A Management Comparison of Kodak and Fujifilm
Name: Aileen Pena-Valentin
BUS302
Date: 07/21/2014

A Management Comparison of Kodak and Fujifilm
The purpose of this paper is to examine compare and contrast the history, management and leadership skills of both companies, Kodak & Fujifilm.
Description of the History and Core Businesses
Both Kodak and Fujifilm will be examined to identify the similarities and differences in their business successes and failures. Each business will be analyzed to develop a more complete understanding of how the businesses were formed and the paths each as followed to arrive at their current market positions.
Kodak
Kodak began as Eastman Kodak in 1880 founded by George Eastman. He was known for his pioneering technology and innovative marketing. When George was 24 years of age he wanted to take a vacation and one of his coworkers asked him to record his trip. He bought a photographic outfit with all its paraphernalia and wet plates. The outfit was so big and cumbersome that he thought he could simplify the process. He read British magazines that explained how they were making their own gelatin emulsions to coat the plates so that they would not be wet plates. He perfected the process and began making his own gelatin emulsions and coated plates. By 1880 he invented a dry plate formula and patented a machine for preparing a large number of plates and that is how Eastman Kodak began. His company began to grow but faced collapse when the dry plates began to go bad in the hands of dealers. He recalled the plates and replaced them to make good on the plates and saving his reputation. He realized that what he was doing was making photography an everyday affair and strived make the camera as convenient as the use of the pencil. By 1885 he developed a film that was lighter than dry glass plates and that could be used both for outdoor and studio work. Eastman understood that he had to reach not only those who worked with dry glass plates, but also reach the general public. Eastman also knew the importance of advertising his product. He wrote his own ads and had them printed in leading papers and periodicals. He coined the phrase “you press the button, we do the rest” in 1888 with the introduction of the Kodak camera. As his business grew and he hired employees he thought of taking care of the people that worked for him and thought that employees should have more than good wages. He began planning on offering dividends on wages for employees. In 1899 his first act was to distribute a substantial amount of money from his own pocket to each person who worked for him. In 1919 he gave one-third of his company holdings, then worth $10 million, to his employees. Eastman is well known for his photography and philanthropy and in 1923 Kodak introduced Kodacolor motion picture films at affordable prices. In 1963 Kodak introduced the instamatic camera that revolutionized amateur photography. In 1970 Kodak was involved in several antitrust lawsuits, one against Polaroid which sold instant photography that developed pictures outside of the camera. Polaroid won it lawsuit and Kodak had to pay $925 million to Polaroid. Kodak however has stayed behind in the digital industry and has fallen from a great company to one in bankruptcy.
Fujifilm
Fujifilm was founded in 1934 and was called Fuji Shashin Film K.K, later known as Fuji Photo Film Co. Ltd. and wanted to be the first photographic producer in Japan. Fuji film was producing optical glass film and its largest client was the military in Japan. Fuji Photo Film Co. was established based on a government plan to establish a domestic photographic film manufacturing industry. Fuji Photo Film was trying to create a brand for itself but had difficulty with recognition in the marketplace, the causes were both internal and external. They could work on the internal problems but the external issues were difficult so they began to improve the quality of its product. In 1936 they hired a German Specialist to help with their emulsion technology. Their emulsion technology helped them introduce its first film product and motion picture negative film that propelled them into the motion picture industry as technologically proficient. Fuji Photo Film then opened another factory to work on color prints but because of WWII it halted operations and had to put off consumer film development. In 1947 Fuji was allowed to export its cameras and binoculars to outlets in South America and Asia. In the area of film, Japan lagged behind Europe and the US. Fuji Photo Film had very little share of the global market because of their lag in the film industry. They were able begin to develop color film by the 1950’s but were still behind the consumer market. Comparing and Contrasting Leadership and Management Styles
The management of each business has made key decisions to enable their respective businesses to remain competitive in a constantly evolving business world. To obtain greater insight into how each business has reacted to the environmental changes, the leaders of each business will be briefly examined to obtain greater insight into how these leaders have been able to deal with technological innovation that provides opportunities for their original business lines.
Kodak
Kodak’s leadership and management style has not been able to sustain a competitive advantage since they developed the digital camera in 1975. There one flaw was not staying with the technology that digital required. The digital shift has had a big impact on Kodak film and has had to reduce its company size; digital photography replaced film and smartphones replaced the camera. Kodak leadership did nothing to stay with the digital technology and continued to move its film market. The problem Kodak encountered was that they did not move into the digital world fast enough or well enough. Research shows that there were people in the organization that saw the problems early on but did nothing to act on them when they had the opportunities. In 1993, Kodak hired George Fisher as CEO who was a technology expert to help get the company back on track with the digital era. However, people within the hierarchy of the company who had good ideas where not heard or listened to, they were lead to poor strategic decision making and this was due to the organizations complacency. Kodak had been around so long and was at the forefront of its core business in their home market so long, that they thought to be untouchable. Kodak’s problem was not the introduction of new technology but rather that another company was raining in on their business in their market.

Fujifilm "The most decisive factor [for our success] was how drastically we were able to transform our businesses when digitalization occurred," CEO Shigetaka Komori. Fujifilm adapted to the demise of photographic film by adding other businesses on top of digital imaging. The leadership and management at Fujifilm stayed on top of technology. Fujifilm leaders stayed focus on the film industry they knew and had developed. They took the film with all its 20 ultrathin layers that contain about 100 kinds of chemical compounds and they forced their way into the digital world in cameras and smartphones and moved past Kodak by using their expertise in developing LCD panels for computers, television sets and other electronic devices. Fujifilm leaders continue to meet with strategic personnel within their company to make the best decisions for the company. Fujifilm has also developed pharmaceuticals with its chemicals, something that Kodak did in the 1990 but sold it going back to its film. Management Successes
The management successes of each company play a role in how each company strives to stay in business today. To obtain some insight into how each businesses management has successfully taken their respective companies through the new technological phases and have been able to keep up with the demands of the changing times.

Kodak Other companies have partnered with Kodak to achieve operational efficiency, enhance productivity and business transformations. Kodak built a reputation for quality and innovative products. Despite Japan being Fujifilm’s home market, Kodak made its presence in Japan and became one of the best photographic products of the year in 1994. In the 1980s Kodak gained advantage over Fujifilm and introduced the Panoramic Disposable Camera and, in turn, Kodak reduced pricing of its film to stay competitive. Kodak enjoyed a lucrative near monopoly of their home market. During the 1990’s Kodak also managed to keep cheap Japanese film out of America market. Kodak has had difficulties in keeping ahead of the new technology but they are working toward the future by forging ahead with the digital industry and making strides in other markets that will propel them into the future as an innovative company once again. It has been a difficult road for Kodak due to lack of good leadership and management but if they listen to their employees and get a sense of the new changing times they may be able to bring the company back from the brink of bankruptcy.

Fujifilm Fujifilm has always prided itself on having the technology to produce superior products to drive sales. The company has consistently spent 7 percent of sales on research and development to maintain a competitive advantage. Because of this Fujifilm was able to introduce a faster film with bright colors which was what the customer was asking for in the 1970s. In 1986 Fuji was the first to introduce the first one time use camera and by the time Kodak tried to catch up with the technology Fuji had established a lead in the one-time use camera that Kodak never experienced with traditional film. "The most decisive factor [for our success] was how drastically we were able to transform our businesses when digitalization occurred," Mr. Komori said. Where Kodak has failed in some business respects, Fujifilm has surpassed with innovative management strategies. Fujifilm has managed to sustain a competitive advantage even in other markets and they have seen their traditional business rendered obsolete but have managed to forge ahead with new innovative technologies. They have stayed above and ahead of the competition and they have aggressive marketing strategies. While Kodak stayed in the old business of film making, Fujifilm management saw the potential of other markets and businesses. Although Kodak was aware of these new potentials they did not take advantage of them leaving the door open for Fujifilm to enter. Comparison of Business Ethics and Social Responsibility In this comparison you will be able to understand the different ethical practices and social responsibilities each company takes to ensure their companies policies and procedures are held to a high esteem.

Kodak
“Kodak, we believe that doing well by shareholders also means doing right by customers, employees, neighbors and suppliers. In that spirit, Kodak operates its facilities, works with its partners and designs and markets its products and services not only to increase shareholder value but also to promote the development of the individual, the well-being of the community and respect for the environment” Kodak Corporate Responsibility Principles.
In the 1984 Los Angeles Olympic Games Peter Ueberroth, the Olympic organizer for US Olympic Games, visited Rochester and asked Kodak to be an exclusive film sponsor. Kodak refused the $1 million deal (far below the $4 million asking price). Ueberroth then asked Fuji and they accepted and agreed on the spot. Kodak did not sit idle even though they were asked first and initiated a legal ambush to divert attention away from Fuji. While Fuji was a worldwide sponsor of the Olympics, Kodak became a sponsor of ABC television’s broadcast of the games and an official film sponsor of the US track team. This was not a very ethical way to act by Kodak. Their first ethical standard is to conduct its business activities to high ethical standards. This did not happen during this event.

Fujifilm Fujifilm returned the event in the 1988 Olympic Games and thus began the sponsorship and ambush marketing that continues today. This type of ethical intensity is seen in both companies and demoralizes the companies within the customer base. Court battles continue within both companies, one blaming the other for their failures. Fuji has surpassed Kodak within Kodak’s home market because of the unethical behavior, and mismanagement by the Kodak leaders. Management’s Ability or Inability to Adapt to Changing Market Conditions Market conditions are crucial to any business. The market is an ever changing arena and if your company does not have a grasp of new technologies and does not move into the right areas, you will experience what Kodak is experiencing today. Truth be told, it's not so much business owners that want to see the many changes taking place in business, it's the customers. Discount buying, online shopping, social shopping and a lack of customer loyalty are all variables that face business owner in the economy of today.
"Both Fujifilm and Kodak knew the digital age was surging towards us," Fujifilm Chief Executive Shigetaka Komori said in a recent interview, "The question was what to do about it."
What Fujifilm did was to look further than simply moving to digital photography from analog. Instead, the company tapped its chemical expertise for broader uses, such as drugs and liquid-crystal display panels, cosmetics, as well; it seems the process for stopping photos from fading can be used on skin, too. Fuji had the ability to change with the times and stay above Kodak even with Kodak having been in business years before Fuji came about. What set Fujifilm apart from Kodak, Mr. Komori said, was the Japanese company's effort to branch out by employing technologies originally developed for photography. Kodak’s inability to adapt to the changing markets was because of poor management and leadership. They were aware of the digital age, they spent a lot of money to develop the digital camera but they did not continue to explore where the new business would lead them and continued to work on their film business, missing the opportunities of the future and what the new customer was looking for. Kodak is now embarking on organizational development within the company. They have since made a presence in the new technology areas of Silicon Valley and Atlanta hoping to capture the younger market with new digital technology. "As time passes, the fact shows that when a company loses its core business, some companies are able to adapt and overcome the situation, while others are not," Mr. Komori said in a prepared statement following the Kodak news. "Fujifilm was able to overcome by diversifying."

Three Recommendations for Increased Flexibility in Decision Making Brainstorming in which group members build on others’ ideas. Four rules to brainstorming are: the more ideas the better, all ideas are acceptable, group ideas are used to come up with more ideas and criticism or evaluation of ideas is not allowed. Brainstorming allows for a large number of alternative solutions. Rational decision making is the process of choosing a solution from available alternatives. Managers define problems, evaluate alternatives, and choose optimal solutions that provide maximum benefits to their organizations. Using groups to improve decision making. When used properly, group decision making can lead to better decisions than those typically made by individuals. Numerous studies have shown that groups consistently outperform individuals on complex tasks.

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