1

A Report on the Ricoh Canada Inc. Case Study

 2

Table of Contents
Introduction and Strategic issues:........................................................................................................................................3
2. External Analysis...............................................................................................................................................................3
3. Company Situation:..........................................................................................................................................................5
4. Recommendation.............................................................................................................................................................8
5. Appendix........................................................................................................................................................................... 9
Conclusion:......................................................................................................................................................................... 13
References..........................................................................................................................................................................13
 3

Introduction and Strategic issues:

Ricoh a Japanese multinational digital imaging and document management company was established in

1936 but it is operated in Canada since 1924 its head office is in Toronto Ontario with 2100 employees

in Canada only. Ricoh Canada was incorporated to compete with well-known names like Canon, Xerox,

and Hewlett-Packard. The past strategy was based on the acquisition of IKON by Ricoh Company

Ltd(RCI) to diversify the business activities in 2008. Ricoh is operating across 200 countries and

regions worldwide and Ricoh Canada Inc. operates on the model of B2B.

Strategic Issues: Presently. RCI is facing stagnation in the market because of global changes in

consumer behavior, like the transformation of paper printing to digital printing, major threats to

competitors such as Canon and Xerox, and economic factors like shrinking in the profit margin of

RCI. The CEO and president of the company Glenn Laverty seeking an opportunity in a document

management system under the domain of technological factors to come out of the status quo. Innovative

technology includes cloud computing, AI, and other options available for the security of consumers’

services.

A problem statement is the saturation of the RCI market and declining profitability. RCI Canada is

shifting its strategy from old imaging, Printing technology to new technology, consumer

profiles, and corporate behavior RCI is on the verge of handling its transformation stage from

printing and document scanning to the service sector. The company has three major services

technical services, managed services, and professional services.

 4

Strategic accounts. Strategic accounts of RCI are the backbone of the company major revenue comes

from it but the growth factor is limited. The total revenue of RCI from professional service and managed

service was 52 million dollars in 2015. The SMART strategy is the solution for further growth in the

service sector.

2. External Analysis: External analysis is the benchmark for the industry’s competitive index.

Strategists have to analyze the major threats from the digital imaging and document management industries.

The competition in the digital imaging and printing company is very high because of morphing consumer

behavior along with digital disruption in this field.

Porter’s Five Force analysis: Porter's Five Forces is a methodology that identifies and examines five

competitive forces that affect every business and aids in identifying an industry's flaws and strengths. The

structure of an industry is typically identified using the Five Forces analysis to develop company strategy

(Team, Investopedia, 2022).

Porter’s Five Force Model:

This model has five components and RCI’s core area in the generic strategy is the state-of-the-art technologies
in its document management and similar products. This model is used for the current strategy for the company
as well as the future too.

The threat of new entrants: Ricoh has a threat of new entrants but the company is focussing on a diversification
strategy with huge investments in the R&D sector in Canada.

Bargaining power of buyers: Ricoh is witnessing moderate bargaining power from the customers. Ricoh easily
downed the price in comparison to others but buyers may switch over to other printer companies.

Bargaining power of suppliers: The bargaining power of suppliers is high in the case of Ricoh As we know
Ricoh is too inclined toward vertical integration and forward integration. It will impact on average profit of
Ricoh. The company must focus on the manufacturing process and already Ricoh started.

The threat of the substitute product: The threat of the substitute in Ricoh is moderate to high.
 5

In the office equipment industry, Ricoh is facing challenges and must make strategy costing differentiation.

The intensity of rivalry among competitors: Ricoh has rivals such as Canon, Xerox, and HP. They are also
working on the same model and focus on the acquisition process too. Ricoh is

Also working on a technology-related strategy to compete in the market and has a huge customer base.

Key Success Factors: Ricoh is an old company and has a strong experience in the marketing field, especially in

Canada. Among its Key Success Factors are Ricoh Canada's excellent employees and loyal consumers. To

maintain its current client relationships, the company employs 2100 employees, and it has a substantial

customer base that includes banks and other governmental agencies. Major Customers and named accounts

made up the majority of its clients. These clients were acquired through sales calling. and individual

dealerships. Managed services, professional services, and technical services are the three divisions into which

Ricoh Canada divides its services. Technical Services is the largest in terms of size.

It is based on legacy business and very much advanced in servicing machines in this field with a good ERP

system. Managed service has three areas like imaging printing and fulfillment The key strength of Ricoh

Canada is its loyal customers, stakeholders, and brilliant sales team. RCI must retain its customer base by

adopting a different strategy in the IT field.

Industry attractiveness: RCI is continuous spending on the development of new technology as we know

customers are tech savvy

3. Company Situation: Company is going through a tough time and it needs to change some strategies.
The company has to fulfill the gap between the current and desired goals of the organization. RCI is the current

strategy to expand the service market in Canada. RCI is facing challenges from competitors in the technological

matter and also RCI needs huge money for the investment in cloud technology, AI, and other factors related to

the service sector. RCI working on the B2B market although its competitors are working on the B2C and have a

strong hold on the service market. It has some merits and demerits.
 6

Merits:

Those company working on the B2C model has more exposure in the field of marketing and service sector.

They have a competitive advantage over other companies.

Revenue enhancement.

Demerits:

Spending too much on training might be troublesome for the company and other departments will get less

money for the development.

The B2C business model is highly competitive and requires a stronghold in this sector including products and

services.

The second strategy of RCI should be on the acquisition process to check the condition of the service industry

Adaption of RCI with IKON. RCI has no engineering personnel to work in innovation because the maximum

engineering workforce works in the Japan and USA. RCI must outsource some engineers from the USA.

Also, RCI would have focused on a cost-cutting strategy in the legacy business and sales of current service

technology. Finally. Ricoh is an established brand in printing technology and document management so these

hurdles are the only bottleneck to progress.

RCI information technology industry is well equipped and highly efficient in the competitive edge and also

Able to tackle the compliance and risk mitigation strategy. RCI is the best company in the terms of printing

solutions.

Industry life cycle

- Maturation Phase

- Market Saturation phase

 7

- RCI needs to see the demand of the customers.

- Consumer behavior is changing rapidly because of new technology

- Industries should be on the same platform to fulfill the demand

Financial Analysis: Financial Analysis of the company is based on past FY data from 2013 to 2015

l. Liquidity Ratio: It is the indicator of the company’s financial stability in which I will see the current ratio and

quick ratio of the company,

Current Ratio: It is the ratio of the current asset divided by current liabilities. An ideal ratio is 2:1 in this case

The current ratio is in good condition.

Quick ratio: Quick ratio is the benchmark for the short-term liabilities in the cash form. It is decreasing here.

It means the company is not in a good position.

SWOT Analysis:

SWOT analysis is divided into two parts external and internal factors, internal factors include strengths and

weaknesses, and external include threats and opportunities. SWOT analysis indicates the position of the

company. Ricoh Canada Inc. leaders can do a situational study of the company using the SWOT analysis tool,

which is a strategic management tool (Fern Team, n.d.).

Strength:

RCI can establish itself in the market as we know it is an established brand and its geographic location is very
good from the customer perspective and it will add a competitive advantage.

It is also known for its sustainability policy, good leadership in the market, and amazing relationship with
consumers. RCI has strong R&D facilities and the company invested immensely.
 8

Ricoh Canada Inc. spends significantly more on R&D, enabling the company to introduce more innovative and
healthy products.
RCI has a pool of talented workforce such sales people and dedicated top management.

Weakness:

 RCI should strictly follow the policy and guidelines of environmental waste management.
 Secondly, the RCI has inefficient funds and it affects the liquidity position of the company

RCI must focus on inventory management service which may cause overstocking or understocking.

RCI is facing many issues with its merger and acquisition policies in Canada.

RCI must follow the promotional strategy in marketing document management and cloud-based service.

Opportunity:

 The best opportunity RCI can exploit is the morphing nature of customers according to their needs
and demand.
 Canadian market is very promising and RCI should go for the new service for the population,
improvement in the lifestyle of people brings new opportunities for the company.
 High-income groups are increasing day by day and people are working with the help of new
technologies and which is a huge opportunity for the RCI.

Threat:

 Major threat to RCI is from its competitors such as HP, Xerox, Minolta, etc. directly and indirectly
affecting the business performance.
 Inflation is also affecting the RCI by increasing the cost of production and decreasing business
profitability.
 The impact of globalization also affects the company because of cultural diversity and national
boundaries
Are uniting in the time of globalization.
 9

4. Recommendation: Ricoh Canada Inc is an established company and it has to change its existing
practice to Sustain itself in the market. How to invest money? How prepare the budget and correcting

deviations in costing are the major issues to address the problem of the company. RCI has to spend more money

on infrastructure, R&D, and good kinds of software to better share information across the company whether

document management, process management, etc. RCI needs to invest money in the training of the employees

along with knowledge management with new technology. It is not an easy task to excel in the global market and

for this has to prepare a concrete strategy to dominate the field of printing and document management.

RCI needs to switch over to B2C business because it is very competitive and all their competitors such as HP.

Xerox and Canon are using it. Competition is the key driving force for the growth of the company and also

focuses on information symmetry of the customers although top management is thinking about the positive

feedback of the company based on NPS.

RCI should focus on cost issues seriously like hedge cost which is directly related to the exchange rate,

providing more flexibility in the company investment and promoting strategy.

The next point is the market share of the company, if RCI expands its business, and diversifies it, automatically

market share will increase and consumer loyalty will enhance. RCI must recruit experienced employees of the

service sector at the operational level. RIC should make a place in market coverage and pricing to get the place

in the strategic group map.

Finally, RIC should adopt the SMART strategy(specific, measurable, attainable, relevant, and time-bound) to

excel in the field of the existing market. The CEO of the company decided to arrange a meeting in Japan to

implement the SMART goals in RIC.

 10

5. Appendix
In this part of the RIC report, I will analyze the industry in the long term scope.

External Analysis:

PESTLE Analysis

Political Factors Political stability in the country

Intellectual property Right

Trade rules and regulation

Economic Factors Govt regulations

Inflation and interest rate

Condition of unemployment

Social Factors The literacy level of a country

Demography of the particular countries.

The inclination of the people toward imported goods

Technological factors Technological advancement in R&D

Digital transformation

Environmental factors Eco-friendly approach

Recycling and waste management

weather

Legal factors Data security

IP law

Corporate Governance

Impact: Tax policies, interest rates, cost of labor, and trade

policies are important factors for the company.

 11

Figure 1: Porter’s Five force model for Ricoh( ( Lucid Content Team, 2022)

Strength Weaknesses:

Richo is a widely known brand of digital imaging Contradiction over merger and acquisition policy

and documentation company in comparison to its The problem of inventories in RIC.

competitors. Growth is needed in the long term for the expansion

Ricoh Canada Inc. spends significantly more on Environmental issues need to be addressed.
R&D, enabling the company to introduce more
innovative and healthy products.

RIC is efficiently working on a merger and

acquisition strategy.

RIC has a committed sales force.

Geographical advantage.

Opportunities: Threat
 12

RCI must invest in cloud computing technology. Competitors

Retention of customer loyalty by introducing new Economic stability and rate of inflation.

technologies. Inadequate fund

Cater to the need of the customer according to their Supply chain crisis

buying behavior.

Table 1: SWOT analysis of Ricoh Canada Inc

Figure 2: Nine-cell industry attractiveness of Ricoh

 13

Figure 3: Strategic group map Ricoh

Conclusion: The case study of Richo in this strategic map is not very positive because many companies like

canon xerox, HP, and others are occupying the best position and their pricing strategy is very appropriate.

Some companies like Konica and Minolta are not good in the market coverage.

SL.NO RICOH        
1 BALANCE SHEET 2013 2014 2015 Trend
           
  Current Asset 172305 188647 201649 Increasing
  Current Liabilities 17960 21428 20668 decreasing
  Inventories 38056 42562 34070 decreasing
  Fixed Asset        
  Long term debt        
  Shareholder earning        
  Retained earning 56248 67108 80666 Incresing
           
  Income Statement 46149      
  Sales or revenue        
  Operating expense        
  EBITDA        
  G&A 23843 24330 23283 decreasing
  NET INCOME        
           
  Cash flow statement        
           
  cash from operation        
           
  key metrics        
  net working capital        
           
 14

  key ratios        
  profitability        
  gross profit margin        
  operating profit margin        
  Net profit margin        
  Return on invested capital        
  Return on Asset        
  Return on equity        
           
  Efficiency        
  Asset turnover        
           
  Return on capital employes        
  Leverages        
  Debt to asset        
  Long term debt to capital        
  debt to equity ratio        
long term debt to equity
  ratio        
           
  Leverages        
  Current ratio 9.6 8.8 9.75 Decresing
  Quick Ratio 7.47 6.8 8.1 Increasing

References
Lucid Content Team. (2022). Lucid. Retrieved October 17, 2022, from www.lucidchart.com:
https://www.lucidchart.com/blog/what-is-strategy

Fern Team. (n.d.). Fernfortuniversity. Retrieved October 17, 2022, from www.fernfortuniversity.com:
http://fernfortuniversity.com/term-papers/swot/nyse/8320-ricoh-co-ltd.php

Team, Investopedia. (2022, August 1). Investopedia. Retrieved October 17, 2022, from www.investopedia.com:
https://www.investopedia.com/terms/p/porter.asp
15