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Kodak Versus Fujifilm

In: Business and Management

Submitted By ShamBoo
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George Eastman, the founder of Kodak wanted to make taking pictures easier and make it available to everyone. In 1883, Eastman revealed in grandeur, the invention of photographic film in roll. Five years later in 1888, with the slogan “you press the button, we do the rest”, George Eastman introduced the first Kodak camera to the consumer market. The cameras came preloaded with sufficient film for 100 exposures. He made a cumbersome and complicated process easy to use and accessible to nearly everyone and thus gave birth to snapshot photography. Eastman established his business on the principles of mass production at low cost, international distribution, extensive advertising and a focus on the customer. In 1889 Eastman and his research chemist perfected and introduced the first commercial transparent roll film, as a result, Thomas Edison developed the motion camera in 1891. A few years later Kodak marketed the Folding Pocket KODAK Camera, currently considered as the ancestor of all modern roll film cameras.
By the time the 20th century rolled around, Kodak accounted for 90% of film and 85% of camera sales in America. Then, the evolution began and digital photography replaced photographic film and smartphones replaced cameras. As a result of the evolution, Kodak consequently experienced a decline in sale of photographic film, because of its slowness in transitioning and adapting to the change; in spite of the fact that they invented the core technology used in current digital cameras. In January 2012, Kodak filed for Chapter 11 bankruptcy protection, resulting in the sale of many of its patents to aide in restructuring. Kodak reemerged and is currently focused exclusively on digital printing for business. For this reason, Kodak’s most valuable operations in terms of core business and growth businesses are: retail systems solutions, document scanners, and digital plates. The growth businesses are: consumer inkjet, digital printing solutions, enterprise workflow software and services and packaging solutions.
Initially, Fuji was the second-largest maker of photographic film in the world, trailing only Eastman Kodak, but leading in Japan. Fuji established its reputation in the domestic market. Buyers were not willing to forego losing a desired image to inadequate materials, regardless of the cost; therefore, Fujifilm knew that brand reliability would prove to be critical in the photosensitive materials industry. Fuji continued to consult and research, until it introduced its first film in 1936. In 1984, Fuji was one of the title sponsors of the 1984 Los Angeles Olympics, an incredible opportunity with immense potential that Kodak passed on. In addition, Fuji offered cheaper camera film and established a film factory in the United States, leading to a considerable gain of market shares in the United States. On the other hand, Kodak had little to no success in Japan. Technological advancements led to the rapid growth in the use of digital cameras across the world. The need for the photographic film declined rapidly as the digital camera became the camera of choice .
This adjustment in customer preference forced Fuji to implement responsive management reform with the goal of effecting drastic transformation of its entire business structures. The company had foreseen the possibility of customers shifting from film to digital as early as the 1980s. Subsequently, they developed a three-prong strategy consisting of preparing for the shift to digital technology, to squeeze as much money from the businesses as possible, and to develop the new business lines. Unlike Kodak, Fuji’s prompt adaption to the shift, gave Fuji the competitive advantage of denying Kodak its continued dominance in the United States. Today, Fujifilm is more than a photographic enterprise, with growing involvement in the wider realm of imaging and information. At first Fuji’s core business was the development, production and sale and servicing of color photographic film, but has evolved to include, digital cameras, photofinishing equipment, color paper, photofinishing chemicals, medical imaging equipment, graphic arts equipment and materials, flat panel displays, optical devices, photocopiers and printers.
Though similar in some ways, Eastman Kodak and Fujifilm engaged in very different methods of management in an attempt to embrace innovation. The management team at Fujifilm was very innovative while embracing change. On the other hand, the management team at Kodak was not. While Fuji was researching and inventing to ease their transition into the digital technology, team Kodak was not looking ahead and was relying on brand marketing and consumer loyalty. Fujifilm’s managers transformed its company from a fairly narrow photographic supplier into a diversified company with significant healthcare and electronics operations. In contrast, Kodak could not successfully negotiate profitable partnerships to widen its consumer base. Fuji’s management team was able to overcome by diversifying into a vast array of different avenues, while Kodak relied solely on its original core business. Fujifilm managers were willing to take risks by allocating and maintaining in house talent and breaking the longstanding Japanese corporate traditions. However, Kodak had no in house expertise, while it’s slow to change attitude and thinking they had the “perfect products” and unwilling to adapt to change led to their downfall. Finally, the managers at Fuji were able to compete in the new global market, whereas Kodak’s managers were unprepared when faced with the immediate problem of their inability to compete.
Other management differences that have impacted the relative success of Kodak were their complacency. Management failed to revolutionize, while top managers were not “devoting their priorities toward turning that problem into a huge urgency around a huge opportunity”. The hierarchy of management did not pay attention to the oncoming problem. Even though they held the solutions in the palm of their hands, complacency got the best of them. On the other hand the relative success of Fujifilm was impacted by their top mangers decision to reconstruct their business model and adjust to the new digital technology. They were proactive. The difficult conversations were held and the difficult decisions were made, therefore they reemerged stronger and more diversified.
Through Kodak’s approach to ethics and social responsibility, they are committed to operate in an environmentally, ethically and socially responsible manner. This commitment includes: maintaining safe facilities and operations, providing goods that are safe and minimize environmental burdens throughout their life cycle, energy conservation, anti-discrimination policies for gay, bisexual, and transgender employees and the fair treatment of minorities and women. Kodak is also dedicated to providing community and education support, employee relations and pollution prevention programs. Equally, Fujifilm is committed to the respect for basic human rights, open fair and clear corporate activities, environmental conservation and protection, and also protection/preservation of corporate assets and information. While, both companies are similar in their approach to ethics and social responsibility, Kodak went further to ensure that their policies included everyone. Fuji does not place too much of an emphasis on minorities and women, education support and the community. Nevertheless, both companies are thriving and have continued to remain profitable. Kodak’s inclusion of “all people” has helped to bolster it into making a comeback while revamping itself into one of the top companies to work for.
Although it took Kodak longer to adjust to the transition to digital technology, eventually they got it. The management of both Kodak and Fujifilm adapted to the changing market conditions by restructuring and making changes that were tailored to their needs. Kodak’s management has adapted by completing one of the most remarkable turnarounds in corporate history. Changes were made to drive future successes, by forging stronger partnerships with outside suppliers in order to be more responsive to rapid changes in technology and markets. Management revamped their corporate culture to simplify processes and drive focus on critical success factors, while investing in development of employees, refocusing on accountability and a deeper commitment to further progress. On the other hand, Fujifilm’s management adapted and continues to adapt by creating beneficial and valuable products and services. Management continues to remain proactive in their involvement of the entire Fujifilm group in business development, developing new products and creating new value. This will be accomplishes by realizing great growth in healthcare business, further expansion in highly functional materials and further growth and improvement of profitability in document solutions business. In addition, management will venture into strategic restructuring, stringent cost reduction and profit improvement. Also, adaption will be accomplished through the expansion of their market by providing high quality, super cost performance products to accommodate market needs in priority business fields and speeding toward global
Any company should build in flexibility to back up its decision-making process in order to adapt to changing market conditions by strategizing, analyze external market, and analyze company’s resource and competitive position. Strategizing allows a company to have a game plan for how to grow the business and how to compete successfully, how they can compete in a single industry and how to diversify broadly or narrowly and through the development of expertise and resource strengths. A strategy is based on the company’s current business approaches, future plans and efforts to strengthen its competitiveness and performance. Next, the company should always analyze its external environment. Its attention should be focused on the competitive atmosphere in which the company operates, together with the technological, societal, regulatory or demographic influences in the large-scale environment that are acting to reshape the company’s future market arena. Finally, to build in flexibility the company should analyze its resources and competitive position; this is accomplished by evaluating its internal circumstances; its resource capabilities, relative cost and competitive strength versus that of their rivals. Revealing competitiveness is useful for the reason that is help managers match their strategy to that of the company’s own particular circumstances.
Kodak and Fujifilm had a competitive and dynamic history; separately and together. The evolution of picture taking and the shift to digital technology led to a transition in the photo industry. Kodak was unable to adapt in a timely manner to align with new customer preferences, therefore consumers went elsewhere. Fujifilm embraced the change and took advantage of Kodak’s reluctance. In the end, business approaches, business management and marketing techniques is detrimental to the success of a company. In addition, for a company to thrive and be successful, it must be flexible and able to adjust to consumer needs and tastes.

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