Fujifilm Versus Kodak - Research Paper Example

Fujifilm vs. Kodak Affiliation History and Core Business Eastman George founded Kodak in the late 1880s. Its original was Eastman Kodak Company. The company is credited for launching its revolutionary camera that made the process of taking photos simpler (Stuart, 2005). Kodak focused on imaging and photography that entailed production of photography equipment used in filming, color and paper chemicals. After one hundred years of operation, the market share for Kodak was at 90%. In 1975, Kodak had an idea to develop a basic technology associated with digital cameras, but due to fear that this would threaten the film business, it was dropped. The executives at Kodak did not want to abandon the traditional film. They did not realize how digital cameras would become common within a short time. Since there was a slow transition of traditional to digital technology and competition from other companies, Kodak lost a considerable market share globally. By early 2012, Kodak filed for Chapter 11 bankruptcy protection which was approved by the court for financing. Kodak was able to sell its patents to various companies like Google, Apple and Microsoft among others (Stuart, 2005). Fujifilm was started in 1934 and like Kodak, focused on imaging and photography. The company was at the top of the Japanese market and ranked the second best in film usage after the United States (Nakamura, 2000). Fujifilm entered the global market and made use of aggressive marketing with low prices. The company’s breakthrough was in 1984 when it chosen to be the official film of the Los Angeles Olympics. Fujifilm took its place in the global market permanently. This made it overtake Kodak’s market share since they offered similar products at a cheaper price. Fujifilm was fast to widen its business scope to printers, digital cameras, optical devices and photocopier. In addition, Fujifilm engaged its services into the health sector by producing medical equipments and machines such as x-ray imaging and chemicals (Nakamura, 2000). Approach to Management Kodak company failure to acknowledge innovation in the late 1970s could be blamed on the management’s approach (Haig, 2011). The management seemed to control from behind the desk right from the headquarters at Rochester. This made them become ignorant about the new inventions in technology and the increasing customer needs. They were advised to embrace the digital technology that they had created in 1975, but the management was reluctant. The main reason why Kodak remained behind was avoiding revolutionizing technology that led to the loss of market shares. This became the turning point of the company. Recently, Kodak has tried to change its strategy of acknowledging innovation. Kodak decided to do research and collect data in order to know the customers’ preferences. In addition, they diversified the level of management to instill best skill in every field. They implemented a democratic management style that focused on taking ideas from its staff (Haig, 2011). Fuji took a rather different approach right from the beginning. As they got successful in the film industry, they were also concerned on switching to digital technology and come up with new lines in the business. Initially, they were in the field of imaging and photography and later diversified to the production of other productions such as medical equipments, digital cameras and cosmetology. Fujifilm was able to get profits since they satisfied different customer preferences. After being at the top of the Japanese market, Fujifilm expanded to the global market. Fujifilm services became acknowledged after covering the Los Angeles Olympics event (Nakamura, 2000). The company got the opportunity to take over a large part of the Kodak’s market share. Fujifilm joint adventure with Xerox further elevated the company to realize more global productions and sales. By use of consolidated funds, the two companies (Xerox and Fuji), got enough capability for research & development, innovation and investments. Management Difference that have Impacted the Relative Success The main cause of failure at Kodak Company was the resistance by the management to change. They felt there was no pressure to change since their initial plans and strategies had worked well within the years. There was an unstable sense of security that prevented them from realizing and counteracting the threat that Fujifilm was presenting. Most of the ideas presented to Kodak were never implemented. The management believed that their core strength was in brand marketing, and they had capabilities to partner or buy its activities into new industries such as chemicals or drugs. Kodak did not have the ability to integrate the companies it had purchased and form profitable partnerships (Haig, 2011). Fujifilm was focused in implemented its ideas and goals, unlike Kodak (Baron, 1997). This made them have the added advantage over Kodak. They prepared for the move to digital technology in the early 1980’s and diversified their lines of business. They replaced lost profits from the sales of film with new revenues and ploughed back those profits in research and development. In addition, Fujifilm took advantage of diversity as an essential management strategy (Baron, 1997). They invested in other products after realizing the need to come up with in-house expertise in the new ventures. Social Approach and Ethics Kodak is committed to ethical, social and environmentally responsible operations. These operations include maintaining safe facilities and ensuring they provide quality products that minimize the negative impact on the environment (Eastman Kodak Company, 2003). Kodak has a single use recycling program that assisted in avoiding waste and saved resources. In addition, it reduced costs through reusing the materials that were recycled for manufacturing. In the early 2000’s, Kodak was acknowledged by Business Ethics Magazine for laying down some anti-discriminative policies that addressed employees’ sexuality and fair treatment of women and minorities. These efforts made Kodak reputation and image come out as a conscientious and trustworthy company hence attracting a strong and loyal base of customers. Fujifilm is also committed to ethics and social responsibility. They set high standards that their employees observed and comply with that include top-level management. By doing this, these values and measures are integrated all through the activities and procedures to increase efficiency and productivity. Fujifilm also has a transparency policy that entails keeping its customers and the government aware of its ventures and business activities (Nakamura, 2000). Ways the companies should build in flexibility to back up in decision-making process Both Fujifilm and Kodak conducted environmental scanning in order to monitor the market changes, but they had different avenues of executions. Kodak retained its traditions and was comfortable with its brand and marketing (Baron, 1997). They put effort to keep up with the market conditions that were changing, but it was all in vain. There was no success since the efforts by the management to diversify its products and services proved fruitless. When they decided to acknowledge the digital technology, the emerging smart phone cameras took over the market. The company is currently trying to reconstruct and come back to the market with much focus on commercial printing. Fujifilm, on the other hand, was quick to note the upcoming changes in the photography technology and made efforts to implement them (Baron, 1997). They capitalized in film photography ad used the revenues to implement digital technology. Its photography segment remained powerful in the market regardless of the changes. Fujifilm ventured into maintaining high levels of profits in case there was a decline of its main business in film photography. As a result of the in-house expertise and products, Fujifilm’s diversity experienced a smooth and stable transition to the market conditions that were experiencing changes. The three recommendations are studious speediness, open mind and Long-term planning. Studious speediness Companies should ensure that they research all the options before they reach a final decision. It is advisable that they make sure that all relevant stakeholders are in the same course of action by considering everyone’s view and ideas. It is of importance to take ample time to take decisive action so as there is flexibility for absorbing changes (Grunig & Kuhn, 2005). After reaching a consensus, they need not waste time before moving the product and services to the market to realize competitive advantages. An open mind There should be a democratic management approach in order to take note of ideas that the staff and consumers present. It builds on the flexibility aspects of the company in decision-making process (Grunig & Kuhn, 2005). An open mind ensures that there is exchange of ideas, perceptions and other information. In addition, it encourages teamwork and gives companies a boost over the other organizations that depend on the top management for decision-making. The companies should build an environment that encourages feedback in order to improve its services and products. Long term planning Companies should not only respond to fads, trends and quarterly numbers nut also look much farther and come up with products that have the ability to resonate for a long time. Many efforts should be focused in monitoring the possible market changes and come up with products that will be able to stay strong regardless of the changes (Grunig & Kuhn, 2005). References Baron, D. P. (September 06, 1997). Integrated Strategy and International Trade Disputes: The Kodak-Fujifilm Case. Journal of Economics & Management Strategy, 6, 1, 291-346. Eastman Kodak Company SWOT Analysis. (2003). Datamonitor Plc. Grünig, R., & Kühn, R. (2005). Successful decision making: A systematic approach to complex problems. Berlin: Springer. Haig, M. (2011). Brand failures: The truth about the 100 biggest branding mistakes of all time. London: Kogan Page. Nakamura, M. (2000). The Japanese business and economic system: History and prospects for the 21st century. Houndmills, Basingstoke, Hampshire: Palgrave. Stuart, N. M. (2005). The history of photographic education in Rochester, New York, 1960-1980. Read More