Kodak vs. Fujifilm

Me

Professor Swinney

Strayer University

January 19, 2014

Abstract

I began writing to show how business can quickly go out of business, if the owners do not keep an eye on its public. Kodak failed to meet its customer’s needs, so the company could not keep up with demand. I have gone shopping and found myself searching for an item I have seen advertised in another store. Only to be told that the item is out of stock or the store does not carry that product. This is what happens when supply does not keep up with demand. The company goes under, under the strain of their competitor’s pro activeness. Kodak needed to make changes sooner rather than later when their management made decisions that could help or hurt Kodak. Fuji constantly made changes and made the necessary changes to meet their customer’s needs. As a business owner being able to reach and understand each customer will help in sells so profits will rise. Many people continue to shop where products are cheap and convenient. Staying in business is like knowing and meeting different people with different wants and needs and then helping them with finding an inexpensive means of finding them. That is the nature of business and a way to keep a customer satisfied. Building a relationship with customers is the most important aspect in business. If the business does not speak directly to its customer’s they will soon have a loss in customers. Management plays an important part in the structuring of a business if the manager is not being active in the search for new ideas. Or technics to improve the company that company will be lost. New product must be advertised and sold in order to grow successfully. Ideas must be turned into product and problems concerning issues in a product must be changed into improvements for the customer. All these things must be completed to make sure there is a constant growth in business, so its sells could be turned into capital to expand the business. Introduction Growing up in a big family where parents loved taking pictures and capturing that special moment. Kodak and Fujifilm played an enormous role, and they are known in many households around the world. When it comes to the history and competition, management strategies play a key role in the way two competitive company embrace innovation. Kodak and Fujifilm companies focus on both photography and imaging as their core businesses. Kodak had an upper hand of starting earlier than Fujifilm, 1888 compared to 1934(Kodak and Fujifilm), Fujifilm adapted more to the market changes and currently still have a leading force in the film industry. Kodak is presently in bankruptcy protection since January 2012 under Chapter 11 with hopes to try to reconfigure its business strategies. Slow and complacency adaption dominated in Kodak Company’s while the Fujifilm embraced diversified spirit in all aspects of the market relevance. Each company’s ethics and social approach clearly reflects their profitability to give back to the community. Production standards were maintained that satisfied all consumers.
Possible changes of the decision-making process that would embrace flexibility and be the best way to ensure diversity and innovation in any organization.

Describe the history and core business of each company.
Kodak,
Kodak was formally known as Eastman Kodak Company. The founder George Eastman (1888), patent and developed a technology that would change the way we see things in still life. Eastman launched a camera that focus mainly on photography and capturing images. Kodak products ranged from photography equipment to film, paper and color chemicals. Kodak was making a big profit by the 1990’s. ( Kodak, n.d.). Although Kodak developed the basic technology for the digital cameras in 1975, the idea was dropped due to the fear that it would threaten the film business (Williams, 2013). Kodak dropped the ball on what would have been the biggest technology development in the film industry because they could not see the future without traditional film. Digital cameras will be much faster and more efficient than the traditional film, so Kodak sales dropped considerably. Competition from other companies would eventually lead to Kodak’s loss of market shares to United States and Worldwide. January of 2012, the company filed Chapter 11 bankruptcy protection, and a year later the Court approved financing. Kodak the sold patents to a group of companies: Apple, Microsoft, Google and others.
Fujifilm
Japanese company was founded in 1934(Fujifilm, n. d.). They also focused on photography and imaging. The company soon ruled the Japanese market, which was ranked second after the United States in film usage (Fujifilm, n. d.). Eventually, the company entered the global and American market with a bold move, using aggressive marketing and low prices (Fujifilm, n. d.). The turning point of the Fujifilm’s success in this venture was marked by the 1984 Los Angeles Olympics (Fujifilm, n. d.), when they became the official film of the event. This placed Fujifilm on the market permanently, and the company started taking over Kodak’s market share by offering equal quality products for a cheaper price (Fujifilm, n. d.). As Fujifilm prepared for the fast changing needs in the market, it widened its business scope to digital cameras, printers, photocopiers, and optical devices (Fujifilm, n. d.). It also tapped into the health sector, producing medical equipment that includes X-ray imaging and chemicals (Fujifilm, n. d.). Compare and contrast the approach to management that each company has pursued in order to embrace innovation. Kodak’s failure to embrace innovation in a timely fashion could be blamed on its management’s approach. They seemed to “rule” from behind the desk from their Rochester headquarters, which made them ignorant about the coming changes in technology and customers’ needs, and how it would affect them. Even when they were advised that the move to digital technology was necessary, management still refused to take action. In fact, avoiding revolutionizing the technology they originally created is the main reason behind Kodak’s current troubles and loss of share in the market (Williams, 2013). Although they created the first ever digital camera back in 1975, top-level management rejected the idea in fear of losing its core business in film. Looking back, this seems to be the turning point in the company’s fortune (Mui, 2012). The predicted change to digital technology 20 years later was seen as the far future, and as the company enjoyed success, leadership did not see a reason for change.
In recent years, however, Kodak tried to change its management strategy in embracing innovation. They shifted to delocalize research and collect data, in order to gather more information about consumer preferences. They also diversified top-level management to ensure best skill input in each field, and implemented a more democratic management style that listens to staff suggestions and ideas (Williams, 2013). Fuji, on the other hand, took a different approach from the beginning; while they were successful in the film business, they prepared for the switch to digital technology and developed new business lines. Initially, they started off as a photography and imaging company, then diversified into different other products such as digital cameras, cosmetology, and medical equipment. This enabled Fujifilm to achieve profits depending on the preferences of their various customer bases. After its successful dominance in the Japanese market, Fujifilm realized the potential in venturing into the global market. The 1984 Olympics in Los Angeles marked the breakthrough point in this venture, when Fujifilm became the official film of the event. This provided the company the opportunity to get a growing portion of Kodak’s market share (Schum, 2012). A joint venture with the UK based Xerox (Fuji Xerox) helped establish further global production and sales. Their consolidated funds equipped both companies with capability for innovation, research & development, and investments. Determine what other management differences have impacted the relative success of Kodak and Fujifilm. Provide specific examples to support your response. Resistance to change by management was a major cause for the failure of Kodak. They felt their initial plans and strategy worked so well that change wasn’t needed. They developed a false sense of security and failed to realize and counteract the threat posed by Fujifilm. Apparently, despite having great ideas, the management team never actually implemented them (Mui, 2012). Kodak also seemed to believe that its core strength lay in brand and marketing, and that it could simply partner or buy its way into new industries, such as drugs or chemicals. But without in-house expertise, Kodak lacked the ability to integrate the companies it had purchased and to negotiate profitable partnerships (Schum, 2012). Unlike Kodak, Fujifilm implemented its goals and ideas, and the company’s quick adaptation to change was a defining advantage over Kodak. When they realized the impending move towards digital technology in the early 1980’s they prepared for it and diversified their business lines. This way they were able to replace lost profits from film sales with new revenues, and reinvested those profits in research and development (Schum, 2012). They also utilized diversity as a key management strategy, and invested in various alternate products such as medical equipment and digital technology while realized the need to develop in-house expertise in the new businesses. Evaluate each company’s approach to ethics and social responsibility and the impact those approaches have had on each company’s profitability. Kodak is committed to environmental, ethical, and social responsible operations that include maintaining safe work environment and providing quality products. Kodak’s single-use recycling programs help to avoid waste while saving resources and reducing cost of reusing the recycled material. In 2004, Kodak was noted for its anti-discriminative policies despite of sexuality and for the fair treatment of minorities and women by the Business Ethics magazine. All this is in effort in promoting Kodak’s image as a trustworthy and conscientious company. Fujifilm is obligated to ethics and social responsibility as well. The company set high standards in this regard which all employees have to observe and comply with, including top-level management. This ensures that these measures and values are integrated in all company procedures, increasing productivity, efficiency and thus profitability. They also implemented a transparency policy to keep the government and customers aware of its business activities. Discuss the extent to which management of both companies adapted to changing market conditions. Although both companies conducted environmental scanning to monitor the changes in the market, they chose different paths for execution. Kodak stood firm in their traditions, and was overly confident in their brand and marketing. They tried to make strategies to keep up with changing market conditions, but it was always too little too late. Management made efforts to diversify the company’s products without much success, and by the time they decided to “join” the digital photography market, it was quickly cannibalized by emerging smart phone cameras. Currently, the company is trying to reconstruct its strategies with a main focus on commercial printing. Fujifilm long realized the upcoming changes in photography technology and they implemented strategies in the late 1980’s to capitalize in film photography and invest the revenues in digital technology. This ensured that its photography segment stayed strong in the changing market. Over the years, the company also acquired diverse ventures to maintain high profits in case of the potential decline of its core business in film photography (Schum, 2012). Fujifilm’s diversity of in-house expertise and products ensured a smooth transition during changing market conditions.

Recommend three (3) ways any company should build in flexibility to back up its decision-making process in order to adapt to changing market conditions. • An open mind: A democratic management approach that is open to the ideas of employees and consumers is a great way to build flexibility in the decision making process. It emphasizes team work over individual stars, and it allows exchange of ideas, information, and perception, and gives companies an edge over other organizations that limit decision making to only top management. Welcoming feedback also improves products and services that are better appreciated by customers, and it helps figure out what customers want. • Studious speediness: Companies should research all their options before they make a decision, and then make sure that all the major stakeholders agree on a course of action. Allowing time to make important decisions ensures flexibility by giving room for changes. Once they decided what to do, however, they have to be fast to move the product to the market in order to stay ahead of the competition. • Long-term planning: Instead of just responding to trends, fads, and quarterly numbers, companies also have to look far down the road and try to develop products that will resonate for a long time. They have to monitor the market for possible changes, and design their products accordingly to give them flexibility and to stay strong during changes.

References
Bloomberg, (1998). Kodak-Fuji in U.S expected to heat up, New York. www.articleslatimes.com/1998/feb/16/busines/fuji.bloombergnews
Fujifilm. (n.d). Fujifilm Global. Retrieved from http://www.fujifilm.com/
Kodak. (n.d). Building the Foundation. Kodak. Retrieved from http://www.kodak.com/ek/US/en/Our_Company/History_of_Kodak/Building_the_Found ation.htm
Mui, C. (18 January, 2012). How Kodak Failed. Forbes. Retrieved from http://www.forbes.com/sites/chunkamui/2012/01/18/how-kodak-failed Schumpeter,(2012). How Fuji film survived, www.economist.com/blogs/Schumpeter/2012/how- Fujifilm survived
William, C (2012). Management: MGMT5. (5th ed.). Mason, OH) South-Western Cengage Learning
Ziemba,S.(1996) articles about Fuji- chigogotribune.www.articles.chicogotribune.com/keyword/Fuji