The History and the Core Business of Kodak and Fujifilm - Essay Example

KODAK AND FUJIFILM School: The history and the core business of Kodak and Fujifilm The Fujifilm Company was foundedin 1934. The company’s main areas of business include imaging and photography, and it started its international expansion after dominating the Japanese market. The company started operations in America in 1965, and its entry hit was sponsoring the 1984 Olympics held at Los Angeles. The appearance in the Olympics games gave the company the publicity it needed to penetrate the American market using their cheaper cameras, which enabled them to gain a considerable market share (Jarzabkowski, 2004). With the aim of widening and expanding its market reach, the company expanded into emerging and new markets, and that allowed them to build international presence; this strategy of international expansion was not a business core for the Kodak Company (Oswick, Keenoy & Grant, 2000). The company’s globalization process was quickened by its expansion of marketing activities and production centers into foreign markets. The Eastman Kodak company was started in 1880, and it grew to become the pioneer of innovative marketing and technological innovation and development. The business outlook was evident from its slogan for the 1880s, “You press the button, we do the rest.” As of 1976, the company had command over 85 percent of the camera and 90 percent of the film market sales in America. Until the 1990s, the company maintained a position as one among the most valued brands in the market, and that could be traced to its core areas of emphasis in business. The business of the company was built around four main principles, including international marketing and distribution, low cost mass production, focusing on the needs of the customer and advertising extensively. Later, the company left the camera business, and has reorganized its business around three business areas, including entertainment, Graphics and commercial filming; document imaging and personalized imaging; and enterprise and digital printing (Jarzabkowski, 2004). The change of business focus came after the company arrived at the decision of filing for bankruptcy under chapter 11 in 2012. Comparison and contrast of the management approaches of the two companies The management approach of Fujifilm is different from that of Kodak, especially in the areas of managing and initiating innovation. The company concentrated on the delivery of digital cameras and print services, apart from venturing in other related markets. Fuji’s change of business name corresponded with the change of management model, where emphasis was channeled towards the discovery and the exploitation of new product options, using existing technologies, instead of, only, serving the known needs of customers (Oswick, Keenoy & Grant, 2000). The company relied on joint ventures and strategic alliances in its entry to foreign markets, and the entry strategy emphasized and strengthened the company’s management approach. The evidence available from market operations shows that the management approach is one dominated by the development of new products and investing in new markets, instead of capitalizing on marketing power to keep market dominance like Kodak (Jarzabkowski, 2004). In the areas of product development and innovation, the Kodak Company focused on the marketing of digital imaging to a large extent; the company established Kodak picture kiosks and Kodak Gallery. Pioneering the production of digital imaging made the company, the market leader in digital imaging, and it later diversified into the ink jet industry, among others. The business focus of Kodak evidences the fact that it became a consumer brand with a strong technology base, evidencing its managerial outlook as that of serving the needs of its customers, while counting on digital imaging for further growth potential. The nature of Kodak’s business focus evidences that it used a market-based model, where focus was kept in the area of analogue photography, which faced the risk of extinction, and that led to the loss of market dominance to Fujifilm. The disadvantage of the management approach is that it does not promote company change, which is what allowed Fujifilm the advantage of gaining more market share. Other management differences that have impacted the relative success of Kodak and Fujifilm The management differences that have triggered the differences in the relative success of the two companies include that Kodak, unlike Fujifilm used a slow decision-making process, and the effects included that it was unable to take advantage of the digital world of photography fast and well enough. The slow nature of the decision-making speed of the management of Kodak failed to channel the company into the corner of acting and exploiting the new technology that it had developed, while Fujifilm took advantage of the new technology and platform. The second management-related problem that caused the relative success of the two companies was that it was affected by the management’s inability to continue technological development. The failure to continue technological development could be traced to Kodak’s unwillingness to invest in the advancement of the new technology and transitioning its production capacity towards it, with the hope that it could capitalize on the two technologies. Partly, in the part of Kodak, it is possible to say that they sought to take an easier route in the adoption of digital photography, where they could source revenues from the earlier platform of analogue imaging and photography. On the other hand, Fujifilm took the long route of investing in the research and the development of its imaging and photography products and more innovative services, using the new technological platform (Crow & Hoek, 2003). The second management difference that led to the relative success was the deterioration of the company’s traditional culture of change and innovation. Initially, that was the culture that had made the company an industry leader during the previous decades, until complacency affected the way it embraced new technology and developed innovation and embraced change. This management difference can be traced as early as the 1980s, when the company was unable to keep up with the pace and the innovativeness of Fujifilm in the roll-film business. More importantly, instead of capitalizing on the available opportunities, the company became more interested in changing the CEO of the company, so as to change the course of the company. The ineffectiveness of the change process is evident from the fact that hiring George Fisher was not complemented by the adoption of a deep-reaching research and development strategy, in order to initiate the rechanneling of business and development (Jarzabkowski, 2004). The management of the company failed to complement the successful growth of the company with new sources of growth, and that gave evidence that the management grew complacent. The complacency of the management lessened its ability to explore areas of growth, and ways of taking advantage of it; the mistakes limited the diversification of the company’s product portfolio for future success. In the long term, the complacency was spread across the organization, and that meant that the creativity of the company as a whole reduced, and that reduced the company’s ability to capitalize on the digital technology to bring more products into the market (Oswick, Keenoy & Grant, 2000). The increase in the complacency of the management made it impossible for the management to make the adoption of the digital technology an issue of urgency, and that was the main shortfall that gave Fujifilm the opportunity to succeed, while Kodak started moving into failure. The mistake of the management could be pointed out as that of allowing the complacency of success to limit the voice of the company’s innovators. On the other hand, Fujifilm had avoided this pitfall and had engaged its innovators in the development of technology, based on the emerging digital platform, and that allowed the company to succeed. In the case of Fujifilm, the growth of the company can be attributed to the fulfillment of the potential needs of different stakeholder groups, including the customers. Firstly, the social responsibility of the company could be traced as the roots of its success in utilizing the digital platform of photography to improve the consumer’s experience of photography. This is the case, because the company worked based on the rules of ethics and common sense, including that of not denying the customers, the opportunity to advantage from the new technological platform. By making it a matter of urgency to improve the experience of consumers using the digital platform, the company took its social responsibility, as a tool to cultivate more trust and one that can meet the demands of society. Through the creation of a new area of value for the consumer, the company was able to offer more product varieties to its customers, and that also offered it a new frontier for economic progress. In the case of Kodak, the company emphasizes that respect, trust and integrity were the pillars of the company’s interactions with different stakeholders, including customers. However, the actions of the company appear not to match with the standard of safeguarding the interests of the customer, by failing to offer them the experience of new products, based on the newly-developed digital technology (Jarzabkowski, 2004). The major reason for not adopting the new technology was that the company hoped to keep making big profits from the analogue technology, where they had dominated the US and the international market. This makes it evident that the company’s approach to ethics and social responsibility was not the main source of the problem, but that the problem arose from its inability to sacrifice profitability interests for the good of its customers. However, in the long-term, profitability was affected adversely, by the decision not to cut profitability for more sustainable product development (Crow & Hoek, 2003). The extent of managerial adaptation to changing market conditions The changing market conditions, which made the whole difference, in the course of the two companies included the emergence of the digital age, and digital photography and imaging. The adaptation to the changing market conditions were differentiated by the actions taken in response to the emergence of the digital age. Kodak, on one hand, simply looked at the market change as one requiring them to complement analogue photography with digital photography. However, to Fujifilm, the change called for a change of the focus of business, to cover new areas that could not be adequately taken by analogue photography (Crow & Hoek, 2003). For example, instead of adopting digital photography in the photography and imaging industry, the company viewed it as a platform for electronic operations and advancing healthcare. Apart from the adoption of the digital technology for imaging, the company saw the use of the technology in alternative markets, in order to complement the business of digital imaging, but Kodak did not see the change the same way. Fujifilm used the change of market needs and the emergence of new technology as the triggers calling for the initiation of market diversification, and that helped it to survive the financial crisis that contributed to the crippling of Kodak (Oswick, Keenoy & Grant, 2000). Recommendations of ways a company can build flexibility for backing decision-making processes, so as to better adapt to changing market conditions The first way is increasing the agility of the company (business), management and the employees. The increment of a company’s agility can be realized through increasing its flexibility, speed, visibility and scalability, and these enable it to better respond to market changes. The second way is administering a careful analysis of the company’s market strategy, with the aim of making it more adaptive to the changing conditions in the marketplace. This is realized through a monitoring system for checking out changes that may impact it and then using them advantageously (Oswick, Keenoy & Grant, 2000). The third way is by leading the organization in general, and the employees into a leadership model of operation, where the leaders of the company – at all levels – are able to align business with up-to-date corporate strategy in response to market changes (Jarzabkowski, 2004). References Crow, D., & Hoek, J. (2003). Ambush Marketing: A Critical Review and Some Practical Advice. Marketing Bulletin, 14(1), 1-13. Jarzabkowski, P. (2004). Strategy as practice: recursiveness, adaptation, and practices-in-use. Organization Studies, 25 (4), 529-560. Oswick, C., Keenoy, T., & Grant, D. (2000). Discourse, organizations and organizing: concepts, objects and subjects. Human Relations, 53(9), 1115-1124. Read More