Kodak and Fujifilm - Case Study Example

Kodak and Fujifilm History and Core Business Fujifilm was founded in 1934 with its main headquarters in Tokyo main of Japan. The firm was later named as Fujifilm Holdings Corporation. The first production done by the company after its inception was production of photographic films, which were use mainly in cinemas and medical purposes. The company has grown since its commencement and it provides various services and production of different digital cameras. Currently, Fujifilm Holding Corporate provides various services including photography and imaging. Other services done by the corporation are production and sale of digital cameras, servicing of cameras, production and sale of printers and photocopiers, photofinishing chemicals and imaging equipment mainly used for medical purposes. Fujifilm has grown since its foundation in 1934; they started manufacturing and sale of cameras in 1948. Fujifilm extended their business to New York in 1965 it was later followed by other base station of Fujifilm business in Netherlands. Fujifilm expanded where introducing new products in the market. The innovation and expansion of the company led to fall of it rival Kodak. This was noted in of the event in Los Angeles, Olympic Games whereby Fujifilm won the sponsorship in 1984. The company moved forward to setup a factory for production of Films in USA (Fuji Photo Film Co., Ltd., 1997). Kodak was started by Eastman George’s company known as Eastman Kodak Company in 1889, with its main objectives as production of photographic and imaging products and services. Kodak started with production of the first camera called Kodak. The start of the company helped in replacement of wet-plate process in which most photographers were using in order to obtain a photograph. The glass plate process replaced the wet-plate process but later the company introduced paper film. Innovation and production of different cameras went on and this led to capture of large market share by the company in 20 century. Brownie Family Camera is one of the products, which replaced the expensive Kodak cameras. Later in 1950, Kodak was the first company to come up with photographic films capable of producing coloured pictures. With all this, the company achieved high growth in 20 century and reaches sales of 1 billion dollars (Albarran, 2013). Kodak has done a lot to keep its market share despite high competition it is facing. Kodak established Kodak shops in most parts of the world. The company also made used of online technology by Kodak Gallery whereby customers can get photo services. Additionally, Kodak was the first company to manufacture and sale digital cameras. Kodak Company first made printers such as coloured Inkjet printers. Kodak has done a lot to beat his competitor Fujifilm Company. High competition in USA forced the company to expand its production and capture of market share in Japan. Kodak entered Japan market in 1905 but serious competition and expansion of Kodak started in 1980 in Japan (Hitt et al, 2008). 2. Approach To Management Kodak was the first company to go digital before other companies such as Sony, Samsung and Cannon. Digital camera production by Kodak Company was started before 1980 and the company went on to manufacture different camera products which had digital technology. Additionally, cameras were fitted with internal storage system. The focus of Kodak Company was digital technology, health imaging and products for printing. Because of this, the company has been leading in production of digital imaging and printing film papers such as silver halide. The company established various shops known as Kodak kiosk in various cities. They also when further to establish online shop for photos known Gallery (Peng, 2012). The start of Fujifilm in 1934 was first met with losses, increasing debts and poor quality products. This mainly because of high prices of the products the company was using. However, the company did invest on the quality of the products in order to capture the customers’ attention. This proved much better because customers were ready to get products, which were long lasting. Additionally, customers were ready to spend on materials that cannot easily loss image. Furthermore, the company adopted changes in technology such as shift from film products to digital cameras because they understood that film products were no longer used. The two companies seem to have adopted the same technology of digital after realization that film products were no longer embraced by customers (Albarran, 2013). 3. Management Differences Change to digital technology reduced market share of Kodak. Kodak used to enjoy close to 90 percent of market share in 20 century. However, its market share was reduced drastically by introduction of digital products by companies such as Sony, Cannon and Samsung. Before entrance of digital products into market, film products made by Kodak Company were unique and could not be easily imitated. Additionally, they employed large number of suppliers and marketers. This made it easy for their products to be distributed to any part of the world faster. However, entrance of other companies to market with digital technology reduced market share for Kodak. Kodak was the initial company to develop digital cameras, with the first one being made in 1975. However, marketing strategy for digital products by Kodak was done later. This failed the company’s strength of saving its market share. Marketing of digital cameras of Kodak Company was done in 21st century after other companies such as Samsung and Sony had already covered larger market share (Peng, 2012). Kodak Company did not expect the drop of film usage by consumers and adoption of digital technology. Peng (2012) explains that Kodak Company did not struggle to adopt the change in technology as other firms were doing but all they did was to shift the focus to its rivals. In 20th century, Kodak main rival was Fujifilm, Kodak Company was the best in making and provision of film products. Because of competition they were facing and plan to retain its market share, they decide not to outsource their products to Fujifilm. The year 2000 was the time Kodak Company started marketing digital camera. The company did not achieve much since other companies had already launched theirs. Additionally, the introduction on camera phones ate market share of Kodak because consumers preferred phone with camera rather than digital camera. Fujifilm set up business in big cities like New York City, they also got opportunity to sponsor los Angeles Olympic games. This gave Fujifilm chance to been seen by customers and also opportunity to stick to US market. They also opened other bases in US and started offering film products to customers at cheaper prices as compared to its rival Kodak. With lower prices as compared to Kodak, Fujifilm gained market share by 10 percent. Fujifilm market share in US was 10 percent at the end of 1990 but they increased to 20 percent after marketing and setting up of business centres. Because of change of technology and adoption of digital products Fujifilm focused on other opportunities such as manufacture of LCD screens and cosmetics. The company also spend close to $9 billion to merge with other companies. This reduced the cost of doing business because of merging with other companies. Additionally, because of the longer period the company was in the market and high experience of making film products, the company changed production of cosmetic and LCD screens. The strategy used by Fujifilm was that skin and photos contain a product call collagen. Additionally, photos lose their colour because of oxidation therefore they require anti-oxidants. Anti-oxidants could also be used to preserve skin. This research was a start of successful sales of cosmetic products across Europe and Asia by Fujifilm Company (Albarran 2013). 4. Ethics and Social Responsibility Fujifilm recognises ethical and social responsibilities, because of this they have been making and manufacturing products that are good for environment. Additionally, the qualities of the products made by the company are of high standards and they match with the price paid by customers. This can be evidenced from the start of the company whereby they did a research on the quality of the product in order to gain trust from the clients. The company also considers environmental preservation. Fujifilm produces disposable camera, such cameras degrade environment when disposed. Fujifilm started initiative whereby such products can be recycled so as to protect environment. Impact of ethical and social responsibility is evident in Fujifilm Company, research on production and provision of high quality products has increase profitability of the company therefore making it to expand to other countries since its inception (Ferrell 2004). Kodak Company recognises ethical and social responsibilities. The company also launched recycling initiative for environmental protection. Kodak manufactures recyclable products hence environment can be safe from company’s products. The company has also been giving information mainly historical information to Universities in United States relating to photography. Additionally, the company states that their suppliers maintain ethical and social responsibilities standards. The supplier passes down the ethical and social responsibilities standards down to others. Some of this social and responsibilities standards maintained by the firm are applied so as to provide customers with quality products and to safeguard environment. However, Kodak Company has been accused by environmentalist for damping chemicals to environment, which has affected the company’s reputation (Pride and Ferrell 2004). 5. Management Due To Changing Market Conditions Both companies recognised changes in the market brought by change of technology. Customers moved to digital technology leaving behind the traditional photographic products. This led to fall on the demand photographic products. Fujifilm saw this and started and started investing on digital cameras. They also diversified their business by dealing with other products such as cosmetics as stated earlier on this paper. Kodak on other hand was not left behind; the Company was the first to make digital cameras. However, because of the fall in demand for photographic products, the company made use of the online technology. They launched online services whereby customers could print their photos sent online on Kodak business centres. Though Kodak Company saw the shift of customers to digital technology, they did not react first to launch their digital cameras despite being the first company to manufacture them (Peng 2012). 6. Recommendation To Changing Market Conditions The two companies should consider using the following strategies so as to adapt to changing market. They should conduct research on customers’ needs so as to diversify their business. Secondly, the companies should merge with other companies so as to outsource resources needed to manufacture products needed by customers based on the research. Lastly they should be first to adapt to changes in the market and utilize the available revenue to make transformations and meet customer expectation hence maintaining loyal clientele. References Albarran, A. B. (2013). Media Management and Economics Research in a Transmedia Environment, USA: Routledge. Hitt, M., Ireland, R. D. and Hoskisson, R. (2008). Strategic Management: Competitiveness and Globalization, Concepts. Belmont: Cengage Learning. Fuji Photo Film Co., Ltd. (1997). International Directory of Company Histories, Vol. 18. St. James Press, Retrieved from < http://www.fundinguniverse.com/company-histories/fuji-photo-film-co-ltd-history/> Peng, M. (2013), Global Business. Belmont: Cengage Learning. Pride, W. and Ferrell, O. C. (2004). Marketing, Belmont: Cengage Learning. Read More