Canon has established a new subsidiary, Canon Healthcare USA, Inc., which aims to strengthen its presence in the American medical market, and bolster growth of its medical business.
The Canon group is currently working toward a strategic transformation of its business portfolio in order to realize future growth. With the announcement of Phase VI, the latest in the company’s “Excellent Global Corporation Plan” series of five-year management programs, Canon’s primary objective is to “thoroughly strengthen business competitiveness.”
Under this slogan, Canon is striving to increase its competitiveness in various spheres of the medical industry, including diagnostics such as CT, MRI, diagnostic ultrasound systems, as well as medical component businesses such as x-ray tubes, x-ray detectors and key MRI components. In addition, the company is making strides in the field of healthcare IT and in vitro diagnostics.
American Medical Market
One of the most pressing challenges for Canon’s medical business has been the need to strengthen its presence in the American medical industry, which is extremely influential on the global market. Canon has decided to consider the greater Cleveland area, a key hub in the country’s medical industry as a candidate location for establishing Canon Healthcare USA, INC., to strengthen the company’s competitive presence in the global market.
With the establishment of Canon Healthcare USA, Canon will transfer a portion of its marketing operations, incubated at the Global Headquarters over Canon’s long history. These operations will transfer to the Global Marketing Center, to be established in January of 2023, in order to strengthen upstream marketing (1). By establishing a network with medical institutions on the front lines of treatment and achieving a greater understanding of the market, Canon says it will develop and propose products and solutions that address the trends and needs of the medical market.
Among such efforts is the commencement of joint research with American medical institutions on the practical application of X-ray CT systems utilizing photon counting detection modules, with the goal of capturing the No. 1 share of the global CT market at an early stage.
In addition, Canon Medical Systems USA (CMSU), the U.S. subsidiary of Canon Medical Systems Corporation (Canon Medical), will transfer a portion of its product sales and service operations to Canon Healthcare USA. This will integrate operations with downstream marketing (2), thereby enabling the company to focus on increasing its share of medical diagnostic systems in the American market.
The Cleveland area, one of the candidate locations, is home to the headquarters and factory of Quality Electrodynamics, LLC (QED), which develops and manufactures MRI key components and was welcomed into the Canon Group in 2019. By placing QED under the umbrella of Canon Healthcare USA, Canon will aim to increase coordination between its system and component businesses.
Furthermore, Canon Medical will take over the advanced technology research activities that Canon has been conducting with Massachusetts General Hospital and Brigham Women’s Hospital at the Healthcare Optics Research Laboratory (HORL) in Boston for 10 years and will promote joint research aimed at commercialization in collaboration with the Global Marketing Center. In addition, Canon is considering the possibility of expanding U.S. based development, manufacturing, and other capabilities, with the goal of further strengthening its business in the country.
The establishment of this new company and expansion of business operations is expected to require $300 million of investment capital. This investment will empower Canon’s medical business to grow by deepening its understanding of customer and market needs, as well as redouble its efforts in the American market.
- Upstream marketing is a type of marketing strategy that focuses on identifying a specific group of customers, identifying their particular needs, and determining which products and services address these needs
- Downstream marketing is a type of marketing strategy that focuses on growing sales by directly communicating with customers and business partners at the end points of sales networks