The acquisition of IKON by Ricoh, if approved by the regulatory authorities and shareholders will be the single largest and most important strategic investment by a manufacturer in the business equipment market. IKON represented the last true independent distributor and likely they very last international independent distributor in this mature market. Manufacturers must now rely on direct distribution to service national & international accounts as well as maintain effective control on the marketing of these products. For years, Canon, Ricoh, Konica-Minolta did make significant investments within the direct sales and service channel, however, this was more of a defensive strategy based upon the volatility and financial strength of the distributors such as IKON, Danka and Global Imaging and was really "Plan-B" should these distributors fail. (3 Years ago - IKON traded at $2 - I think a deal could have been made!). I am writing this Blog to really ask one question: What is Plan "B" now Canon? Is there a planned hostile takeover strategy? Is CBS now a fully viable and self-suffcient sales & service division? What does the loss of over 50% of sales of equipment and related supplies, not including the mind-share of the Canon brand that was promoted by over 25K people every day, mean for the shareholders, empolyees, manufacturing economy of scales, 3rd party support? If there is no plan to counter the Ricoh takeover (don't be fooled to think this is a merger - it's all about MIF and changing the Canon red to Ricoh red), what is the go forward? How can Canon recover from the loss of over $1 Billion in annual sales? Trust me, CBS is not the answer my friends. In the market I represent, CBS has a single strategy - Attack IKON Canon base with offers of lower pricing.(Not too much genuis in this strategy - and requires the hire of untelligent and unethical sales reps to implement) Guess what chumps, if the base is converted over to Ricoh in 3 to 4 years, where does that leave CBS? How much business has Canon won relying soley on the CBS channel for distribution & service? What has happened to Canon in recent years? The leadership in marketplace technology dominance has almost evaporated. No, the imagePress 7000 is not the answer. There are major gaping holes in the product line (Think about how long it took Canon to replace the CLC line, letting Xerox, Ricoh & Konica-Minolta (CPP) grow and dominate office & production color) Please dont tell me you are relying on the same marketing, just out of college, nimrods to advise you on this strategy? These are the same people who thought the iR-5800 / 5870 / 6800 / 6870 was the lead product and most advanced technology to lead with in an account! Canon must take immediate actions for a hostile taleover of IKON from Ricoh to re-establish it's commitment to the market, industry and least of all, protect years of established successful collaboration with IKON in marketing the iR machine. An investment of $2 Billion to save an annual revenue stream of $1 Billion seems logical to most, however, why does this not seem logical to Canon at this point? Please tell me you have a Plan B?
There is no Plan B. I used to work for CBS in mid-town from 2002 until recently, and I actually like it a lot. I heard from someone that I met recently that works at their headquarters in Long Island that the struggle of acquiring IKON always comes up. But they always pass because they're so cocky. I also heard that the department at Canon that looks at acquisitions is horrible - everybody hates the VP in their M&A department and he knows nothing about acquisitions. Glad I'm not working at this company anymore!
I have been in the business for 23 years with a independent and I can't figure out why Canon let this happen twice with Danka and Ikon. It's all about market share and Ricoh is going to claim the spot maybe this year and probably for sure next year.
Canon needs to step off the arrogance and get back to how they were in the 80's and 90's. Price is killing us in the marketplace and you can only sell features and the Canon name for so long. They need to help out the independents with lower prices so we can make some moves on the Ikon and Danka customers. In my town CBS is a joke and they can't keep employees.
Noticed friday heavy vol and price of ikon greater then takeover bid by 25 cents.Does canon have 69 mill to make it worth ikons trouble for hostile bid Very interesting Great post re plan B any more info on canon stepping upm to the plate