RICOH Canada Inc Industry: Digital Imaging and Document Management Andreea Marinescu November 17,2016

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1.0 Introduction

This report will analyze the digital imaging and document management industry. The company that will be analyzed is Ricoh Canada Inc., with parent company Ricoh Canada Ltd., in Japan. RCI operates at a B2B level. Due to the increase in demand in the service market, RCI wants to switch to the managed services and professional services industry. The issue that was found in regards to the company’s strategy is in their poor distribution of funds. RCI’s resource allocation is poor, which could drastically impact their plan to overtake the service market. The scope of the report is to determine what strategies could be implemented to allow for a better distribution of funds and to avoid a financial crisis and extinction. 2.0 Analysis

RCI’s current strategy is to expand into the service market and cause a “dent” to their competitors as they are facing saturation in their current market segment. However, this cannot be done with a poor strategy in its allocation of financial resources. The issue identified is that RCI is not allocating its resources properly, which is causing them to lose money and putting them at a disadvantage in their goal to conquer the service industry. If RCI does not hedge its costs it can put them in an unfavorable position in the market.

Some factors that contributed to their poor allocation of funds can be outlined in RCI’s income statement as well as its balance sheet. In 2012, RCI’s operating profit was only 5.6% of its revenue (8.0). As the operating profit decreased from 2010, the expenses increased (8.0). Although a minor increase in expenses in large companies is expected over time, this can cause possible trouble in RCI’s new strategy to overcome the service industry.

In the financial analysis, (8.9) we can see that the company’s net income as % of revenue is decreasing which also notes high expenses. In (8.10) we note that RCI’s gross margin is also decreasing, which suggests a loss in the company’s competitive advantage and a decrease in its profits.

According to the Pestel analysis (1.0), an important economic factor to consider in a business is exchange rates. Another factor that showcases their poor allocation of funds is found within their exchange rate cost hedging. RCI is losing money when they are bringing their products from Japan because they are using a direct channel of distribution. Their products undergo exchange rates from the transfer from Japan to the Untied States as well as United States to Canada. This shows a lack of financial planning in their financial team. If the exchange rates can be controlled, cost allocation can be closely monitored. This weakness is also outlined in the SWOT analysis (10.0).

One of the issues that RCI experienced when purchasing IKON was the lack of workforce integration (10.0). The lack of workforce integration showcases their poor spending strategy. If RCI focused on allowing the new workforce to integrate to RCI business practices, this issue would have been hedged and they would have had a stepping-stone into the service market, as IKON is strong in that department.

A poor cost allocation can be seen when looking at the company’s strong focus on NPS scores as well as the sole focus of their staff on current business partners. RCI’s

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sales team’s main focus is repeat business, 80%. Where as new customers only receive 20% of their focus (10.5.6). The company’s reasoning for this is their strong NPS scores, which made them determine that they should focus on repeat customers (10.1). This is another example of poor cost allocation because they should invest in other retaining strategies and have a higher focus on new customers. 3.0 Alternatives 3.1 Alternative 1: RCI does not operate on a B2C line but only on a B2B line. Most of RCI’s competitors, including Canon, Xerox and HP, all operate on a B2C line (10.5.5). All of its competitors also have a strong niche in the service market. If RCI wants to succeed in the service market they must offer the same incentives as their competitors do as well as have a competitive advantage. Pros:

I. Offering greater exposure to the company II. As they are currently competitive in the B2B line, entering a B2C line would

strengthen their strategy to dent the service market. III. Revenue increase. If their sole focus is other businesses the potential of revenue

from consumers will be lost; their main strong competitors have both the benefits of B2B and B2C.

Cons: I. May have to spend more on training

II. Adapt to the needs of consumers, which may be different than businesses III. Competition is high in the B2C sector

3.2. Alternative 2:

One of the issues that RCI experienced when purchasing IKON was the lack of workforce integration (10.0). Thus, one alternative is to extensively train its sales team. One recommendation that the Director of Quality and Strategic planning had is to invest more money in training. RCI estimated a $6,095 cost of training per individual (10.5.7). However, if the training is not effective, the money will be wasted. Training for the sales force is very important, as they will know how to deal with the requests of customers in the service field. Pros:

I. An easier time to fit in with the company’s new strategy II. Strategy can be better implemented. Without proper training, the strategy to create

a dent in the service market cannot be well implemented. Cons:

I. The cons for this alternative are that the costs of training would be extensive. Given RCI’s sale force of 380 people, it would cost them minimum of $2,216,100.

3.3 Alternative 3: Another alternative that will allow for the prevention of RCI’s poor cost allocation is

to ensure that the exchange rates costs are kept under control. The exchange rate is an

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important economic factor for any businesses that are outsourcing their products (1.2). Thus, by importing their products straight to Canada, RCI would be able to prevent the exchange rates cost of importing from Japan to US and US to Canada. Pros:

I. Prevent revenue loss from exchange rates fluctuations II. Minimize costs III. Have greater management on costs IV. Be able to plan better V. Allow for greater spending power on other strategies such as entering the

service market Cons:

I. Costly II. Would need financial support from its parent company in US and Japan. III. RCI would still have to be responsible for exchange rates from Japan to

Canada 4.0 Recommendation

The issue identified was RCI’s poor cost allocation. If RCI does not change its strategy to address the service market they could potentially face extinction. Thus, their costs must be properly allocated in allowing them to transition to a service market.

One of the recommendations given was spending more money on things necessary to implement its strategy. Because RCI places a strong focus on its sales team in retaining new customers, they must also invest a lot of capital in their training. Their sales force has no knowledge in service sales as they mainly focus on hardware sales. Extensive training in the service sales domain would allow their sales team to properly attract customers interested in services. The training should also be focused on dealing with consumers as well as businesses. Allowing RCI to enter a B2C line of business will help their strategy implement.

The outlined strategy would fit with the industry’s external variables, as it will ensure that RCI has a clear prevention of economic factors such as exchange rates. This would also fit in with their financial resources because it would minimize the amount of cash lost by exchange rates and maximize the allocation of funds for the new strategy.

The strategy would achieve a competitive advantage for RCI in the following ways: I. Expand their market share when incorporating a B2C line as they adhere to

consumers as well as businesses II. Focus on sales team training to ensure a smooth transition to the service sector

and B2C sector III. Hedge costs associated with exchange rates, which allow for greater spending on

implementing their strategy of denting the service market. This strategy would improve the weaknesses or deficiencies found within RCI in the

following ways: I. Prevent high turnover rates as sales team and management team will be trained

and able to keep up with RCI’s changing strategy II. Focus on training will also allow for a smooth transition into the service market

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Ricoh Canada Inc. Appendix

The scope of this appendix is to analyze the industry in which Ricoh operates in as well as its current strategic plan and company issues.

External Analysis 1.0 PESTEL 1.1 Political Factors 1.1.1

1.1.2 1.1.3 1.1.4

Tax Policy Trade control Import restrictions Competition regulation

1.2 Economic Factors 1.2.1 1.2.2 1.2.3 1.2.4

Exchange Rates Labor costs Stage of business cycle Monetary policy

1.3 Social Factors 1.3.1 1.3.2 1.3.3 1.3.4

Attitudes toward green products Attitude toward product quality and customer service Average disposable income Attitudes toward imported goods or services

1.4 Technological Factors 1.4.1 1.4.2

Rapid technological change Research and development

1.5 Environmental Factors

1.5.1 1.5.2

Attitudes toward green products Recycling- going paperless

1.6 Legal Factors 1.6.1 1.6.2 1.6.3

Environment Pollution IP Law Data protection law

1.7 Impact

1.7.1 1.7.2 1.7.3 1.7.4 1.7.5 1.7.6 1.7.7 1.7.8

Tax policy is important for digital companies outsourcing their products Trade control is regulator for companies that outsource Import restrictions may put a barrier on what can come into the country and how much of it Exchange rates may raise company costs Cost of labor in Canada or US may be more expensive than other countries Changing attitudes due to climate change, result in businesses needing to be more environmentally friendly Customers place a high value on good customer service and product quality Businesses must keep up with rapid technological changes in the digital world as well as data management world

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2.0 Industry Economic Traits

2.1 Market Size and Growth Rate 2.1.1 How big is the industry?

I. Digital Imaging service industry • Large • US$ 24 billion in Canada

II. Hardware break/fix market • Smaller • US$ 4.5-5 billion in Canada

1.7.9 1.7.10 1.7.11 1.7.12 1.7.13 1.7.14

Investing in research and development may help companies achieve innovation faster Consumers may choose green products over non green products Offering recycling programs may appeal to consumers Environmental pollution from recycling can be a major impact area for digital imaging companies. IP law may determine who has the right to a certain idea or concept first Digital imaging companies have to offer exceptional security to customers.

1.8 Opportunities or Threats

1.8.1 1.8.2

I. Opportunities • Businesses focusing on keeping their

products environmentally friendly • Coming up with an idea first –IP law • Outsourcing – keep the labor costs low

II. Threats • Import rates – may be high if outsourcing • Rapid technological advances – may

create products obsolete quickly • Research and development – needs large

amounts of capital and capable manpower Strategic Impact

• Companies must invest in R&D to keep up with innovation otherwise they may become obsolete

• Awareness towards environmentally friendly products may change consumer’s buying decisions

• Outsourcing may come with benefits but also high costs of import and import restrictions

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2.1.2 How fast is it growing?

I. Digital Imaging service industry • Rapidly

II. Hardware break/fix market • Slowly

2.2 Industry position in growth cycle 2.2.1 Multifunction Product Market Share (2009-2012)

• 40% of major companies experienced decline of 1% to 2% • 10% of the major companies experienced stagnation • 40% of major companies experienced growth of 1% to 2% • In the maturing stage • Growth is very minimal, stagnation is present • Stagnation means there needs to be future innovation • Consumers need to be given what they want

2.2.2 Printer Market Share (2009-2012) • 50% of major companies experienced a decline of 5% to 8% • 50% of major companies experienced growth of 1% to 35% • Balance between decline and growth • Few companies experience exponential growth

2.2.3 Other Growth Determinants

• Technical services industry only 2% projected growth • Managed services limited growth • IT/Professional services projected increase of over 40%

2.3 Strategic Implications

• RCI must advance in the IT/professional services department as it is projected the most growth

• Easy to enter in the service department for online based companies which can increase competition

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3.0 Porter’s 5 Forces

3.5 Conclusions 3.5.1 3.5.2 3.5.3

Industry can be very profitable as long as companies are keeping up with the needs and wants of consumers Industry has low entry and exit barriers which is why companies don’t last long in the market if they cannot keep up with innovation and customer needs and wants Online based companies are becoming more and more prominent which is a threat for established corporations

4.0 Driving Forces & Strategic Impact 4.1 Driving forces: • Innovation/ Differentiation • Attitude changes: Environment friendly

3.1 Thereat of new entrants (MEDIUM) 3.1.1 Innovation 3.1.2 Low market entrance costs for online based companies 3.1.3 Market growth expected to be around 40%

3.2 Bargaining power of suppliers (MEDIUM) 3.2.1 Legal issues 3.2.2 Numerous suppliers to switch to 3.2.3 Demand for benefit packages and job perks 3.2.4 Challenge in obtaining knowledgeable and creative workers in technology sector

3.3 Bargaining power of buyers (HIGH) 3.3.1 Low switching cost -- costs of switching from one provider to another are very low in the digitall business world 3.3.2 Easily accessible information -- consumers have information regarding companies readily available online including reviews 3.3.3 Price sensitivity-- the lower the prices the more a consumer will choose the business with the lower price

3.4 Threat of substitutes (HIGH) 3.4.1 New products or services --digital world is fast growing and companies have to keep up with emerging technological advances 3.4.1 Emergence of hybrid companies -- hybrid companies that offer the same products or services with added benefits or lower costs 3.4.3 Low switching costs -- low switching costs can allow donsumers to easily switch from one company to another 3.4.4 High bargaining power

3.5 Industry Rivalry (HIGH) 3.5.1 Product differentiation- if the products that the major competitors are offering are the same, the more likely it is for them to switch from one firm to another. 3.5.2 Low barriers for entry and exit in the market - this allows for increased competition as access to consumers is readily available

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• Price point

• Increase of demand in the service market • Processes becoming more electronically automated i.e. Cloud Based

Storage 4.2 Impact

• Industry is highly competitive

• If a product shows more innovation than another consumers may favor it • Low entry and exit costs which means who is successful today may not be

tomorrow • Cost of changing strategy is high

4.3 Strategies • Must keep up with the changing needs and wants of consumers

• Must always come up with constant innovation to surpass your competitors • Ensure you keep low price points as consumers have price sensitivities • Examine competitor strategies (i.e. Konica Minolta low prices) • Offer something your competition doesn’t– find a niche • Hedge costs of changing strategies (i.e. lower costs in areas that do not

provide much revenue or that are not necessary)

4.4 Implications • Companies must have capital to keep up with innovation • If one part of the supply chain is not functioning properly it will affect the

whole chain • If companies do not allocate revenues properly it can impact their cash

flow in the company and put them in a bankruptcy position

• Cost of changing strategies would be effective if company can keep up with expenses and hedge costs

• Major strategy change is very risky especially in a market where major competitors are already established and they offer things such as low price points

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5.0 Strategic Group Map

5.1 Conclusions 5.1.1 5.1.2 5.1.3 5.1.4 5.1.5 5.1.6

Best spot is having a high market coverage and highly efficient pricing Companies with high market coverage and decent pricing are destined to prosper Companies with low market coverage and high pricing are destined to struggle Left section of the map is better than right because it allocates for higher market shares Konica Minolta is in the worst position as its market coverage is low and their costs are high Canon is in the best situation as it adheres to all consumers by having a high market share and good pricing

6.0 Key Success Factors 6.1 Cloud computing 6.2 Continued Innovation 6.3 Knowledgeable/ Efficient workers 6.4 Quality Products/ Reliability 6.5 Competitive Pricing/ Cost Efficiency 6.7 Strategic Implications - Effective and efficient workers will allow increase in retaining new customers - Cost of maintaining these success factors may be high - Shortcomings that would place the company at a significant competitive advantage is knowledgeable and efficient staff as well as continued innovation.

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7.0 Industry Life Cycle

• Maturing phase. • Stagnation • Companies are trying to keep up with the needs and wants of consumers • Consumers needs and wants change rapidly • Companies must keep up in order to stay in the industry and not be forced

out 8.0 Company Outlook Based on Assessment of the Industry Competitive Advantage

• Customer satisfaction • Technical Services

Prospects for success

• Ricoh must maintain a high level of innovation to keep up with customer changing needs and wants

• Ricoh must focus on the service industry, which is worth US$24 billion where as the hardware/break and fix market is worth only US$4.5-5 billion. Thus, the potential in the revenue market is much greater.

• They are currently facing a stagnation in the market due to the changing needs of consumers; they need to reposition themselves to another market segment where they would be profitable

• Industry life cycle is in the maturing phase which means they need to innovate • Possible rebranding to operate B2C not just B2B; this would allow a higher

possibility for revenues • Many companies will come in and out of the market due to the volatility of the

market, thus Ricoh needs to have a solid strategy in order to not be pushed out • High market coverage and most efficient pricing would put Ricoh in the pest

position in the market • Consumers are price sensitive, thus the prices must be kept average to low • Keeping a good customer service base would distinguish Ricoh from the rest of

competitors because customers usually do their research before choosing a product.

• Ricoh may have an advantage as their costs for IT/professional services are low and consumers are price sensitive

• Ricoh is maintaining a strong market share in the break/fix market with a 25% market share based on b2b multifunction printer markets

• Growing in their cloud services niche could allow them access to government contracts

• Healthcare industry is also increasing its focus on paperless storage / cloud based storage and sharing

• Evolving customer base means that company needs to prepare for costs of innovation

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The Internal Analysis of Ricoh 8.0 Financial Analysis RICOH

8.1 BalanceSheet

2012 2011 2010 Trend

CurrentAssets 293,075 188,647 172,305 Increasing

CurrentLiabilities 85,276 85,892 57,802 Decreasing

Inventory 41,417 42,562 38,056 Decreasing

FixedAssets 16,042 11,620 6,063 Increasing

LongTermDebt 24,223 21,428 17,960 Increasing

ShareholdersEquity 183,576 167,625 140,496 Increasing

RetainedEarnings 87,958 67,108 56,248 Increasing

8.2 IncomeStatement

SalesorRevenues 497,016 477,313 461,497 Increasing

OperatingExpenses 131,420 129,250 126,665 Increasing

EBITDA 30,786 31,617 30,304 Decreasing

G&A 23,283 24,330 23,843 Decreasing

NetIncome 28,047 29,136 27,873 Decreasing

8.3 CashFlowStatement

CashfromOperations 151,006 134,779 130,959 Increasing

8.4 KeyMetrics

NetWorkingCapital 120,220 102,755 114,503 Increasing

8.5 KeyRatios

8.5.1 Profitability

GrossProfitMargin 0.709 0.715 0.706 Decreasing

OperatingProfitMargin 0.145 0.151 0.152 Decreasing

NetprofitMargin(OnSales)

0.827 0.824 0.847 Increasing

ReturnonInvestedCapital 0.135 0.154 0.176 Decreasing

ReturnonAssets 0.09569 0.11612 0.1211 Decreasing

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ReturnonEquity 0.1527

0.17381

0.1983

Decreasing

8.5.2 Efficiency

AssetTurnover 1.695 1.738 2.005

Decreasing

ReturnonCapitalEmployed

1.991 2.076 2.383 Decreasing

8.5.3 Leverage

DebttoAssets 0.3736 0.3894 0.3894 Decreasing

Longtermdebttocapitalratio

0.374 0.389 0.389 Decreasing

Debttoequityratio 0.596 0.637 0.638 Decreasing

Longtermdebttoequityratio

0.132 0.128 0.128 Increasing

8.5.4 Liquidity

CurrentRatio 2.40 2.20 2.40 Increasing

QuickRatio 1.292 1.8 1.97 Decreasing

8.5.5 OtherFinancialRatios

Inventoryasa%ofCurrentAssets

20.15% 22.56% 22.08% Decreasing

GrossMarginsasa%ofRevenue

32% 33% 33.5% Decreasing

NetIncomeasa%ofRevenue

5.64% 6.1% 6.04% Decreasing

DebttoEquity% 59.6% 63.7% 63.8% Decreasing

InvestedCapital 207,799 189,053 158,456 Increasing

8.6 Conclusions 8.6.1 Profitability

• ROE is decreasing which means firm is not maintaining a competitive advantage • A decreasing ROA depicts that the firm is not using the assets in their whole to

generate earnings • Profit margin is decreasing which means that management is not effective

8.6.2 Efficiency • Asset turnover has decreased more than 30% which means that the management s

not using the firm’s assets efficiently 8.6.3 Liquidity

• The firm can generate cash quickly

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• The quick ratio is decreasing rapidly which means that the company is having troubles meeting its liabilities

8.7

8.7.1 Conclusions

• An increase of revenue over time is observed 8.8

8.8.1 Conclusions

• Net income has decreased over time

440,000

460,000

480,000

500,000

Revenue

Time

RevenueOverTime

20122011

27000

28000

29000

30000

NetIncome

Time

NetIncomeOverTime

2012

2011

2010

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8.9

8.9.1 Conclusions

• The percentages decrease drastically from 2011 to 2012 which means that the company has higher expenses as it is making less income from its revenues

8.10

8.10.1 Conclusions

• The gross margin as a percent of revenue is decreasing over time which means that the company is retaining less of their gross profit for every dollar of revenue

• This can also signify that the company is becoming less competitive

18.50%19.00%19.50%20.00%20.50%21.00%21.50%22.00%22.50%23.00%

2010 2011 2012

Percentage

Years

NetIncomeas%ofRevenue

18.00%

19.00%

20.00%

21.00%

22.00%

23.00%

2010 2011 2012

Percentage

Years

GrossMarginas%ofRevenue

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8.11

8.11.1 Conclusions

• Inventory as a % of current assets is decreasing over time • This may mean that there is an increased demand for these products as inventories

are decreasing • Possible high chance for profitability due to decreasing inventories

8.12

8.12.1 Conclusions

• Their largest revenues come from technical services (193 MIL) which is roughly 39% of their total revenue

• Technical services have limited growth potential (just around 2%) 8.13 Other considerations

• Cloud services account for approximately $20 Billion on a global market; Ricoh has 0% market share

• IT/Professional services account for $900 Billion on a global market; Ricoh has 0% market share

18.00%

19.00%

20.00%

21.00%

22.00%

23.00%

2010 2011 2012

Percentage

Years

Inventoryasa%ofCurrentAssets

0510152025

MarketShare

MarketShare

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9.0 Present Strategy 9.1 RCI acquired IKON Office Solutions, which strengthened their North American

direct sales network and gave it control of the dealer network, which Canon, a large competitor or Ricoh, relied on heavily.

9.2 Push towards changes in technological advancements, user behavior and cooperate behavior

9.3 . Switching from delivery and maintenance of printing/copying devices to consumers to document management systems and IT services

9.4 RCI pushes to build on experience and relationships with customers. 80% of RCI’s sales come from repeat customers; hence a focus on long-term customers.

9.5

RCI focused primarily on geographic and key named accounts. These were smaller accounts. Over half of their new business was obtained through cold calling. With a success rate of 1 in 10 or 10%.

9.6 RCI was aggressively targeting healthcare accounts due to their leverage with government relations with these clients.

9.7 RCI’s sales force would need additional training if it wanted to expand its service offerings. The recruitment process needs to hire candidates that have more content/specific knowledge in services, as well as be motivated in selling services.

9.8 Need to hedge currencies in order to provide stability. Their revenue was greatly impacted by the Japanese and American exchange rates coming back to Canada.

9.9 RCI needs people with high leadership skills. 9.10 NPS scores are heavily relied upon; it had high scores, thus keep the strategy of

high customer satisfaction a priority. 9.11 Main focus was planning by using the SMART goals. (Specific, Measurable,

Attainable, Relevant, Time-bound) 9.12 Current strategy is not working as competitors are doing better than RCI 9.13 Limited knowledge in the service industry, thus they need a lot of capital to invest

in new staff and training 9.14 Possible merger & acquisition with a company that is service oriented 9.15

Possible rebranding into B2C sector

9.16 Present strategy is not working because company is losing profit and increasing their expenses (see Financial Analysis)

9.17 Company’s current strategy is to create a dent into the service market 9.18 Their vision is to operate in both service and hardware markets and surpass their

competitors

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10.0 SWOT

10.5 Strategic Implications 10.5.1 Focus on customer experience can weaken their strategy because they are not

focusing on weaknesses 10.5.2 Obtaining most of their customers through cold calling can be a weakness

because company is not getting enough exposure 10.5.3 The high turnover rates create a leadership crisis; they are in need of creative

thinking 10.5.4 After acquiring IKON, RCI experienced lower workforce integration than

expected (Ensign and Fast, 1)

10.5.5 Ricoh’s major competitors have a B2C line of operation 10.5.6 Spending 80% of time on repeat business and 20% of time on new

customers 10.5.7 RCI’s strategy executive suggests that a $6,095 cost of training per person may

be too low and that extensive training will ensure that leadership team is strong

10.1 Strengths

- Customer Satisfaction - Technical services

- Multifunction Product -Strong NPS score

-Acquisition of IKON

10.2 Weaknesses -No knowledge of service

industry - Innovation

- High turnover rates - 110% - Strong focus on positive

customer experience - Workforce integration

- exchange rates -Speding more time on repeat

business

10.3 Opportunity - Cloud services

-IT/Professional services -Hireamorededicatedandknowledgeableworkforce

-SwitchtoB2C-Investintraining

10.4 Threat - Customers changing what they

want rapidly - Existing competitors

- Exchange rate fluctuations - Cold calling

- High Turnover rates -Low focus on training - Poor funds allocation

- Competitors operate on a B2C line

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11.0 Competitive Strength Assessment KSF/Strength Measure Weight Ricoh Canon HP Xerox Printer Market Share 0.15 5 1 10 5 Multifunction Product Market Share

0.15 5 1 5 10

Customer Satisfaction 0.2 10 1 1 3 Print and Content Services

0.25 1 10 6 7

IT Hardware 0.25 10 6 10 6 1.0 Overall Strength Rating 6.25 4.5 6.45 6.1 Rating Scale: 1= very weak; 5= average; 10=very strong 11.1 Conclusions 11.1.1 Competitive niche in customer satisfaction: High NPS scores 11.1.2 Lacking a competitive advantage in services 12.0 Issue Identification How to prevent a poor allocation of costs? The main issue RCI needs to focus on is figuring out how to hedge costs In order to survive when they switch to a service based strategy, RCI needs to hedge its costs. There is a strong opportunity of growth in the service market as it is predicted to grow around 40%. In order to allow for this cost allocation, RCI should focus on lowering costs where possible and investing where needed. Some areas where RCI shows poor allocation of costs is the costs incurred in the exchange rates. In addition, their high turnover rate shows that the company needs to spend more on training and ensuring that their staff fit in within the organization and it’s visions. The main message is that RCI has a great difficulty in the transition from delivery and maintaining printing / copying device to manage and professional service area. If this issue would be solved, RCI’s prospect on conquering the service market would be improved. Relevant Reference: 1.0 The PESTEL analysis shows that economic factors such as exchange rates are an important determinant in company success 8.0 The financial analysis shows that the company expenses are increasing which denotes poor cost allocation as its operating profit is decreasing 8.9 Graph shows that as expenses increase their net income decreases 8.10 Gross margin is decreasing which shows that their competitive advantage is decreasing 10.0 In the SWOT analysis we can see that RCI has a high turnover rate, 110% and this causes a crisis within its management.

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Bibliography

Ensign, Prescott C. and Jonathan Fast. Ricoh Canada Inc.,. 2016. Print Grant, Robert M., Judith Jordan, and Philip R. Walsh. Strategic Management. 1st ed. New Jersey: Wiley, 2016. Print.