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INTRODUCTION
Strategic Management is all about identification and description of the strategies that managers
can carry so as to achieve better performance and a competitive advantage for their organization.
An organization is said to have competitive advantage if its profitability is higher than the
average profitability for all companies in its industry.
Strategic management can also be defined as a bundle of decisions and acts which a manager
undertakes and which decides the result of the firms performance. The manager must have a
thorough knowledge and analysis of the general and competitive organizational environment so
as to take right decisions. They should conduct a SWOT Analysis (Strengths, Weaknesses,
Opportunities, and Threats), i.e., they should make best possible utilization of strengths,
minimize the organizational weaknesses, make use of arising opportunities from the business
environment and shouldnt ignore the threats. Strategic management is nothing but planning for
both predictable as well as unfeasible
contingencies. It is applicable to both small as well as large organizations as even the smallest
organization face competition and, by formulating and implementing appropriate strategies, they
can attain sustainable competitive advantage.
Strategic Management is a way in which strategists set the objectives and proceed about attaining
them. It deals with making and implementing decisions about future direction of an organization.
It helps us to identify the direction in which an organization is moving.
Strategic management is a continuous process that evaluates and controls the business and the
industries in which an organization is involved; evaluates its competitors and sets goals and
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strategies to meet all existing and potential competitors; and then reevaluates strategies on a
regular basis to determine how it has been implemented and whether it was successful or does it
needs replacement.
Strategic Management gives a broader perspective to the employees of an organization and they
can better understand how their job fits into the entire organizational plan and how it is co-
related to other organizational members. It is nothing but the art of managing employees in a
manner which maximizes the ability of achieving business objectives. The employees become
more trustworthy, more committed and more satisfied as they can co-relate themselves very well
with each organizational task. They can understand the reaction of environmental changes on the
organization and the probable response of the organization with the help of strategic
management. Thus the employees can judge the impact of such changes on their own job and can
effectively face the changes. The managers and employees must do appropriate things in
appropriate manner. They need to be both effective as well as efficient.
One of the major role of strategic management is to incorporate various functional areas of the
organization completely, as well as, to ensure these functional areas harmonize and get together
well. Another role of strategic management is to keep a continuous eye on the goals and
objectives of the organization.




3

STRATEGY - DEFINITION AND FEATURES
The word strategy is derived from the Greek word stratgos; stratus (meaning army) and
ago (meaning leading/moving).
Strategy is an action that managers take to attain one or more of the organizations goals.
Strategy can also be defined as A general direction set for the company and its various
components to achieve a desired state in the future. Strategy results from the detailed strategic
planning process.
A strategy is all about integrating organizational activities and utilizing and allocating the scarce
resources within the organizational environment so as to meet the present objectives. While
planning a strategy it is essential to consider that decisions are not taken in a vacuum and that
any act taken by a firm is likely to be met by a reaction from those affected, competitors,
customers, employees or suppliers.
Strategy can also be defined as knowledge of the goals, the uncertainty of events
and the need to take into consideration the likely or actual behavior of others. Strategy is the
blueprint of decisions in an organization that shows its objectives and goals, reduces the key
policies, and plans for achieving these goals, and defines the business the company is to carry on,
the type of economic and human organization it wants to be, and the contribution it plans to
make to its shareholders, customers and society at large.

4

FEATURES OF STRATEGY
1. Strategy is Significant because it is not possible to foresee the future. Without a perfect
foresight, the firms must be ready to deal with the uncertain events which constitute the
business environment.
2. Strategy deals with long term developments rather than routine operations, i.e. it deals
with probability of innovations or new products, new methods of productions, or new
markets to be developed in future.
3. Strategy is created to take into account the probable behavior of customers and
competitors. Strategies dealing with employees will predict the employee behavior.
Strategy is a well defined roadmap of an organization. It defines the overall mission, vision
and direction of an organization. The objective of a strategy is to maximize an organizations
strengths and to minimize the strengths of the competitors.
Strategy, in short, bridges the gap between where we are and where we want to be.






5

COMPONENTS OF A STRATEGY STATEMENT
The strategy statement of a firm sets the firms long-term strategic direction and broad policy
directions. It gives the firm a clear sense of direction and a blueprint for the firms activities for
the upcoming years. The main constituents of a strategic statement are as follows:
1. Strategic Intent
An organizations strategic intent is the purpose that it exists and why it will continue to
exist, providing it maintains a competitive advantage. Strategic intent gives a picture
about what an organization must get into immediately in order to achieve the companys
vision. It motivates the people. It clarifies the vision of the vision of the company.
Strategic intent helps management to emphasize and concentrate on the priorities.
Strategic intent is, nothing but, the influencing of an organizations resource potential
and core competencies to achieve what at first may seem to be unachievable goals in the
competitive environment. A well expressed strategic intent should guide/steer the
development of strategic intent or the setting of goals and objectives that require that all
of organizations competencies be controlled to maximum value.

Strategic intent includes directing organizations attention on the need of winning;
inspiring people by telling them that the targets are valuable; encouraging individual and
team participation as well as contribution; and utilizing intent to direct allocation of
resources. Strategic intent differs from strategic fit in a way that while strategic fit deals
with harmonizing available resources and potentials to the external environment, strategic
intent emphasizes on building new resources and potentials so as to create and exploit
future opportunities.
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2. Mission Statement
Mission statement is the statement of the role by which an organization intends to serve
its stakeholders. It describes why an organization is operating and thus provides a
framework within which strategies are formulated. It describes what the organization
does (i.e., present capabilities), who all it serves (i.e., stakeholders) and what makes an
organization unique (i.e., reason for existence). A mission statement differentiates an
organization from others by explaining its broad scope of activities, its products, and
technologies it uses to achieve its goals and objectives. It talks about an organizations
present (i.e., about where we are). For instance, Microsofts mission is to help people
and businesses throughout the world to realize their full potential. Wal-Marts mission is
To give ordinary folk the chance to buy the same thing as rich people. Mission
statements always exist at top level of an organization, but may also be made for various
organizational levels. Chief executive plays a significant role in formulation of mission
statement. Once the mission statement is formulated, it serves the organization in long
run, but it may become ambiguous with organizational growth and innovations. In
todays dynamic and competitive environment, mission may need to be redefined.
However, care must be taken that the redefined mission statement should have original
fundamentals/components. Mission statement has three main components-a statement of
mission or vision of the company, a statement of the core values that shape the acts and
behaviour of the employees, and a statement of the goals and objectives.
2.Features of a Mission
a. Mission must be feasible and attainable. It should be possible to achieve it.
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b. Mission should be clear enough so that any action can be taken.
c. It should be inspiring for the management, staff and society at large.
d. It should be precise enough, i.e., it should be neither too broad nor too narrow.
e. It should be unique and distinctive to leave an impact in everyones mind.
f. It should be analytical,i.e., it should analyze the key components of the strategy.
g. It should be credible, i.e., all stakeholders should be able to believe it.
3. Vision
A vision statement identifies where the organization wants or intends to be in future or
where it should be to best meet the needs of the stakeholders. It describes dreams and
aspirations for future. For instance, Microsofts vision is to empower people through
great software, any time, any place, or any device. Wal-Marts vision is to become
worldwide leader in retailing. A vision is the potential to view things ahead of
themselves. It answers the question where we want to be. It gives us a reminder about
what we attempt to develop. A vision statement is for the organization and its members,
unlike the mission statement which is for the customers/clients. It contributes in effective
decision making as well as effective business planning. It incorporates a shared
understanding about the nature and aim of the organization and utilizes this
understanding to direct and guide the organization towards a better purpose. It describes
that on achieving the mission, how the organizational future would appear to be.
An effective vision statement must have following features-
a. It must be unambiguous.
b. It must be clear.
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c. It must harmonize with organizations culture and values.
d. The dreams and aspirations must be rational/realistic.
e. Vision statements should be shorter so that they are easier to memorize.
In order to realize the vision, it must be deeply instilled in the organization, being owned
and shared by everyone involved in the organization.
4. Goals and objectives
A goal is a desired future state or objective that an organization tries to achieve. Goals
specify in particular what must be done if an organization is to attain mission or vision.
Goals make mission more prominent and concrete. They co-ordinate and integrate
various functional and departmental areas in an organization. Well made goals have
following features-
a. These are precise and measurable.
b. These look after critical and significant issues.
c. These are realistic and challenging.
d. These must be achieved within a specific time frame.
e. These include both financial as well as non-financial components.
Objectives are defined as goals that organization wants to achieve over a period of time.
These are the foundation of planning. Policies are developed in an organization so as to
achieve these objectives. Formulation of objectives is the task of top level management.
Effective objectives have following features-
f. These are not single for an organization, but multiple.
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g. Objectives should be both short-term as well as long-term.
h. Objectives must respond and react to changes in environment, i.e., they must be
flexible.
i. These must be feasible, realistic and operational.






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10

STRATEGIC MANAGEMENT PROCESS
The strategic management process means defining the organizations strategy. It is also defined
as the process by which managers make a choice of a set of strategies for the organization that
will enable it to achieve better performance. Strategic management is a continuous process that
appraises the business and industries in which the organization is involved; appraises its
competitors; and fixes goals to meet all the present and future competitors and then reassesses
each strategy.
Strategic management process has following four steps:
1. Environmental Scanning- Environmental scanning refers to a process of collecting,
scrutinizing and providing information for strategic purposes. It helps in analyzing
the internal and external factors influencing an organization. After executing the
environmental analysis process, management should evaluate it on a continuous basis
and strive to improve it.
2. Strategy formulation :Strategy formulation is the process of deciding best course of
action for accomplishing organizational objectives and hence achieving
organizational purpose. After conducting environment scanning, managers formulate
corporate, business and functional strategies.
3. Strategy implementation :Strategy implementation implies making the strategy
work as intended or putting the organizations chosen strategy into action. Strategy
implementation includes designing the organizations structure, distributing
resources, developing decision making process, and managing human resources.
4. Strategy evaluation :Strategy evaluation is the final step of strategy management

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process. The key strategy evaluation activities are: appraising internal and external
factors that are the root of present strategies, measuring performance, and taking
remedial / corrective actions. Evaluation makes sure that the organizational strategy
as well as its implementation meets the organizational objectives.
These components are steps that are carried, in chronological order, when creating a new
strategic management plan. Present businesses that have already created a strategic management
plan will revert to these steps as per the situations requirement, so as to make essential changes.

Components of Strategic Management Process
Strategic management is an ongoing process. Therefore, it must be realized that each component
interacts with the other components and that this interaction often happens in chorus.






12

BCG Matrix
Boston Consulting Group (BCG) Matrix is a four celled matrix (a 2 * 2 matrix) developed by
BCG, USA. It is the most renowned corporate portfolio analysis tool. It provides a graphic
representation for an organization to examine different businesses in its portfolio on the basis of
their related market share and industry growth rates. It is a two dimensional analysis on
management of SBUs (Strategic Business Units). In other words, it is a comparative analysis of
business potential and the evaluation of environment.
According to this matrix, business could be classified as high or low according to their industry
growth rate and relative market share.
Relative Market Share = SBU Sales this year leading competitors sales this year.

Market Growth Rate = Industry sales this year - Industry Sales last year.
The analysis requires that both measures be calculated for each SBU. The dimension of business
strength, relative market share, will measure comparative advantage indicated by market
dominance. The key theory underlying this is existence of an experience curve and that market
share is achieved due to overall cost leadership.
BCG matrix has four cells, with the horizontal axis representing relative market share and the
vertical axis denoting market growth rate. The mid-point of relative market share is set at 1.0. if
all the SBUs are in same industry, the average growth rate of the industry is used. While, if all
the SBUs are located in different industries, then the mid-point is set at the growth rate for the
economy.
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Resources are allocated to the business units according to their situation on the grid. The four
cells of this matrix have been called as stars, cash cows, question marks and dogs. Each of these
cells represents a particular type of business.

10 x 1 x 0.1 x
Figure: BCG Matrix
1. Stars- Stars represent business units having large market share in a fast growing industry.
They may generate cash but because of fast growing market, stars require huge
investments to maintain their lead. Net cash flow is usually modest. SBUs located in this
cell are attractive as they are located in a robust industry and these business units are
highly competitive in the industry. If successful, a star will become a cash cow when the
industry matures.
2. Cash Cows- Cash Cows represents business units having a large market share in a
mature, slow growing industry. Cash cows require little investment and generate cash that
can be utilized for investment in other business units. These SBUs are the corporations
key source of cash, and are specifically the core business. They are the base of an
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organization. These businesses usually follow stability strategies. When cash cows loose
their appeal and move towards deterioration, then a retrenchment policy may be pursued.
3. Question Marks- Question marks represent business units having low relative market
share and located in a high growth industry. They require huge amount of cash to
maintain or gain market share. They require attention to determine if the venture can be
viable. Question marks are generally new goods and services which have a good
commercial prospective. There is no specific strategy which can be adopted. If the firm
thinks it has dominant market share, then it can adopt expansion strategy, else
retrenchment strategy can be adopted. Most businesses start as question marks as the
company tries to enter a high growth market in which there is already a market-share. If
ignored, then question marks may become dogs, while if huge investment is made, then
they have potential of becoming stars.
4. Dogs- Dogs represent businesses having weak market shares in low-growth markets.
They neither generate cash nor require huge amount of cash. Due to low market share,
these business units face cost disadvantages. Generally retrenchment strategies are
adopted because these firms can gain market share only at the expense of
competitors/rival firms. These business firms have weak market share because of high
costs, poor quality, ineffective marketing, etc. Unless a dog has some other strategic aim,
it should be liquidated if there is fewer prospects for it to gain market share. Number of
dogs should be avoided and minimized in an organization.
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Limitations of BCG Matrix
The BCG Matrix produces a framework for allocating resources among different business units
and makes it possible to compare many business units at a glance. But BCG Matrix is not free
from limitations, such as-
1. BCG matrix classifies businesses as low and high, but generally businesses can be
medium also. Thus, the true nature of business may not be reflected.
2. Market is not clearly defined in this model.
3. High market share does not always leads to high profits. There are high costs also
involved with high market share.
4. Growth rate and relative market share are not the only indicators of profitability. This
model ignores and overlooks other indicators of profitability.
5. At times, dogs may help other businesses in gaining competitive advantage. They can
earn even more than cash cows sometimes.
6. This four-celled approach is considered as to be too simplistic.






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SWOT ANALYSIS
SWOT is an acronym for Strengths, Weaknesses, Opportunities and Threats. By definition,
Strengths (S) and Weaknesses (W) are considered to be internal factors over which you have
some measure of control. Also, by definition, Opportunities (O) and Threats (T) are considered
to be external factors over which you have essentially no control.
SWOT Analysis is the most renowned tool for audit and analysis of the overall strategic position
of the business and its environment. Its key purpose is to identify the strategies that will create a
firm specific business model that will best align an organizations resources and capabilities to
the requirements of the environment in which the firm operates. In other words, it is the
foundation for evaluating the internal potential and limitations and the probable/likely
opportunities and threats from the external environment. It views all positive and negative factors
inside and outside the firm that affect the success. A consistent study of the environment in
which the firm operates helps in forecasting/predicting the changing trends and also helps in
including them in the decision-making process of the organization.
An overview of the four factors (Strengths, Weaknesses, Opportunities and Threats) is given
below-
1. Strengths - Strengths are the qualities that enable us to accomplish the organizations
mission. These are the basis on which continued success can be made and
continued/sustained. Strengths can be either tangible or intangible. These are what you
are well-versed in or what you have expertise in, the traits and qualities your employees
possess (individually and as a team) and the distinct features that give your organization
its consistency. Strengths are the beneficial aspects of the organization or the capabilities
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of an organization, which includes human competencies, process capabilities, financial
resources, products and services, customer goodwill and brand loyalty. Examples of
organizational strengths are huge financial resources, broad product line, no debt,
committed employees, etc.
2. Weaknesses - Weaknesses are the qualities that prevent us from accomplishing our
mission and achieving our full potential. These weaknesses deteriorate influences on the
organizational success and growth. Weaknesses are the factors which do not meet the
standards we feel they should meet. Weaknesses in an organization may be depreciating
machinery, insufficient research and development facilities, narrow product range, poor
decision-making, etc. Weaknesses are controllable. They must be minimized and
eliminated. For instance - to overcome obsolete machinery, new machinery can be
purchased. Other examples of organizational weaknesses are huge debts, high employee
turnover, complex decision making process, narrow product range, large wastage of raw
materials, etc.
3. Opportunities - Opportunities are presented by the environment within which our
organization operates. These arise when an organization can take benefit of conditions in
its environment to plan and execute strategies that enable it to become more profitable.
Organizations can gain competitive advantage by making use of opportunities.
Organization should be careful and recognize the opportunities and grasp them whenever
they arise. Selecting the targets that will best serve the clients while getting desired
results is a difficult task. Opportunities may arise from market, competition,
industry/government and technology. Increasing demand for telecommunications
accompanied by deregulation is a great opportunity for new firms to enter telecom sector
and compete with existing firms for revenue.
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4. Threats - Threats arise when conditions in external environment jeopardize the reliability
and profitability of the organizations business. They compound the vulnerability when
they relate to the weaknesses. Threats are uncontrollable. When a threat comes, the
stability and survival can be at stake. Examples of threats are - unrest among employees;
ever changing technology; increasing competition leading to excess capacity, price wars
and reducing industry profits; etc.
Advantages of SWOT Analysis
SWOT Analysis is instrumental in strategy formulation and selection. It is a strong tool, but it
involves a great subjective element. It is best when used as a guide, and not as a prescription.
Successful businesses build on their strengths, correct their weakness and protect against internal
weaknesses and external threats. They also keep a watch on their overall business environment
and recognize and exploit new opportunities faster than its competitors.
SWOT Analysis helps in strategic planning in following manner-
a. It is a source of information for strategic planning.
b. Builds organizations strengths.
c. Reverse its weaknesses.
d. Maximize its response to opportunities.
e. Overcome organizations threats.
f. It helps in identifying core competencies of the firm.
g. It helps in setting of objectives for strategic planning.
h. It helps in knowing past, present and future so that by using past and current data, future
plans can be chalked out.
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SWOT Analysis provide information that helps in synchronizing the firms resources and
capabilities with the competitive environment in which the firm operates.
SWOT ANALYSIS FRAMEWORK


Limitations of SWOT Analysis
SWOT Analysis is not free from its limitations. It may cause organizations to view
circumstances as very simple because of which the organizations might overlook certain key
strategic contact which may occur. Moreover, categorizing aspects as strengths, weaknesses,
opportunities and threats might be very subjective as there is great degree of uncertainty in
market. SWOT Analysis does stress upon the significance of these four aspects, but it does not
tell how an organization can identify these aspects for itself.
There are certain limitations of SWOT Analysis which are not in control of management. These
include-
a. Price increase;
b. Inputs/raw materials;
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c. Government legislation;
d. Economic environment;
e. Searching a new market for the product which is not having overseas market due to
import restrictions; etc.
Internal limitations may include-
a. Insufficient research and development facilities;
b. Faulty products due to poor quality control;
c. Poor industrial relations;
d. Lack of skilled and efficient labour; etc









21


PORTERS FIVE FORCES MODEL OF COMPETITION
Michael Porter (Harvard Business School Management Researcher) designed various vital
frameworks for developing an organizations strategy. One of the most renowned among
managers making strategic decisions is the five competitive forces model that determines
industry structure. According to Porter, the nature of competition in any industry is personified in
the following five forces:
i. Threat of new potential entrants
ii. Threat of substitute product/services
iii. Bargaining power of suppliers
iv. Bargaining power of buyers
v. Rivalry among current competitors


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FIGURE: Porters Five Forces model
The five forces mentioned above are very significant from point of view of strategy formulation.
The potential of these forces differs from industry to industry. These forces jointly determine the
profitability of industry because they shape the prices which can be charged, the costs which can
be borne, and the investment required to compete in the industry. Before making strategic
decisions, the managers should use the five forces framework to determine the competitive
structure of industry.
Lets discuss the five factors of Porters model in detail:
1. Risk of entry by potential competitors: Potential competitors refer to the firms which
are not currently competing in the industry but have the potential to do so if given a
choice. Entry of new players increases the industry capacity, begins a competition for
market share and lowers the current costs. The threat of entry by potential competitors is
partially a function of extent of barriers to entry. The various barriers to entry are-
Economies of scale
Brand loyalty
Government Regulation
Customer Switching Costs
Absolute Cost Advantage
Ease in distribution
Strong Capital base
2. Rivalry among current competitors: Rivalry refers to the competitive struggle for
market share between firms in an industry. Extreme rivalry among established firms
23

poses a strong threat to profitability. The strength of rivalry among established firms
within an industry is a function of following factors:
Extent of exit barriers
Amount of fixed cost
Competitive structure of industry
Presence of global customers
Absence of switching costs
Growth Rate of industry
Demand conditions
3. Bargaining Power of Buyers: Buyers refer to the customers who finally consume the
product or the firms who distribute the industrys product to the final consumers.
Bargaining power of buyers refer to the potential of buyers to bargain down the prices
charged by the firms in the industry or to increase the firms cost in the industry by
demanding better quality and service of product. Strong buyers can extract profits out of
an industry by lowering the prices and increasing the costs. They purchase in large
quantities. They have full information about the product and the market. They emphasize
upon quality products. They pose credible threat of backward integration. In this way,
they are regarded as a threat.
4. Bargaining Power of Suppliers: Suppliers refer to the firms that provide inputs to the
industry. Bargaining power of the suppliers refer to the potential of the suppliers to
increase the prices of inputs( labour, raw materials, services, etc) or the costs of industry
in other ways. Strong suppliers can extract profits out of an industry by increasing costs
of firms in the industry. Suppliers products have a few substitutes. Strong suppliers
products are unique. They have high switching cost. Their product is an important input
24

to buyers product. They pose credible threat of forward integration. Buyers are not
significant to strong suppliers. In this way, they are regarded as a threat.
5. Threat of Substitute products: Substitute products refer to the products having ability
of satisfying customers needs effectively. Substitutes pose a ceiling (upper limit) on the
potential returns of an industry by putting a setting a limit on the price that firms can
charge for their product in an industry. Lesser the number of close substitutes a product
has, greater is the opportunity for the firms in industry to raise their product prices and
earn greater profits (other things being equal).
The power of Porters five forces varies from industry to industry. Whatever be the industry,
these five forces influence the profitability as they affect the prices, the costs, and the capital
investment essential for survival and competition in industry. This five forces model also help in
making strategic decisions as it is used by the managers to determine industrys competitive
structure.
Porter ignored, however, a sixth significant factor- complementaries. This term refers to the
reliance that develops between the companies whose products work is in combination with each
other. Strong complementors might have a strong positive effect on the industry. Also, the five
forces model overlooks the role of innovation as well as the significance of individual firm
differences. It presents a stagnant view of competition.



25

NIKON
Nikon technologies contribute to peoples lives and future dreams.

Nikon is contributing to technology in numerous fields, from manufacturing ICs With
nanometer-rule circuit patterns and advancing bioscience, to furthering the Possibilities of
imaging and capturing views of stars that are billions of light years Away. What makes this
possible? Our opto-electronics and precision technologies that we have nurtured throughout our
history and used to create an extensive range of products, services and even more new
technologies. Nikon will continue to enrich lives around the world, support cutting-edge
industries that are shaping the future, and confront the challenges facing societies around the
world.

Precision Equipment Business
Modern society reaps great benefits from the electronics fabricated in industrial sectors,
including areas such as home appliances, personal computers and automobiles. Nikon is
continuously advancing the production of steppers and scanners that are used to manufacture ICs
the very core of electronics as well as liquid crystal panels and organic
electroluminescence panels that are indispensable to LCD TVs, computers, and smartphones. In
these and many other ways, Nikon is fostering and innovating our electronics-based society.\




26

HISTORY
1917
Three of Japans leading optical manufacturers merge to form a comprehensive, fully
integrated optical company known as Nippon Kogaku K.K.
1918
Ohi Dai-ichi Plant (now Ohi Plant) is Completed.
1925
JOICO microscope is marketed.
1932
NIKKOR is adopted as the brand name for camera lenses.
1946
Pointal ophthalmic lens is marketed.
Nikon brand name is adopted for small-sized cameras.
1952
nikkor club is established to promote photography culture.
1959
Nikon F, Nikons first SLR camera, is Marketed.
1967
Ohi Plants Ofuna site (now Yokohama Plant) is built.
1968
Photo gallery Ginza Nikon Salon is opened.
Nikon Europe N.V. (now Nikon Europe B.V.) is established in the Netherlands.

.
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1985
Total Station DTM-1 surveying instrument is marketed.
1992
Nikon Instech Co., Ltd. is established.
1999
D1 digital SLR camera is marketed.
In-house company system is Inaugurated.
2000
Nikon-Essilor Co., Ltd., joint venture with Essilor International of France, is established.
2003
Nikon-Trimble Co., Ltd., a joint venture with Trimble Navigation Ltd. of the U.S., is
established.
2004
Yokohama Plants Yokosuka Branch (now Yokosuka Plant) is built.
Nikon F6 SLR camera is marketed.

2009
FX-101S LCD scanner is marketed.
Metris NV became Nikon Metrology NV, a wholly owned subsidiary of Nikon Corporation.
2010
Nikon Head Office is relocated to Shin-Yurakucho Bldg.
D3S and D3X digital SLR cameras, and NIKKOR lenses are used in the International Space
Station (ISS).

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2011
Nikon 1 J1 and V1 advanced cameras with interchangeable lenses are marketed.
2012
NSR-S621D ArF immersion scanner is marketed.
Nikon Plaza Sendai is opened.
D4 digital SLR camera is marketed.


















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NIKONS PHILOSOPHY
Nikon has maintained an unwavering commitment to the study of light with the corporate
philosophy, Trustworthiness and Creativity. But today, as we become ever more global, what
is the true value that we have to offer? To answer this all-important question, in 2007, we
enacted Our Aspirations Meeting needs. Exceeding expectations. as the new vision to
create a new Nikon.

Our Philosophy
Trustworthiness and Creativity
Our corporate philosophy of Trustworthiness & Creativity simple words that are not easily
put into practice. These important words represent unchanging principles to which we will
always be dedicated.


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Our Aspiration
Meeting needs. Exceeding expectations
Our Aspirations mean not only to meet the needs of customers but also to provide customers
with new value that exceeds their expectations.
Meeting needs. Exceeding expectations. is our vision for the future.
Providing customers with new value that exceeds their expectations.
Sustaining growth through a break with the past and a passionate commitment by one and
all.
Maximizing our understanding of light to lead the way towards transformation and a new
future.
Maintaining integrity in order to contribute to social prosperity.
Our Commitments
We are therefore implementing a policy for realizing our aspirations that consists of making four
key commitments.

Be broad-minded and well-informed in order to act quickly and resolutely.

Pioneer new potential through self-study and insatiable curiosity.

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Harmonize diverse skills by thinking out of the box and communicating effectively with others.

Work with diligence and sincerity as a responsible individual.














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PESTLE ANALYSIS
Referring to CIPD (2010), PESTLE analysis is an assessment of the companys 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.
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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
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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.














35

CORE COMPETENCIES OF NIKON
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 companys distinctive capability. Nikon, being leader in manufacturing of lenses,
has four product segments:
i. Imaging products
ii. Precision equipment
iii. Instruments
iv. Others
The figure below shows the missions of Nikon:

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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. Nikons 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, Nikons 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:

i. Market Standing
ii. Innovation
iii. Productivity
iv. Resources
v. Profitability
vi. Management performance
vii. Employee performance and development
viii. 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
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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.
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.












38

COMPETITIVE ANALYSIS
Direct competitors for Nikon in the imaging products are Sony, Canon, Panasonic, Samsung,
Olympus and Kodak.
The table below shows the strengths, weaknesses,
Sony
Strength
Strong brand awareness and image
Good after sales service
Variety of products
Economy of sales in terms of promotional campaigns

Canon
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
39

SWOT ANALYSIS
For Nikon, the SWOT analysis is tabulated below:
SWOT Analysis
Strength Opportunities

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
Weaknesses Threats

High stock levels of products
Lack of scale
Usually high price of cameras

Increasing cameraphones on the market
Reducing semiconductor capital market
spending





40

STRENGTHS
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 companys 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. Nikons percentage of expenditure in R&D rose from 5.1% to
6.1% in 2008. Therefore it can be deduced that the companys 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
41

strong liquidity status, allowing financial growth plans like market expansion to occur. This
good financial position also creates confidence in its potential investors.
WEAKNESSES
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
Nikons 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.
OPPORTUNITIES
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.
42

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.
THREATS
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.

43

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








45


Year 1 Year 2 Year 3 Year 4 Year 5

Potential Customers Growth

CAGR
Families of College
Graduates
1% 19,083 19,350 19,621 19,896 20,175 1.40%
Families of High
School Graduates
1% 46,398 47,048 47,707 48,375 49,052 1.40%
Families of Non-
High-School
Graduates
1% 9,355 9,486 9,619 9,754 9,891 1.40%
Total 1.40% 74,836 75,884 76,947 78,025 79,118 1.40%

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
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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:
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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 dont 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.
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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.





















49

GLOBAL INTERNATIONAL MARKETING AND E-BUSINESS STRATEGIES
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.
E-Product
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
E-Price will normally bring the price of the new camera more competitive as Nikon will no
longer incur costs for stores and staff.
E-Place
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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
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.





51

CSR Policy
Beginning with its corporate philosophy of "Trustworthiness and Creativity," the Nikon Group
has structured policies to fulfill this philosophy, shares them with all employees, and works to
put them into practice.


The Nikon Group's Approach to CSR
For the Nikon Group, fulfilling CSR means embodying its corporate philosophy:
"Trustworthiness and Creativity." We are aiming to contribute to sustainable development by
living up to the trust we are given by society, and also by creating more value than expected.
As a common plan of action for the entire Group we have adopted "Our Aspirations," which
were formulated through a project discussion in which both top management and employees
participated, and "Our Commitments," which are made to realize those aspirations. We are also
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working to increase CSR awareness among each and every employee through the Nikon CSR
Charter, which is Nikon Group's basic policy on social responsibility, and the Nikon Code of
Conduct, which is our code for daily business activities. Furthermore, we participate in the UN
Global Compact, and support its Ten Principles regarding Human rights, Labour, Environment,
and Anti-corruption.
Nikon Corporate Social Responsibility (CSR) Charter
1. Sound corporate activities
The Nikon Group endeavors to comply with international regulations, related laws, and
internal rules, exercise sound and fair corporate practices, earn the trust of stakeholders
such as customers, shareholders, employees, business partners, and society. The Group
will maintain constructive relationships with administrative bodies, remaining politically
neutral and complying with laws, and will not engage in relationships with individuals or
groups that threaten social order or safety.
2. Provision of valuable goods and services for society
The Nikon Group will provide valuable products and services with superior quality and
safety to society, endeavoring to increase the satisfaction and trust of our customers and
contributing to the healthy development of society.
3. Respect for human beings
The Nikon Group will respect diversity and individual human rights and provide a
healthy and safe working environment in which all persons receive fair treatment without
53

discrimination. It will also oppose enforced labor and child labor and respect fundamental
human rights as well as workers' rights.
4. Protection of the natural environment
The Nikon Group will proactively engage in environmental efforts and work to protect
the natural environment, as these are common issues for all of mankind.
5. Responsibility to society as a corporate citizen
The Nikon Group will carry out corporate activities that take into account the cultures
and practices of each country and region and proactively engage in activities that
contribute to society as a good corporate citizen.
6. Socially responsible behavior within supply chain
The Nikon Group will encourage socially responsible behavior within its supply chain.
7. Transparent operating activities
The Nikon Group will communicate extensively with customers, shareholders,
employees, business partners, and society and disclose business information in a timely
and fair manner. It will also conduct reliable financial reporting through accurate
accounting processes.
8. Responsibility of top management
Top management and employees in managerial positions within each department must
understand that they play an essential role in fulfilling the spirit of this Charter and thus,
54

in addition to leading by example, they must ensure that this information is disseminated
to everyone in the Group and all related parties. Management must always strive to
understand the opinions of those both inside and outside of Nikon to develop a sound
internal framework that ensures that the spirit of this Charter is upheld. If any incident
occurs that violates this Charter, top management will demonstrate, internally and
externally, their determination to solve the problem and strive to identify the cause and
prevent its recurrence. Furthermore, they will uphold information disclosure and
accountability obligations. They will clarify the authority and responsibility of each
manager and employee and deal rigorously and objectively with all people involved in
the matter, including top management.










55

Conclusion