canon kyosei

Kyosei;Our Corporate Philosophy

Corporate Sustainability Report 2011

Table of ContentsRealizing Kyosei � � � � � � � � � � � � � � � � � � �1

Basic Strategy � � � � � � � � � � � � � � � � � � � � 3

DiversifiA � � � � � � � � � � � � � � � � � � � � � � � � 7

Globalization � � � � � � � � � � � � � � � � � � � � � 11

Achieving Excellence � � � � � � � � � � � � � �13

Key Strategies � � � � � � � � � � � � � � � � � � � �15

In Pursuit of Sustainability � � � � � � � � �17

Five Materiality Themes � � � � � � � � � � 18

> Corporate Sustainability Report 2011

Realizing Kyosei

Kē•ō•sāThe 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.

“All people, regardless of race, religion or culture, harmoniously living and working together into the future�”

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Our AdoptionCanon adopted Kyosei in 1988, the 51st year since the company was founded. This very idea clarifies Canon’s standpoint on partnerships formed with stakeholders around the world. Kyosei envisions the high achievement of a completely sustainable society in which all individuals, regardless of race, religion or culture, all live harmoniously and work together into the future.

What this means…Canon strives to resolve imbalances in the world. Truly global companies must foster good relations, not only with our vital 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, Canon’s 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.


Basic Strategy

Our PlanSince its inception as a camera manufacturer, Canon has leveraged its core imaging technologies to expand into such other business areas as information products, business machines and semiconductor equipment. Canon is doing its utmost to realize technological innovations that will result in products that meet the needs and expectations of customers and of society.

Canon has developed its business with a global perspective since its foundation, establishing sales, production and R&D sites worldwide, starting with a branch office in New York in 1955. In line with our corporate philosophy of Kyosei —we respect the laws, customs and cultures of each country and region in which we operate. With a workforce of approximately 160,000 employees supporting the Canon brand in the more than 180 countries and regions where it is an officially registered trademark.

Pursuing “cross-media imaging” as a central strategy in 2009, Canon fortified its lineup in every product sector in addition to launching the imageRUNNER ADVANCE series of office network MFDs to support the future of global business growth.

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Europe

7%Industry and Misc� Business Unit

41%

Office Business Unit

51%

Consumer Business Unit

11%

Europe

22%

Japan

43%

Other

19%

Other

43%Americas

28%

Americas

7%

Japan

31%

Net Sales by Product

Net Sales by Region

Employees by Region


0 1000 2000 3000 4000 5000

¥ 3,754.22006

¥ 4,156.82007

¥ 4,481.32008

¥ 4,094.22009

¥ 3,209.22010

Net Sales(¥ billion)

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0 100 200 300 400 500

Net Income(¥ billion)

¥ 384.12006

¥ 455.32007

¥ 488.32008

¥ 309.12009

¥ 131.62010


Diversification

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Consumer Unit:

> Digital Single Lens Reflex Cameras > Compact Digital Cameras > Digital Camcorders

> Compact Photo Printers > Lenses For SLR Cameras > Multifunction Inkjet Printers

> Broadcast Equipment > Image Scanners > Inkjet Printers


Corporate Unit:

> Office Network Multifunction Devices > Digital Production Systems > Laser Printers > Laser Multifunction Devices

> Lcd Projectors > Visual Communication Products > Facsimile Machines

> Toner, Photosensitive Drums > Solutions Software > Internet Services > Large-Format Inkjet Printers

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Industry Unit:

> LCD Lithography Systems > Semiconductor Lithography Systems > Digital Radiography Systems

> Ophthalmic Equipment > Components and Other Parts


Globalization

Asia and OceaniaJapan plays a central role in cultivating new businesses, while working through Canon Marketing

Japan Inc. to strengthen all relations with customers. We are developing our production plan,

development cycle , and sales activities in other Asian countries and regions through Canon Co.,

Ltd. In Oceania, we are engaged in technology development in addition to marketing activities.

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Europe, Africa and the Middle EastWith Canon Europe Ltd. at the center of our operations in Europe, we are aggressively developing

markets in Russia, the Middle East and Africa. We also carry out special localized production and

unique R&D activities.

AmericasUnder the overall control of Canon U.S.A., Inc., we subdivide service- and support- related

infrastructure by sales area to ensure flexible responses to market changes and to boost customer

satisfaction. The company has also established localized R&D bases, production sites, and is

currently developing new businesses.


Achieving Excellence

Our PlanIn 1996, Canon launched the Excellent Global Corporation Plan, its medium- to long-term management plan, aiming to continue using technology to contribute to society and to be a corporation that is accepted and worthy of respect throughout the world. The plan also aims to position the Company among the world’s top 100 companies in terms of all major management indicators.

Refocusing our GoalsIn light of the worldwide recession, we decided to initiate a strategic change in course, from a focus on sound growth, referring to continuous expansion while maintaining a sound financial structure, to improved management quality, which will then enable us to maintain a healthy corporate structure capable of generating profit even in the face of shrinking markets.

Furthermore, we promoted IT innovations to achieve overall optimization and to help raise management efficiency through the complete integration of information, with deliberate focus on building a completely new production information system and a next-generation logistics system, and stepped up efforts toward the realization of real-time management.

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Phase 11996–2000Focused on building a strong financial base through innovation in such areas as production and technological development.

Phase 22001–2005Focused on digitization of products with the aim of becoming No. 1 in all core businesses.

Phase 32006–2011Promotes sound growth to fortify and expand business along with improved management quality to achieve real-time management.


Key Strategies

Achieve the Overwhelming No. 1 Position in Existing BusinessesWith creating technology through innovation as Canon’s motivating force, the Company plans to help differentiate itself by developing common platform technologies, which can be incorporated into the key devices that support strong products and shared by every single business unit.

Expand Business Operations through DiversificationWhile pursuing diversification through such new businesses as large-format inkjet printers and Print on Demand (POD), we are striving to establish display technology and autonomous Group company operations.

Establish New Production Systems to Sustain AdvantageWhile pursuing diversification through such new businesses as large-format inkjet printers and Print on Demand (POD), we are striving to establish display technology and autonomous Group company operations.

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Identify New Business Domains and Accumulate Needed Technologies and Products In addition to pursuing R&D in new business domains such as medical imaging, intelligent manufacturing robotics, and security & safety, Canon remains focused on basic research from a long-term perspective.

Nurture Truly Autonomous and Strong Individuals to Ensure Sustainable Corporate InnovationCanon’s corporate DNA involves respect for human dignity, an emphasis on technology and the encouragement of an enterprising spirit. We endeavor to pass this identity on as we cultivate new generations of global leaders.

Activities in Pursuit of Sustainability


Establish a Truly Global Corporation

Accept the Responsibility of Being a Pioneer

Ensure the Happiness of our Family

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Five Materiality ThemesCanon, in line with its commitment to realizing sustainability, each year selects a variety of materiality themes based on the concerns and expectations of stakeholders as well as its key business strategies and policies.

Stakeholder surveys are always conducted to aid in the selection process. The 2011 survey verified the appropriateness of the five themes chosen for 2010. Results revealed that more than 90% of surveyors agreed with Canon’s selection.

Accordingly, the reportage covers the very same themes this calendar year. The five materiality themes are presented in the order of interest to all of our stakeholders.

From this year’s survey we were able ascertain which activities, covered under such categories as customers, shareholders and investors, suppliers, employees, and the local and global community were of greatest interest from the perspective of each group of stakeholders.

Continue on to learn about our Five Materiality Themes by navigating your browser to: Canon�Cockerill�me

canon kyosei

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