BUS 302 – History, Business Approaches, Management, And Marketing of Eastman Kodak and Fujifilm
Access articles about the history, business approaches, management, and marketing of Eastman Kodak and Fujifilm. Eastman Kodak has been a developer and pioneer of photographic films for over 130 years. Although it invented the digital camera, the company was unprepared for the rapid changes in new technologies and filed for bankruptcy protection in January 2012. Fujifilm, a Japanese competitor, on the other hand, has been successful in the U.S. and global markets.
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History and Core Business of Eastman Kodak and Fujifilm
Both Fujifilm and Eastman Kodak are renowned brands not only in the United States but all over the world. Eastman Kodak was founded in 1881 and was known as Eastman Dry Plate Company. Its headquarters are in Rochester, New York. Its founder, George Eastman, was among the first people in photography to demonstrate the difference between gelatin dry plate from a wet plate that was until then, widely used in photography. It was until 1888 that the company changed its name to Kodak. As elucidated by Inagaki & Osawa (2012), Kodak rebranded all its products and it then sold the first camera to the general public with a new name.
Owing to the changing nature of photography and technology, Kodak demonstrated innovative and creative strategies that would keep the company afloat (Hill et al., 2014). The company came up with easier ways of film development and production, designed and developed printers and cameras. Apparently, Kodak also ventured into health sector by developing imaging units especially at the dawn of digital age. Although the company was able to remain profitable throughout the 20th century, increase in competition, advancement in photography technology and inability to maintain healthy financial performance brought the company to its knees in 2012. In fact, many people saw the company as bankrupt. In order to avoid closing its doors, Kodak sold majority of its product lines especially graphic patented prints (Inagaki & Osawa, 2012). It also embarked on a rigorous process of changing internal processes and leadership. Among the changes that were apparent, elimination of cameras and shifting the company’s focus to mature and commercial market. Although the changes and transition that took effect alienated the company from the market it had commanded for so long, Kodak was able to leave bankruptcy and remain within the profitable margins.
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On the other hand, Fujifilm Holdings is a Japanese company that was founded in 1934 (Hill et al., 2014). The company produced photographic films and was initially controlled by the government as a parastatal. Since its inception into the market the company experienced unprecedented growth that also spurred growth in technology. Over the years, Fujifilm ventured into both consumer and commercial markets. Its product line included photography, printing machines, health imaging films and other data storage devices. Despite the wide range of the products the company specialized in, photography was the most profitable and the company had a firm hold on the sector. In 2014, the company celebrated its 80th anniversary and takes pride in the fact that it is the ‘world’s largest film and imaging company’ (Hill et al., 2014).
Compare and contrast the approach to management that each company has pursued in order to embrace innovation.
Both Kodak Eastman’s and Fujifilm’s approaches to leadership and management vary significantly. Their approaches also vary in how they adopt technology and innovation. While Kodak Eastman has run down majority of the products in its product line, Fujifilm has gone ahead and maintained almost all of its products and gone beyond film development and photography (Inagaki & Osawa, 2012).
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The focus and interest of Kodak particularly in 21st century has been more on products that are in accordance with customers in material science as well as deposition. The company has also targeted customers in digital imaging sector as it changes strategy from a more consumer product oriented company to a commercial products oriented company. After the threat of bankruptcy in 2012, Clay (2012) posits the company made radical changes that enabled it to reduce increasing losses due to huge costs. Kodak also reduced the number of its products and employees as a remedy to avert the impending closure. For instance, Kodak ran down some of its products including cameras business that targeted the consumers. It also sold its online photo services to other companies (Hill et al., 2014). It is important to mention that the company also sold many of its copyrights and patents associated with its brand including making a settlement agreement with the U.K. companies. In what was described as the U.K. Kodak pension plan, the company made an agreement to spin off some of the personalized imaging as well as document imaging services.
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UK Kodak pension plan became the company’s biggest creditor especially after acquiring the aforementioned patents from Kodak. As such, the company changed its name to Kodak Alaris. According to Inagaki & Osawa (2012), Kodak changed its business strategy radically from expanding to new markets to downsizing. For many people, the move was seen as uninformed and wrong for the company although it has averted the imminent closure that the company faced in the wake of 2012 (Hill et al., 2014). Kodak reduced its size and the product line in order to increase the company’s focus on a more defined and specialized business targets. This also allowed the company to remain afloat amid increasing competition and technological advancements.
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On the contrary, Fujifilm’s innovation and strategies are entirely different from Kodak Eastman. Although the company has made major changes such as deciding to eliminate products related to motion picture films, the company prides itself of other innovative products and immense resources. For instance, the company has widened its interests to skin care products as well as health imaging and medical diagnostic system (Hill et al., 2014). The company has also embraced technology in the sense that it has began to produce touch-sensitive screens for major companies dealing with tablet and smart phone manufacturing. Apparently, Fujifilm innovation has also included biotechnology and production of astronomical lenses used to observe the moon and exploration. This is in addition to graphic systems used in streamlining film production. Fujifilm also has various products that target businesses especially in overcoming issues related to communication and documentation.
Determine what other management differences have impacted the relative success of Kodak and Fujifilm. Provide specific examples to support your response.
There is a significant difference in the in which both Kodak and Fujifilm’s management differences have impacted their successes. Although Kodak adopted a downsizing strategy and depleted major products while at the same time exiting the non core businesses, it is currently adapting to the new environment and concentrating more on major business products and services. In fact, the company’s management has stated categorically that the company is now strong and is expecting to grow. Despite the seemingly downsized company, Kodak still maintains almost 7500 commercial imaging copyrights and images (Hill et al., 2014). This will allow the company to tap into new and emerging markets as well as make partnerships with other companies within the same sector. Its main new markets are built on supplier and vendors as well as the US government that contracts the company for major services. The company also targets institutions of learning such as the universities and small businesses.
The management of Kodak is totally different to that of Fujifilm. Unlike Kodak, Fujifilm’s management was responsible for the development and promotion of growth within the company. This entailed acceleration of global expansion through concentration of the management resources on such sectors as health care and medicine, biotechnology, functional materials, astronomy as well as document solutions. Fujifilm’s management also ensured that they created a plan of increasing sales through rigorous marketing. The plan also ensured that Fujifilm’s products would match the needs of the customers all over the world and specifically the needs of the new markets. This enhanced thee goals of boosting sales and reducing overhead costs were achieved. By the end of fiscal year 2013, the company’s revenues increased by almost 9% following the successful implementation of the plan by the management (Hill et al., 2014).
Evaluate each company’s approach to ethics and social responsibility and the impact those approaches have had on each company’s profitability.
Eastman Kodak has a good public image owing to its rich history of undertaking socially responsible activities. In fact, Inagaki & Osawa (2012) assert that Kodak has been renowned all over the world because of its long history of ensuring that it operates in a socially, ethically and environmentally upright way. Currently, Kodak has embarked on activity aimed at alleviate the working conditions of all suppliers and manufacturers within its major production and distribution systems. Dubbed Electronic Industry Citizenship Coalition (EICC), the coalition aims at addressing such issues as safe working environment and discrimination (Hill & Jones, 2012). The company also intends to set standards that both suppliers and manufacture must meet as a way of safeguarding the plight of workers.
Although the company has been acting within the realms of morality and ethics, bankruptcy has reduced the participation of the company in socially responsible activities. In fact, during the bankruptcy filing, the company had made it clear that they were not considering any act of charity and sponsorship. The poor financial performance has therefore compromised Kodak’s ability to engage the community through donations, sponsorships and etc (Hill et al., 2014).
On the other hand, Fujifilm’s perspective of socially responsible and ethical ways of approaching business differs from that of Kodak. The company has set up standards that all suppliers and manufacturers should meet in an effort to ensure that workers’ plight and dignity remains. The company has also engaged in various acts of philanthropy by sponsoring students, financial research projects in many parts of the world and ensuring that they promote environmental custodianship.
Discuss the extent to which management of both companies adapted to changing market conditions.
With advancement in technology and the ushering in of the digital revolution, both companies were aware of the need to recognize, appreciate and adopt technological changes. In fact, Kodak was the first company to develop and sell digital cameras. However, Kodak was unable to utilize technology to ensure that it produced en mass and took advantages of the economies of scale (Hill & Jones, 2012). Fujifilm adopted digital imaging after Kodak but was able to adapt to the changing markets in a swift. Fujifilm ensured that the prices of its market products were set below the market price of Kodak’s products. In the USA for instance, Fujifilm recognize that the target market was so responsive to price changes and as such, it gained popularity among the customers. In other words, the market share of Fujifilm was twice as much that of Kodak (Hill & Jones, 2012).
Recommend three (3) ways any company should build in flexibility to back up its decision-making process in order to adapt to changing market conditions.
From the above case studies, it noteworthy that Kodak needs to build flexibility to order to adapt to the dynamic nature of markets.
- At the outset, the company should ensure it targets the emerging markets that continue to increase their spending power. In fact, Clay (2012) articulates that Kodak should target the BRIC (Brazil, Russia, India and China) countries.
- Secondly, it is imperative to increase their flexibility in terms of setting price – their prices ought to reflect competition and the needs of the customers. This was actually the main factor that allowed Fujifilm to overtake a ‘mature’ corporation such as Kodak.
- Finally, Kodak ought to review its decision of concentrating on products mainly for commercial and businesses and include consumer products. They should focus their energy on consumer products such as smart phones.
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