I wrote several months ago about the craziness our industry has seen in the last 18 months... Xerox buying Global Imaging (parent company of Boise Office Equipment), Konica Minolta buying Danka, and now the last (and largest) national distribution channel is being acquired: IKON.
Ricoh recently announced its intention to purchase IKON. This is a massive development and was largely a surprise (not the acquisition, but the acquirer). Rumors of Canon, HP, Samsung, and even Xerox were thrown around, and Ricoh was not a leading contender in most people’s view. IKON was a very large distributor for Canon nationwide and represented almost a third of Canon’s U.S. sales.
So some big questions emerge: What is Canon going to do? How will Canon treat the dealer agreement with IKON? How will Canon address the loss of a major channel? What will this mean to independent Canon dealers?
Canon’s apparent response will be to terminate the dealer agreement with IKON upon the closing of the acquisition (targeted for November). This would mean that IKON would no longer be a Canon dealer and would not be able to sell Canon equipment or accessories. Ongoing parts and supplies support, however, would likely continue for some period of time. The amount of technical support from Canon to IKON remains to be seen, but if history is a good indicator, most of the support IKON gets from Canon such as technical resources, proactive software updates, technical notes, and favorable parts and supplies pricing would be cut off.
Canon is therefore taking the long-term strategy of not worrying about the near-term revenue loss and rather building a distribution of mostly independent dealers. Independently owned dealers have proven to be the best service providers in their markets with the fastest organic market growth. They are run by entrepreneurs who must succeed everyday in growing their businesses or they will parish. It’s entrepreneurs who are willing to work every day from 6am to 8pm to be the best in their markets, and Canon knows that.
Canon believes in the independent dealers and is banking on them to recover from the loss of IKON. Canon strives to be the best supporter of the independent dealer and therefore attract the best entrepreneurs in the country to sell Canon’s products. That said, Canon also realizes that they need to have direct operations (Canon owned dealerships) in some markets. So we will likely see the growth of Canon Business Solutions in some of the larger markets.
The emerging answers to questions posed above point to some very good developments for Fisher’s. We will likely be the only full line provider of Canon copiers in the Treasure Valley after the acquisition and will have an opportunity to gain those IKON customers who are loyal to Canon. We will also have a Canon support team that will provide aggressive programs to keep the independent Canon dealers competitive and engaged in winning new business every day.