Kodak and Fujifilm - Case Study Example

Kodak and Fujifilm al Affiliation Kodak is a global player in the business of manufacturing photography equipment and Fujifilm is a global photographic film manufacturer. As Kodak enjoyed photography equipment manufacturing dominance in America, Fujifilm became a monopoly in photographic film manufacture in Japan. In regard to creating a global presence and diversifying into new markets, Fujifilm emerged top ahead of Kodak, although Kodak beginning had been excellent. While Fujifilm managed to start a factory in the United States, giving it a large share of market there, Kodak had minimum success in penetrating Japan’s market and therefore didn’t get a significant share. Although Kodak was the first company to come up with the digital camera, it only got to introduce it many years later, which led to the company being overtaken by Fujifilm, which got to introduce the cameras in the market and make sales before Kodak did. Fujifilm Company had predicted the shift from film to digital and it took drastic measures to adjust. This paper discusses the history and core business of each company, their respective management approaches, management differences and their impacts on both companies, each company’s approach to ethics and CSR, management in changing marketing conditions and recommends ways in which the companies can build flexibility to adapt to changing market conditions. Keywords: Kodak, Fuji film, CSR (Corporate Social Responsibility), Management, Business, Market Introduction Kodak is a global player in the business of manufacturing photography equipment. It is very popular in America, where it is based (Pham-Gia, 2008). The company was started years back by George Eastman when he first put into the market, the pioneer camera. With the pioneer camera, photos could be taken with a single click and this made the process of taking photos easier, since previously, it was very complicated. Through this, Kodak attained a solid foundation. The aim of the establishment of Fujifilm was to manufacture photographic film. The company was established in 1934 (“Corporate History,” n.d.). As Kodak enjoyed photography equipment manufacturing dominance in America, Fujifilm became a monopoly in photographic film manufacture in Japan. Fujifilm was aggressive in creating a global presence and diversifying into new markets. The company offered cheaper photographic film and established a factory in the United States, which gave it a large share of market there, while Kodak had minimum success in penetrating Japan’s market and therefore didn’t get a significant share. The poor performance of Kodak in Japan led Kodak to fill a petition with the United States commerce department, arguing that its poor performance in Japan was a result of malpractices by Fujifilm. The petition was later rejected. The spread of digital cameras led to an increase in photographic films demand and in response, Fujifilm implemented management strategies aimed at taking drastic reforms of its structures. Fujifilm Company had predicted the shift from film to digital and it took drastic measures to adjust. While both film companies had clear knowledge of this fundamental issue, Fujifilm had a successful shift, while that of Kodak failed leaving the company in bankruptcy. History and Core Business of Each Company Slide explains that Kodak Company, also known as Eastman Kodak Company, “was formed as the Eastman Dry Plate Company by George Eastman (1854-1932) and Henry A. Strong on January 1, 1881” (2013, p. 62). The company’s name has changed three times, with the names being Eastman Dry Plate and Film Company, Eastman Company and Eastman Kodak Company in 1884, 1889 and 1892 respectively (Slide, 2013). Slide adds that “the present company was organized in 1901” (2013, p. 62). The current Kodak company was formed in 1901 (Slide, 2013). Kodak company name is identified with still cameras and film. Over the years, the company has introduced different kinds of films. Kodel, Colorburst, Ektaprint, Instamatic, Kodachrome, Brownie, Recordak, Eastman and Kodak are all trademarks of the Kodak Company (Slide, 2013). The Kodak Company grew rapidly and the most skilled technicians and scientists were hired to work in the company. The company regularly manufactured new products and as a result of this, it gradually developed into a multinational company. In 1975, Kodak produced its first digital camera although the company chose to stubbornly stick to the manufacture of traditional film and camera (Kong, 2014). As the company kept its focus on manufacturing technology and invention, it slowly forgot to concentrate on customer demands. This meant that despite focussing on technology implementation and invention, the company did not gain competitiveness and productivity. Missing a marketing opportunity, especially for its digital camera led to Kodak being overtaken by other companies, such as Fujifilm, Nikon and Canon. Fujifilm, also known as Fuji Photo Film Company Limited, is a well-known producer and marketer of information and imaging products. The company was established in Japan in 1934. The company began its operations by producing black and white photo film. In 1948, the company produced its first colour film and in 1960, it began manufacturing products made of magnetic tape (Peres, 2013). In terms of establishing operations outside Japan, Fujifilm’s first overseas company was in Brazil. Peres (2013) points out that “initially built to produce photographic colour paper, the plant manufactured photographic colour film and processing chemicals as well” (n.p.).The other plants to be established were in Netherlands and Germany in 1984 and in the United States in 1989 (Peres, 2013). The company also has operations in Singapore, Canada and Belgium. Unlike Kodak, Fujifilm gave priority to customer demands. The company is very keen in adapting and respecting local cultures, as well as understanding the characteristics of the different world regions. Fujifilm has made many technological breakthroughs in the manufacture of imaging products. As a result of this, it has won numerous awards and received many citations. Comparison and contrast each company’s approach to management in order to embrace innovation Taking the lead as the leading manufacturer of digital camera, Kodak concentrated majorly on the market of digital imaging, by installing printing kiosks worldwide and launching its photo service online. To fund its transition, Kodak went into the market of ink jet printers and making move into the health business. Kodak’s management approach has made it a consumer product with a solid technological base. Fujifilm had taken up a different approach to undertake and manage innovation. To its consumers the company offered digital cameras and print services. The company slowly ventured into other connected markets. Fujifilm had a different aim aside from satisfying its consumer’s market needs. The company looked for any possibilities of new innovative executions for their already existing technology. Both companies joint ventures and strategic alliances gave them advancement in their management strategies. Management differences and how they have impacted the relative success of the companies Fujifilm couldn’t maintain its revenue if it only focused on imaging and photography. Technologically, the company passed divers resources and they looked for ways to turn them into businesses. The photographic film contained a hundred kinds of chemicals. The company applied it expertise in handling chemicals and engineering to develop films used in LCD panels for electronic devices like televisions and computers. Kodak on the other hand, had a different portfolio. The company invested in ink jet printers. The company also had a line of products which included image scanners and document management system. Kodak developed award winning high tech ink jet printers that were able to imprint. Ethic and social responsibility and the impact to each company’s profitability Over the years, Kodak has maintained value ethics and corporate social responsibility. The company has made donations to Toronto and Ryerson University. It also extensively donated historical photographic material to various universities. By so doing, the company marketed its name throughout the U.S. When Fujifilm Company entered into the United States market, it observed ethic and social corporate social responsibility, which gave it a positive public image. The company also sponsored an Olympic tournament in Los Angeles that was to be sponsored by Kodak. This gave Fujifilm recognition in the U.S. and increased its market share. The extent to which management of both companies adapted to changing market conditions For years, Kodak had dominated the photographic and imaging sector. The company accounted to over half of the market in the United States. Thereafter came Smartphone’s to replace cameras, and digital photography to replace films. As Lenskyj and Wagg explain, the company needed to reassess its marketing strategies and to adapt to the changing market (2012). Kodak had over a hundred thousand workers and after making losses, it had nearly a tenth of its workers. Kodak also opted to venture into pharmaceuticals due to its good expertise in handling chemicals to make drugs. This was to raise more capital to aid the company in shifting to digital. Fujifilm had a successful diversification. The company sought out to venture into new outlets for its expertise. In the same way photos fade due to oxidation, the cosmetic industry made people think that would be preserved with an anti-oxidant. The company launched a line of cosmetics which sell in the Asian market. The company also invested heavily in finding new outlets for its wide range of products, like the LCD panels which paid out well. Fujifilm prospered by changing its focus which helped it transform from a fairly imaging company, to a diverse company in electronics and health care (Hout, 2013). Recommendations to allow flexibility to back up both companies decision making processes to adapt to changing market conditions 1. The biggest blunder Kodak made was to focus more on the quality of its product, rather than advancing it. The company should have been less confident about its brand and find ways of making a difference in what it markets. Too much confidence in Kodak Company led it to believe that the incoming Fujifilm could not take out a big brand name like Kodak in the U.S. and thinking that the people will be patriotic to its brand, but the market change slummed out Kodak’s brands. Kodak needs to always place focus on advancing its products and not too much on quality. 2. Kodak also had a problem in acting on a drastic situation; the company acted like it was resistant to Japanese technology, while Fujifilm became flexible. This was because the management of Kodak Company was dozing off in their chairs not wanting to take up the challenge as Fujifilm took drastic action to changes in market. Kodak should always have a management division that stays on toes to enable it to move with the changes in market conditions. 3. Kodak had another problem of buying readymade businesses. The company should have taken time and expenses to develop its own home built technologies. The company then failed to diversify more as it aimed to be a digital company. Kodak should have known better that a company that concentrates on out-dated products is a limited way to do business and outdo companies that embrace new technologies. The company should have looked for ways to put its expertise to better use and to create a new chain of brands to fetch more revenue for the company, and this would have helped the company raise more funds to transform to digital. Conclusion Unlike people, companies can live forever in theory. The difference comes in when some companies die young. This is because the corporate world, which is different from the society at large, is a fight to death. Fujifilm had mastered the art of survival together with new tactics to outdo other companies in the imaging sector. Film profits in Fujifilm went from over fifty per cent of its income to basically nothing, but the company found new foundations to source out revenue. Dominant firms have been killed by smaller shocks. Kodak’s misfortune could have been avoided by adapting to the modern technologies. The company could also have started a new business with a different supply chain, rather than continuing drowning in debts. Many companies along with Kodak seem to have run out of course. The companies are now poised like old photos waiting to fade away. Reference List Corporate History. (n.d.). Retrieved July 24, 2014, from http://www.fujifilm.com/about/history/corporate_history/ Hout, Sam. (2013). Survival to Growth. New York: Palgrave Macmillan. Kong, A. (Eds.). (2014). International Conference on Management and Engineering (CME 2014). Lancaster: DEStech Publications, Inc. Lenskyj, ‎H. J. & Wagg, S. (2012). The Palgrave Handbook of Olympic Studies. Macmillan: Palgrave Macmillan. Peres, M. R. (Eds.). (2013). The Focal Encyclopedia of Photography. Burlington: Focal Press. Pham-Gia, K. (2008). Case Study: Kodak at a Crossroads - The Transition from Film-based to Digital Photography. Munich: GRIN Publishing. Slide, A. (2013). The New Historical Dictionary of the American Film Industry. New York: Routledge. Read More