Canon’s Response to Ricoh’s Acquisition of IKON

Jim Hamilton
Nov 6, 2008
Canon advertisement in Boston Globe, 11-06-2008

Canon advertisement in Boston Globe, 11-06-2008

Canon placed a full-page advertisement in today’s Boston Globe (and presumably many other newspapers) with the message; “Your Business Solutions Started with Canon…So It Makes Sense to Stay with Canon Business Solutions, Inc.” Though neither IKON nor Ricoh are mentioned, the clear message of the advertisement is that those who value Canon products, service, and financing should stick with Canon, and specifically with the Canon Business Solutions division of Canon USA. This advertisement is a visible sign of what transpired last week with the IKON shareholder vote approving the transaction and Ricoh’s announcement of the completion of the acquisition.

Last week at an analyst briefing during Graph Expo, Canon made it clear that while it valued its authorized partners such as IKON, its policy was clear in cases where a competitor acquired such a partner. This policy, which Canon invoked when Global Imaging Systems was acquired by Xerox and Danka Office Imaging was acquired by Konica Minolta, can be briefly summarized as follows: Canon will cancel all contracts with authorized business partners that are acquired by a Canon competitor.

Today with the placement of this advertisement we see how Canon is reacting. Canon Business Solutions must carry a greater load and so we can expect to see more emphasis there. Canon has demonstrated that it is looking at acquisitions as well, most recently with San Francisco-based NEWCAL Industries. Competition will also be fierce for IKON’s strongest sales representatives, who Canon knows well and will certainly want to lure over to the Canon fold. Dual-line dealers who carry Ricoh and Canon products will be another key target. Canon will certainly make effort to insure that Canon products are promoted as the primary offering.

IKON represented a very significant chunk of Canon’s business. The loss of IKON as a partner, while significant, is something that Canon can’t change but it can fight for control of its installed base. This advertisement provides insight on one aspect of how Canon intends to respond to Ricoh’s acquisition of IKON. More will certainly follow as this battle for installed base plays out over the coming weeks and months.

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