Kodak and Fujifilm

December 27, 2021

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History and Business

Kodak is an American company, which offers imaging solutions and innovations for business. Today the company’s most common services include functional printing, packaging, graphic communications and other professional services.

The company was established in 1889. Preliminary, its activities were directed on offering production, mostly cameras, paper, films and chemicals, on low prices. Kodak was the strongest and the only company, which presented such services in the USA till 1980s, when Fujifilm with its production came to this country. Kodak lost sponsorship competition to Fujifilm for Los Angeles Olympics in 1984. Management intended to improve the company’s competitive position, and in 1990s, presented the company’s production in Japan. However, these intends were not successful, and in 1995, the company made a petition to the World Trade Organization against Fuji and its unfair competition on the film market in Asia. In 1998, this petition was rejected. Kodak continued to lose its market positions in the USA and all over the world, because other competitors presented more improved production on lower prices. In 1990s, the company intended to develop digit technologies. However, such intends were very weak and uncompetitive compared to other companies, which already presented digital technologies, like Sony. The company tried to improve the situation and presented its new line – EasyShare. This technology enabled easy share of films and photos via PCs and new technology of watching photos by rolling out. In that time, Kodak made tremendous market research, studied needs and wishes of the customers. However, while improvement its cameras, the company did not pay any attention to its film production. Additionally, in several years, Kodak lost part of its customers, because Asian competitors presented more innovative production on lower prices.

Managers decided to change the company’s strategy and made investments into high margin printer ink. So, company’s printers remained to be expensive, but prices of necessary ink were reduced. Among other directions of the company were packaging, workflow software and photograph printers. The 2010-2013 years were the hardest for the company. Kodak became almost a bankrupt. It presented its new production for imaging of business for emerging from bankruptcy. At the present time, company’s main directions are entertainment, commercial films, digital printing, enterprise and graphics.

The segment of commercial films, graphics and entertainment is presented by plates, prepress equipment, media, chemistry and concerned services, digital controllers and workflow software, entertainment imaging services and product, industrial and aerial film production as well as films for printed circuit boards.

Enterprise and digital segment is presented by media, software, and hardware, such as color and black-and-white electro photographic printing equipment, commercial inkjet equipment and technology, packing printing production, printed materials and solutions, media and ink consumables (Profile, 2013).

Additionally, the company has more than 7,500 active commercial imaging patents. These patents create and support interaction with other companies, development of new production and company’s expanding on new markets (Our Company, n.d.).

The closest and the strongest Kodak’s competitor is Fujifilm Corporation. The Japanese company offers photography, imaging production and services, such as creation and support of color photographic films and related equipment, digital cameras, photofinishing chemicals, color paper, equipment necessary for medical imaging, various flat panel displays, photocopiers and printers, optical devices and equipment necessary for graphic arts.

Fujifilm was created in 1934 as a producer of motion-picture, photographic and X-ray films. During the next decade, the company directed its actions on optics and lenses. After the World War II, the company offered production for medical purposes (X-ray), for electronic imaging, printing and some magnetic materials. In 1970s, separate department Fuji Xerox was created. Beginning from the 1950s, the company presented its production (mostly medical, printed and photo related) in various countries, and, at the same time, became a monopolist camera manufacturer in Japan. In 1990s, Fujifilm expanded American market since it became a sponsor for 1984 Los Angeles Olympic Games, and offered cheap production and opened a factory in the USA. At the same time, the company took steps to increase competition in Japan from the side of Kodak and even received support in WTO in Kodak’s suit. Digital cameras became very popular in the 21st century, and the company transformed on manufacturing digital cameras. In 2006, Fujifilm became a holding company that consists on such subsidiaries as Fujifilm Corporation, Fujifilm Xerox Co., Toyama Chemical Co., and shared services company Fujifilm Business Expert Corporation (Group companies, n.d.).

Fujifilm Corporation presented production in the Imaging Solution, such as digital cameras, color films, color paper, chemicals and products of photofinishing; and the Information Solutions business, such as necessary equipment and materials for life science and medical diagnostics, for graphic arts and flat panel display, electronics and recording media.

Fuji Xerox Co. creates and manufactures Document Solutions production, such as office manufacture devices, printers and copy machines, and paper.

Toyama Chemical Co. creates medicine production, such as antibacterial agents, anti-influenza agent, synthetic penicillin agent, etc.

Fujifilm Business Expert Corporation provides additional services for the Group companies, such as insurance, administrative, human resources, etc.

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Comparison of the Approach to Management Concerning Innovations

Kodak and Fujifilm have similar and constant directions considering innovation process. Both companies understood that creation and manufacturing of digital cameras would be interesting to clients and would lead to success. Managers of both companies planned inception of digital production into the market. They performed researches of customer’s needs and wishes, organized cooperation between various organizational departments and units (manufacturing and promotion), and developed strategies of leading its production. Both companies presented cheap cameras to its customers and tried to reduce cost of other production, like ink.

Fujifilm implemented a policy of diversification. However, Kodak started active implementation later than Fujifilm. Managers of Fujifilm understood that diversification will make the company stronger and less susceptive to changes on the market earlier than Kodak’s managers.

Fujifilm is more successful, because this company directed its activities on offering innovation approach on various popular and high-cost fields, such as cameras, medicine equipment and business support. Fujifilm developed these directions during several decades. Kodak, in recent years, created innovations only in business fields and on deposition and material science, such as biochemistry, biofuels, solar panels, etc. It should be noted, that these new Kodak’s directions are already developing by other companies. So, Kodak could not just stand against new competitors.

Also, Fujifilm introduced innovation quicker than Kodak and was more accommodative to changeable market conditions. People are always searching for something new. So, managers of Fujifilm tried to meet this demand and the company offered larger amount of new production. New production of Fujifilm is cheaper and has a good quality.

Other Management Differences which Lead to Success

Kodak was rather successful company in the USA before Fujifilm came to this country. Kodak did not stand against competition. The company tried to expand Japanese market, but it was rather weak and, consequently, lost competition. However, the policy of the company has some strong sides, such as direct contact with retailers and distributors, and intends to expand overseas markets outside the USA.

Also, the company has a lot of patents, which enables interaction with other companies in various market segments and possible future development. Such approach of interaction creates background for future development and provides ability to change presented production. It is some kind of emergency way that may be useful in case of future challenges.

Fujifilm is much more successful. The company analysis involves evaluation of the current market situation, possible risks and ways of their avoidance by implementation of risk management strategy.

The company tries to adapt to changeable market and to meet crisis, which arise after worldwide recession in 2008. Fujifilm adopted new medium-term management plan VISION80 that include such strategies as precise cost reduction and restructuring to improve profits. Such management strategy shows that the company can adapt to current economic situation and make all necessary efforts to reduce negative consequences of decreasing customer’s demand, which could happen in case of recession.

At the same time, the company continues to expand new markets by offering high quality production on low prices. Fujifilm actively presents its production in such countries like Russia, Turkey, China, India, Vietnam, Indonesia, Brazil and countries of the Middle East. Managers explore market opportunities in these countries, analyze customers’ demands and establish overseas subsidiaries. They determine tasks and measurements necessary for every country to develop and present production, which meet local needs and try to capture market share in these countries. In fact, special trainings for local employees are established together with increasing of amount of workers. Globalization became one of the main directions of Fujifilm.

Fujifilm continues to increase and improve its healthcare direction, material business and document solution business. The company continued its diversification and improvement on fields, which have significant scale and growth potential. These lead to presenting new production to customers and meeting all their demands and staying competitive on the market.

Ethics and Social Responsibility

Kodak is social oriented ethical company. Its main values are respect for the dignity of the individual, trust, integrity, credibility, personal renewal, continuous improvement, recognition and celebration. Kodak pays much attention to relations with customers, workers and stakeholders. Such policy enables respect to all parties. It should be noted that the company supports employee’s safety, their families and various educational organizations. Workers understand that the company takes care about them and protects their interests. So, they try to perform their tasks in the best possible manner.

Among the other aspects of the company’s social policy are presenting quality production that will meet all demands of customers together with tracking of customer’s attitude and satisfaction. Customers understand that the company wants to satisfy all their expectations. Such approach attracts people to Kodak’s production.

Kodak performs its activities in accordance with all applicable laws, and makes periodical reports to its investors. Such policy of complete accounting shows company’s honesty, accuracy and accountability. These attract new investors and create strong relationships between stakeholders and Kodak.

Ethical and social policy of Fujifilm has some similarities and differences compared to Kodak’s policy. According to Joseph C. Wilson, Chief Executive Officer, “Xerox is made up of a group of enthusiastic, revolutionary people. They believe not only in profit or success in business, but also in the responsibility to provide services that have value for the customers. They want to serve society, and that service will become a source of self-respect” (Ethics and compliance, n.d.). The company also tries to provide its customers high quality production and creates special educational programs to its employees. Fujifilm meets all concerning laws and regulations. However, it pays more attention to protection and safeguarding human rights, such as prohibition of discrimination and harassment, protection privacy and enabling safety, etc. Fujifilm not just develop ethical and social regulations, it creates strong mechanism of observation and control of implementation and fulfillment of company’s policy in the form of ethics compliance committees. It enables effective and efficient performing of company’s regulations, analysis of the current situation and making changes, if necessary. Such methodology of observation will enable quick adaptation to any new requirements.

Adaptation to Changed Market Condition

Managers of Kodak are weak in adaptation to any changes on the market. They do not timely develop new effective and efficient approaches, pay less attention to diversification of company’s production and to company’s competitors. So, the company cannot quickly adapt to any considerable changes on the market. Managers do not clearly understand current needs of customers, such as a necessity of constant innovations on lowest prices, as it was when the company lost its position in the USA. While its competitors (Sony, Canon and Fujifilm) made considerable investments into developing digital cameras, Kodak directed its activity on Advanced Photo System and on 35mm film. At the same time, when Kodak had invented the digital camera technology in the 1970’s, it did not present it because of opinion that this would kill film direction. Through its history, instead of creating particularly new approaches, the company improved existing production. Continuous improvement is good, but not enough for remaining competitive and growing company. Kodak has a great potential, which is reflected in well-known reputation and a huge amount of active commercial imaging patents; however, it prefers to develop other directions, such as deposition and material science.

Fujifilm has much more successful management. The company understands the necessity of constant innovations and continuous development of most profitable directions, such as medicine. It gets used to changeable market conditions and developed a new strategy on response of world recession. Also, management pays attention to the company’s globalization, and expanded to new countries all over the world. Fujifilm has strong mechanism of implementation of innovations and observation of inward and outward processes. It can perform more accurate analysis of the current market situation and future trends and develop more effective and efficient strategy.

Recommendations

Kodak has a lot of weak sides. The company should not ignore its competitors and their strategy. The company would not lose the USA and Japanese markets if it decreased prices and presented innovations to its customers.

The company is not adaptable to changeable market condition. Kodak prefers to modernize existing production instead of creating new one. This strategy should be changed in the opposite manner. Kodak’s managers should continuously collect information about customers’ needs, analyze it and develop new approaches.

Also, Kodak should respond to world globalization and present its production all over the world; as well as develop new strategies responding on existing world challenges (such as recession).

Fujifilm creates a lot of new production. However, it has to focus on long term growth in order not just to create innovation, but to support and improve it. This would create strong background in the changeable market conditions.

Also, the company should strengthen interaction between its subdivisions, because only joint actions will make the company competitive.

The company should not just directed on new countries, but strengthen its position in Asian market in order to remain competitive.