SLR camera introduced

Company name changed to Canon Inc.

Premier Company Plan launched

PC-10/20 personal copying machine introduced

AE-1, the worlds first SLR camera with a built-in microcomputer

LBP-10, the worlds first laser printer with a semiconductor laser

PC-10/20, the worlds first personal copying machine with an all-in-one cartridge system

BJ-80, the worlds first inkjet printer using Bubble Jet technology

The challenge of diversification

Soon after its founding, Canon was hard at work in 1941 on diversifying itself with the introduction of Japans first indirect X-ray camera and other products. In the 1960s, the company took further steps toward diversification by adding electrical, physical and chemical technologies to its optical and precision technologies. In 1964, Canon entered the office equipment market with the debut of the worlds first 10-key electronic calculator. In 1967, the management slogan cameras in the right hand, business machines in the left was unveiled and in 1969 the company changed its name from Canon Camera Co., Inc. to Canon Inc. Canon took on the challenge of developing Japans first plain-paper copying machine, which it introduced in 1970, and realized further diversification from one challenging field to the next.

Averting disaster with the Premier Company Plan

By 1970, Canon grew to 44.8 billion yen in sales and more than 5,000 employees. But hit by dollar and oil shocks, followed by problems with a defective electronic calculator display component in 1974, the company fell on hard times. In the first half of 1975, it failed to pay a dividend for the first time since becoming a public company. In 1976, Canon unveiled its Premier Company Plan, an ambitious strategy to transform Canon into an excellent global company through such means as introducing a vertical business group constitution and establishing a horizontal development, production and sales system. The plan proposed high ideals and pooled the strength of its employees, enabling the company to promptly recover.

The San-ji (Three Selfs) Spirit

The Three Selfs, the foundation of the companys guiding principles that have been passed down since Canon was founded, are self-motivation, self-management and selfawareness. For Canon, which strives to be a truly excellent global corporation while maintaining the legacy of its corporate DNA, the Three Selfs continue to serve as the companys most important guiding principles.

Self-motivation Self-management Self-awareness

Take the initiative and be proactive in all things. Conduct oneself with responsibility and accountability. Understand ones situation and role in all situations.
25

Corporate philosophy of kyosei introduced with the companys second inauguration

PowerShot S100 DIGITAL ELPH (DIGITAL IXUS) compact digital camera introduced Excellent Global Corporation Plan launched

iR series of network multifunction devices introduced Toner cartridge collection and Canon Inc. ADRs listed on EOS-1Ds digital SLR recycling program launched the New York Stock Exchange camera introduced

imagePRESS C7000VP digital production Excellent Global printing system introduced Corporation Plan Phase IV launched imagePROGRAF iPF9000 printer introduced imageRUNNER ADVANCE network multifunction device introduced

PowerShot S100 DIGITAL ELPH (DIGITAL IXUS in other areas) compact digital camera

iR3250 network multifunction device

EOS-1Ds high-end professional digital SLR camera

imagePROGRAF iPF9000 large-format inkjet printer

Canons second inauguration

Canon continued to grow under the Premier Company Plan. With the dawn of the personal computer age, Canon introduced to the world a series of products never before seen, among them a personal copying machine based on an all-in-one cartridge system, a laser printer with a semiconductor laser, and a Bubble Jet inkjet printer. Canon also began promoting global production in earnest on the road to becoming an excellent global company. Then, in 1988, the 51st anniversary of the companys founding, Canon announced its second inauguration and unveiled its corporate philosophy of kyosei, an unfamiliar term at the time. It also began promoting such progressive and environmentally sound activities as toner cartridge recycling in addition to globalizing its development sites.

The Excellent Global Corporation Plan

Canon had developed unprecedented technologies and carefully nurtured them to create business opportunities and products unrivaled by any other company. But by the mid-1990s, the business division system that had been in place since the 1970s was showing signs of wear. Canon also carried debt of more than 840 billion yen, meaning the company needed to improve its financial constitution if it was to carry out long-term R&D projects and launch new businesses. Fujio Mitarai became Canons 6th company president in 1995, and in 1996 the Excellent Global Corporation Plan was launched. Transforming the corporate mindset from partial to total optimization and from a focus on sales to a focus on profits, the new plan was the start of the innovations that characterize todays Canon.

The Excellent Global Corporation Plan

Phase I
1996-2000

Phase II

2001-2005

Phase III

2006-2010

To strengthen its financial base, Canon transformed its mindset to total optimization and a focus on profit. The company instituted various business innovations, including selection and consolidation of business areas, and reform activities in such areas as production and development.

Aiming to become No. 1 in all major business areas, Canon focused on strengthening product competitiveness along with the changing times, stepping up efforts to digitize its products. The company also conducted structural reforms across all Canon Group companies around the world.

Canon moved ahead with such growth strategies as enhancing existing businesses and expanding into new areas. Through the thorough implementation of SCM and IT reforms, the company targeted the realization of real-time management to respond quickly to changes.

26

Research and Development / Design

EOS C300 digital cinema camera introduced

Procurement / Production / Distribution

Activities Focused on Tomorrow

EOS C300 digital cinema camera

Sales and Marketing / Post-Purchase Services

Seeing beyond the possibilities of today, Canon pursues innovations that enrich lifestyles and satisfy our social responsibilities.
Environment / Quality

Social Support Activities

27

Research and Development / Design

For a future of greater convenience and comfort, we are developing advanced technologies toward the creation of never-before-realized value.

The research and development of next-generation printing materials

Never content with the status quo. Continuously pursuing transformation. In the 70 years since our founding, Canon has always seen opportunities in challenges. Focused on innovation in technology, we consistently rise to face each new challenge.
Terahertz imaging technology research

28

Super Machine Vision

Super Machine Vision (SMV) endows robots with highly intelligent autonomous functionalities, such as machine learning, recognition and visual inspection. To develop SMV, Canon drew from a range of technologies, including imaging, recognition and information-processing technologies, cultivated during the development of diverse products. We aim to apply SMV in various industrial capacities and for safety monitoring.
Development of robotic vision for industrial applications

Kyoto University/Canon Joint Research Project

In collaboration with Kyoto University, we are pursuing practical applications for new medical imaging technologies. At the Clinical Research Center for Medical Equipment Development, which was established within Kyoto University, clinical research is focusing on such themes as AO-SLO for the early detection of retinal disease, and photoacoustic mammography enabling the early detection of breast cancer.
An AO-SLO (adaptive optics scanning laser ophthalmoscope)

High-Accuracy Color Management System

Kyuanos, Canons high-accuracy color management system, precisely matches colors among input and output devices, which can offer varying ranges of color expression. Not only does Kyuanos faithfully reproduce colors, it also automatically compensates for variances in color appearance due to paper type, lighting conditions and other factors.

3D CAD Design
Canon previously used two types of 3-D computer-aided design. Now we have integrated this into one system, enabling all design information, from development to production preparation, to be shared throughout the company. For example, we are now able to evaluate different parts and mass-production methods while concurrently conducting product development.

Ultra-Large-Scale, Ultra-High-Sensitivity CMOS Sensor

Based on the image sensors used in our digital cameras and other products, Canon produced an ultra-high-sensitivity CMOS sensor that is among the largest in the world. Installing the sensor in the Schmidt Telescope at the University of Tokyos Kiso Observatory, Institute of Astronomy, enabled the video recording of faint meteors with an equivalent apparent magnitude of 10.

Display Development
As a world leader in the field of imaging, Canon is actively developing next-generation high-image-quality displays. We are currently conducting R&D in such areas as organic light-emitting diode displays and ultra-highdefinition displays for professionals that surpass Full HD resolution.
Ultra-high-definition display

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Procurement / Production / Distribution

Streamlining our supply chain while raising quality. Pursuing waste-free production through innovation.

A man-machine cell (Nagasaki Canon)

At Canon, we strive to realize the ultimate in production through the implementation of information technology. From procurement and production through to distribution, sales and service, we are streamlining our supply chain management.
Cell production (Canon Suzhou)

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Globally Optimized Production

To realize globally optimized production, Canon comprehensively considers such factors as costs, distribution, procurement, labor and environmental impact when determining the locations for production bases. Advanced automated production systems and inhouse production enable us to improve price competitiveness by manufacturing products in the same region in which they are consumed.
Canon Virginia

Man-Machine Cell
Canon replaced its conveyer-belt assembly lines with the cell production system, which employs teams of skilled workers that manufacture each product in its entirety. This approach has evolved, and now makes use of advanced, high-production-capacity manmachine cells with workers performing tasks requiring a human touch and robots handling work best suited to machines.
Canon Hi-Tech Thailand

Green Procurement
Green procurement prioritizes products with minimal environmental burden. To ensure compliance with evolving regulations, we regularly update our green procurement standards, which were first published in 1997. In addition, Canon actively participates in activities organized by JEITA (Japan Electronics and Information Technology Industries Association) aimed at standardizing the survey process used to assess suppliers and other business partners.
On-site verification at a green procurement facility

Automated Production Systems

Canon is currently building automated production lines capable of running nonstop every day of the year. Development is moving forward thanks to a concerted effort by our design, production technology, and manufacturing technology divisions. Improvements in such areas as the quality control of parts are contributing to enhanced production efficiency.
Automated production of toner cartridges

In-House Production Next-Generation Logistics System

After upgrading our distribution and trading systems, Canon launched in 2011 a nextgeneration logistics system. We are moving closer toward realizing a comprehensive IT system enabling the entire supply chain to be centrally managed by integrating order-based production and shipping information.
An inkjet printer shipment (Canon Vietnam)

Aiming to deliver innovative products while minimizing costs, Canon works to produce parts and equipment in-house. In addition to key components and devices, the Canon Group internally manufactures functional parts, circuit boards and other major components, and even the molds and manufacturing equipment used to create parts.
Image sensor production (Canon Precision) 31

Sales and Marketing / Post-Purchase Services

In business and in our daily lives, Canon delivers the latest life-enriching products and solutions to customers around the world.

A Canon network multifunction device in use at an elementary school (Chicago, U.S.A.)

The Canon brand is a registered trademark in over 180 countries and regions and our global sales network continues to expand and evolve. Beyond ensuring that new products reach customers in a timely manner, Canon offers solutions and services that are ahead of the times. Our marketing activities are focused on securing the trust of our customers to ensure that Canon will remain their brand of choice.

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Europe

Americas

Canon Europe

Canon Inc.

Canon U.S.A.

Global Sales Structure

Canon U.S.A., Canon Europe, Canon China, Canon Australia and Canon Marketing Japan oversee sales in their respective regions. Through the comprehensive implementation of supply chain management, marketing activities are coordinated with development and production operations through advanced IT systems to ensure that Canon products are delivered as needed anywhere in the world. Our sales network also plays an important role in gathering input from customers, which is fed back into future development and production processes.

Canon China

Canon Australia

Canon Marketing Japan

Asia

Oceania

Japan

Marketing with Oc
Canon collaborates with Oc in marketing activities. Utilizing both Ocs products and sales network, we are further expanding our printing business. In addition to Europe, we are also strengthening our collaboration with Oc through the integration of our marketing operations in Asia and the United States.
Canon product sales training at Oc

Boosting Sales in Emerging Markets

To better serve emerging markets in Asia, Russia, the Middle East and Africa, we are strengthening our sales capabilities in each region. These efforts include enhancing local sales networks and bolstering service training, expanding awareness of the Canon brand and its trustworthiness, and introducing new products designed to satisfy local needs.
A Canon India showroom in Mumbai

Canon Managed Document Services

In response to the needs of our customers, Canon optimizes document input-output environments for businesses on a global scale, offering a comprehensive range of maintenance and operational services. Through optimal device layout and operational improvements, along with the high standard of quality service Canon provides worldwide, customers can realize significant cost savings and productivity gains.

33

Sales Network

Europe

Sodexo (France)

Canon Europe offers products, services and solutions tailored to the needs of local customers. In recent years, we have expanded our sales network into emerging markets, actively conducting marketing activities in such countries and regions as Turkey, Russia, the Middle East and Africa.

uniFLOW
With the print management software uniFLOW, developed at Canon Europe, we have strengthened our ability to develop customer-tailored solutions. Contributing to the efficient operation of printing systems and reduced total costs, the software has earned high marks from users.
Fraport (Germany)

Boosting Sales in the Russian Market

Russia is recognized as a market with huge growth potential. Building on the strong reputation of Canon digital cameras, we aim to become a respected and admired brand in the printing field through nationwide marketing activities centered on our color output devices.
The Canon booth at On Demand Russia

34

Americas

Canon Information Technology Services (U.S.A.)

Canon U.S.A. continues to grow by tapping into the potential of the U.S. market. Flexibly adapting to evolving markets and customer needs, the company constantly pursues new possibilities. With a renewed focus on providing added value to customers, we strive for growth in the market, attractive not only for

Canon Business Solutions

With more than 60 offices across the United States, Canon Business Solutions provides service and support for business and production systems. By integrating our marketing operations with those of Oc, we aim to deliver solutions to meet the needs of an even greater number of customers.
Network MFD service training

its large size, but also for the opportunities it offers to create new business.
Strengthening Sales in Latin America
Canon Latin America has launched a full-fledged effort to boost Canons presence in the burgeoning Latin American market. We are expanding our marketing activities in such growing markets as Brazil, the regions largest national market, as well as Peru and Colombia.
A demonstration for dealers (Bolivia)

35

Asia & Oceania

A Canon China showroom in Beijing

In Asia and Oceania, which includes the rapidly growing markets of China and India, Canon China and Canon Australia play central roles in our marketing activities. Canon China, which oversees operations in Asia, takes into consideration each country and regions unique customer needs to

Marketing in China
Canon Chinas marketing and service activities are tailored to the Chinese market. Through the promotion of Chinese-language product brand names and large-scale product launch events, the company is enhancing awareness of, and affinity for, the Canon brand among consumers.
A product launch on Nanjing Road, Shanghai

provide ideally suited products. The company aims to create an emotional bond with customers through its marketing activities. Canon Australias sales and marketing activities focus on new distribution channels linking Canon products and services to customers throughout Oceania.
World of EOS
Canon Australia adopted an interactive approach in its sales promotion campaign for digital SLR cameras, which included the launch of a Web community for photographers using Canon cameras and recognizing outstanding photographic works.
An EOS camera photo exhibit

36

Japan

A Live Office at Canon System & Supports Kanagawa branch

The Canon Marketing Japan Group oversees marketing activities and provides solutions for the Japanese market, capitalizing on the consolidated strength of the Groups 26 companies. The Live Office, which makes use of the Groups own offices as showrooms, offers document solutions centered

New Data Center

Canon IT Solutions is building a data center featuring some of the most sophisticated technology and security in Japan to protect valuable customer information. The facility is scheduled to begin operation in the autumn of 2012.
NishiTokyo Data Center (artists conception)

on digital multifunction devices. The company also delivers new solutions, including a data centerbased cloud service. For lifestyles, for business, and for society, Canon Marketing Japan Group is committed to delivering value across a wide range of fields that surpasses customer expectations.
Canon Customer Support Center

Customer Support
Canon Customer Support, which enables the prompt and efficient handling of customer inquiries, was the first customer contact center in Japan to receive the international COPC-2000 CSP management quality standard for four locations at once.

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Environment / Quality

For the future of people and the planet, we strive to reduce environmental burden and offer more enriched lifestyles.

A PIXMA MG6200-series multifunction inkjet printer featuring advanced environmental performance

Canon pictures a future where the Earths thriving natural environment co-exists with societys increasingly enriched lifestyles. To provide customers with a greater feeling of safety, peace of mind, and satisfaction, we are working tirelessly to improve product performance while minimizing environmental burden.
Quality inspection of toner cartridges (Canon Virginia)

38

Bio-Based Plastic
The use of bio-based plastic, a plant-derived material, reduces oil consumption and CO2 emissions during manufacturing. Canon and Toray Industries, Inc. developed a bio-based plastic material that achieves the worlds highest level of flame retardance, which is used in the exterior parts of Canons network multifunction devices and digital production printing systems.
One of the industrys largest exterior parts employing biobased plastic

Action for Green

Based on our Action for Green environmental vision, Canon works to create a society in which enriched lifestyles and the Earths environment can co-exist. Action for Green covers all phases of the product lifecycle produce, use and recycleand we carefully monitor the progress of all related activities.

Ink Cartridge Recycling

In 1996, Canon initiated a service in Japan to collect used ink cartridges, and has expanded this service to include Asia, Oceania, North America and Europe. Furthermore, for more than 20 years, Canon has been collecting and recycling toner cartridges for laser printers and other devices worldwide.
Collection of used ink cartridges (Singapore)

Improving Products Based on Customer Feedback

To improve the quality of our products, Canon gathers customer feedback and applies it during new product development. For example, in response to requests from medical practitioners, we produced wireless digital radiography devices that are free of cables. In addition to being easier to use, these devices are compact and lightweight, offer reduced X-ray exposure to patients, and deliver high-image-quality results.

Environmentally Conscious Office Design

Canon sales offices and other business facilities are designed to conserve energy and other resources. Canon Spains headquarters building, for example, adopts a system that optimizes energy efficiency throughout the entire structure. This system automatically controls the amount of sunlight that enters the building to maintain a comfortable temperature and optimal lighting while minimizing energy use.
Canon Spain headquarters

R&D for wireless digital radiography equipment

Quality Verification Testing

Canon uses strict standards when conducting quality testing to ensure products are safe and reliable. Measurement testing for such aspects as noise, flame resistance and electromagnetic radiation is conducted at state-of-the-art facilities that have been certified for ISO/IEC and UL testing. As a result, we are able to increase development speed and product quality.
Anechoic chamber (Tamagawa General Measurement Testing Laboratory) 39

Social Support Activities

Striving to be a globally admired and respected company through CSR activities that help build a better society.

Canon Green Library for Kids provides textbooks and childrens books. (Vietnam)

To fulfill our social responsibility as a good corporate citizen, Canon carries out a diverse range of activities in accordance with the companys newly adopted CSR policy. These activities, which include environmental conservation, the promotion of arts and culture, and support in disaster-stricken areas, are designed to meet the needs of each region.
Canon PhotoMarathon (Singapore)

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Canon Group CSR Activity Policy

The Canon Groups approach to CSR is spelled out in our CSR activity policy. Leveraging our advanced technological strengths, global business deployment, and diverse, specialized human resources, we aim to contribute to the realization of a better society.

The Tsuzuri Project Canon Wind

Canon Wind Inc., a special subsidiary of Oita Canon Inc., was established in cooperation with the Gyoun Welfare Association to expand employment opportunities for people with intellectual disabilities. Many of Canon Winds employees manufacture accessories for the digital cameras produced by Oita Canon.
Canon Wind staff at work

The Tsuzuri Project is a social-contribution initiative jointly organized by Canon and the Kyoto Culture Association (NPO). Canon digital technology and traditional Japanese craftsmanship come together to create highresolution full-scale facsimiles of Japanese cultural assets, many of which are no longer in Japan. As the works are donated to museums and the original owners, the project contributes to the passing on of important Japanese culture.
A section of Seven Sages in a Bamboo Grove, Kenninji Temple

WWF Conservation Partner

In 1998, Canon Europe became the first corporate Conservation Partner of WWF (World Wide Fund For Nature). This alliance has enabled WWF to expand awareness of the Polar Bear Tracker project and provided imaging equipment for activities in Europe, the Middle East and Africa.
Mondweg Elementary School in Vienna, Austria

Envirothon
Since 1997, Canon U.S.A. has supported Envirothon, one of the largest environmental education competitions for high school students in North America, which attracts more than 500,000 participants every year. In 2011, some 270 U.S. and Canadian winners from the preliminary rounds participated in the final round of the competition. Through fieldwork and presentations, Envirothon helps students deepen their understanding of nature and the environment.
An outdoor class on aquatic ecosystems

Green Volunteer Action

Green Volunteer Action is a program for Chinese university students organized by Canon China in cooperation with the China Wildlife Conservation Association. Participants learn animal and plant photography and their photographs are used in environmental education materials. In 2011, student participants from ten universities across China visited the Dinghushan National Nature Reserve in Guangdong.
Nature photography field training 41

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CANON (UK) LTD.

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CANON FRANCE S.A.S.

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CANON (CHINA) CO., LTD.

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Canon Inc. 2012 PUB.AEP036 0612