Kodak and Fujifilm

Kodak and Fujifilm Kodak and Fujifilm are well known companies in the households in the United States and across the world. Few people know the actual history of both companies and the competition they have been in over the years. It’s an interesting history on how both companies started and how they have developed and challenged each other over the years. George Eastman, who was the founder of Kodak, started his business career as a 14-year old boy when he had to quit school and work to support his mother and two sisters. Mr.
Eastman had a gift for organization and management while his lively and inventive mind made him a successful entrepreneur by his mid-twenties. What sparked the idea of a simple camera was that his coworker suggested he make a record of his vacation to Santo Domingo. As a result, he became absorbed with photography and wanting to simplify the photography process. Eastman started Kodak in 1880 and built it on four basic principles: mass production at low cost, international distribution, extensive advertising, and a focus on the customer.
Later on he added the following policies: foster growth and development through continuing research, treat employees in a fair, self-respecting way, and reinvest profits to build and extend the business. Mr. Eastman started the company by manufacturing dry plates for sale to photographers. One mishap almost shut down the company when dry plates that were sold went bad. Eastman came up with a quick solution to recall the bad plates and replace them with a good product. His quick thinking saved the company and the company’s reputation.

Mr. Eastman began experiments that focused on the use of a lighter and more flexible support than glass. He began advertising to the public to look out for a new product that will prove an economical and convenient substitute for glass dry plates for outdoors and studio work. Once he started perfecting the transparent roll film and the roll holder, Eastman realized he would have to reach out to the general public and amateur photography. The Kodak camera debuted in 1888. They developed the slogan “you press the button, we do the rest. Kodak made the process of taking and developing pictures easy and accessible to nearly everyone. Kodak has led the way with a plentitude of new products and processes that makes photography simpler, more useful and enjoyable. The company Kodak has grown to be is known not only for photography but also for images used in leisure, commercial, entertainment and scientific applications. They are constantly developing technology to combine images and information which is creating the potential to greatly change how businesses and people communicate.
Eastman’s goal was to make photography “as convenient as the pencil” while Kodak is continuing to expand the ways images touch people’s lives. Kodak continues to rank as a premier multinational corporation and with a brand that is recognized in nearly every country. Kodak has been involved in technological innovation throughout the motion picture industry as well as the health imaging industry, document imaging, printing and publishing, and space exploration. Mr. Eastman believed employees should have more than good wages. He believed that worker’s goodwill and loyalty contributed to the prosperity of an organization.
Eastman started the “Wage Dividend” in which each employee benefited from the yearly dividend on the company stock above his or her wages. The wage dividends represented a large part of the company’s net earnings; the wage dividends were viewed as an innovation. To show even more appreciation to his employees, Eastman gave one-third of his own holdings of company stock to his employees. He also provided them with a retirement annuity, life insurance and disability benefit plans. (History of Kodak) Fujifilm was established in 1934 in Japan.
Fujifilm has established itself as a leader in in the motion picture photography, videotape, audio tape and floppy disc industries. The company is also involved in still cameras, camcorders, photofinishing equipment, paper and chemicals, imaging and information products for office and medical use markets. The company first started out producing motion picture film, dry plates and photographic paper. It was hard to develop brand recognition at first partly because of the competition with Eastman Kodak. Because of this, Fujifilm focused on improving the quality of the products it developed.
Since the company was focused on the quality of the products, it developed its first film product and a motion picture negative film which proved to many in Japan that Fujifilm was technically proficient in the motion-picture industry. After World War II, Fuji was able to begin exporting film and optical products to South America and Asia. The postwar boom was a great advantage to Fuji with the demands for new products to be developed. One downfall for Eastman Kodak but an advantage to Fuji was when Kodak agreed to let Fuji produce black and white amateur roll film during 1952 and three more black and white roll film products by 1958.
The company became the number one manufacturer of consumer films in Japan. Because of the agreement with Kodak this opened doors for Fuji and they were able to make more export agreements and opened sales offices in other countries, including the United States. (Photography Type – The History of Fujifilm, Part I, 2010) Fujifilm still had to overcome two major challenges: Eastman Kodak and Fujifilm’s reputation for below-par film product. Fuji tackled the challenge of film product and developed film and paper that was compatible with the processing systems mostly used worldwide.
In 1969 all of their films, photo paper and chemicals completely matched the processing systems. They saw a significant upsurge in their exports. The other challenge was going head to head with Kodak which they took on full-force. When Fuji entered the US market, it introduced a cartridge-film eight-millimeter home movie system. Kodak retaliated with introducing their system which swept Fuji aside and took control of the world market. The market started to notice that Fuji’s film was faster than Kodak’s and produced warmer tones.
Fuji advertised making sure amateurs and professionals knew the difference while Kodak continued to concentrate on the beginner/amateur consumers. In 1972, Fuji marketed a film in the US with their name on it. Fuji gained its first significant market share with this product. To try and stay ahead of Kodak, Fuji had to develop, manufacture and market equivalent products quickly before Kodak released new products. By 1980, Fuji was the third largest film producer and stayed competitive by increasing its prices a lot less than the other manufactures.
The also took advantage of the growing consumer demand for audio and videotapes. Their early marketing to amateur and professionals paid off since many amateurs wanted to shoot pictures with high quality film. This boosted Fuji’s status to the second largest film manufacturer. A major advantage Fuji had was researching electronic technology before Kodak. Fuji beat Kodak out for a 1984 Olympics sponsorship which was a huge breakthrough for Fuji. Fuji also took full advantage of the untapped market of disposable cameras. They sold 1. million cameras in 6 months which took them to the top as the number one global camera manufacturer in 1992. Fuji introduced the first digital camera in 1988 which was a historical moment in the camera industry. Fuji has been an innovative competitor since the start of the company. (Photography Type – The History of Fujifilm, Part II, 2010) Kodak failed to grasp the importance of the complex environmental changes that were occurring in the industry. They didn’t react fast enough to stay as the leading company in the industry and Fujifilm took advantage of that.
While Kodak had the technological skills to develop products, their rigid leadership culture prevented them from adapting with the changes taking place. Kodak had the “mentality of perfect products, rather than the high-tech mindset of make it, launch it, fix it. ” Fujifilm embraced the changes that were occurring in the photographic market. They diversified through acquisition and changed its business model to conquer digital photography with a commitment to innovation and new technologies. Fuji showed a technological discontinuity by developing the first digital camera.
This shows they are innovative and creative in their thinking and think ahead of what is happening in the industry. (Integrated Company Analysis, 2009) One major management concept that has impacted both Fuji and Kodak are their marketing strategies. While Kodak was focused on marketing to amateur photographers, Fuji took it a step beyond and focused on amateurs and professionals. This has had a huge impact on both companies. Kodak is focused on positioning itself as providing user-friendly products while the quality of some of their products contradict that claim.
This has kept Kodak from advancing as they should have while Fuji has seen a huge benefit from their marketing strategy. I view Fujifilm as a prospector since they think outside of the box and look at what is needed in the future. Kodak started out originally as a prospector but has turned to be a reactor. Kodak is at the point where they are developing products in response to products being released from their competitors, mainly Fujifilm. I believe that Kodak needs to look at their current situation and assess what they need to do to become more profitable again and rebuild their reputation.
I can see Kodak using the retrenchment strategy for the redevelopment of the company. One action that leaves it questionable about Fujifilm’s ethical approach is when Kodak filed a complaint with the United States that Fuji was blocking their products from entering the Japanese market. Looking at the situation, it could be the Japanese government that had the ethical and social responsibility for these actions. The blocking of Kodak entering the Japanese market maintained the Fujifilm’s profits while it stopped potential revenue for Kodak.
Even if the Japanese government would let Kodak sell its products in Japan, the Japanese citizens would most likely still purchase Fujifilm since that is the product that they recognize and are familiar with. Kodak over the years has slowed down it’s adaptation to the market condition changes. When Mr. Eastman was in charge, the business stayed ahead of the industry and adapted well. As the years have gone by that situation has changed to where Kodak reacts after changes have been made. Their reactions are to produce a product so fast that it makes inferior products, which has affected Kodak’s reputation in the industry.
Fujifilm adapts well to the change in the market conditions. In fact, they are in the forefront of anticipating what is needed next by the consumers. One way a company should build in flexibility is to have openness. Company executives need to be open to new ideas, information sources, and roles. Typically companies stick with the routine processes and don’t consider ideas that may be suggested by people and other sources outside of the company. Some companies are not receptive to ideas that are internally suggested by their own employees either.
In order to prosper and advance, company executives need to be able and willing to take ideas and suggestions into consideration. Another way to build in flexibility is the processes of decision making. Companies need to analyze how and if their decision process works. They need re-examine the assumptions that bring the decision to a given point. Executives also should refine their plans according with the brief feedback they receive. Companies have to be careful not to develop a competitive inertia where they are reluctant to change their current strategies because they want to keep their current processes which have been successful so far.
A third way is to develop a shadow strategy task force. Companies need to analyze themselves and determine what their weaknesses are to be able to make adjustments to strengthen them. One way to look at your weaknesses is to think like your competitors and try to determine how the company can be exploited for competitive advantage. The company should have a wide range of employees on the task force to provide opinions, suggestions and information instead of the task force being only executives.
Companies can learn a lot from researching Kodak and Fujifilm’s history. Their history shows how strong companies can be and the bumps in the road they encounter by not adapting to change and competition. There is definitely a lesson in what to do and what not to do as you are building your company and making it stronger throughout the years. References: 1. History of Kodak. Retrieved November 5, 2012, from http://www. kodak. com/ek/US/en/Our_Company/History_of_Kodak/Imaging-_the_basics. htm 2. Photography Type – The History of Fujifilm, Part I (2010).
Retrieved November 5, 2012, from http://www. photographytalk. com/photography-articles/1682-photography-tipthe-history-of-fujifilm-part-1 3. Photography Type – The History of Fujifilm, Part II (2010). Retrieved November 5, 2012, from http://www. photographytalk. com/photography-articles/1686-photography-tipthe-history-of-fujifilm-part-2 4. Integrated Company Analysis – Kodak. Fall 2009. Wisconsin School of Business. Retrieved from http://business. library. wisc. edu/resources/kavajecz/09%20Fall/kodak_rep. pdf

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