Business Kodak and Fujifilm - Essay Example

 Eastman Kodak Company is popularly known as Kodak. It is an American technology based company which mainly focuses on imaging services and solutions for businesses. The company has it’s headquarter in Rochester, New York in USA. The company was founded in the year 1988 by George Eastman. The core business of the company is providing imaging related solutions and services. The company has transformed itself into a technology based company. Now Kodak provides- High quality research and development which is based on the unique strength of the company in imaging, deposition and materials sciences. It provides high quality products which enable the customers to accomplish improvements in productivity, sustainability and quality. It provides a world class solution on product goods packaging, functional printing and graphic communications. The company also provides services related to software which is used to redefine the flow and security of Information (Kodak, 2014). As per the history of the company, George Eastman was one of the first people who were able to invent dry plates for photographers and then he introduced the simple camera in 1988 for the worldwide consumers. It is best known for photographic film and products. It is the first company to introduce simple camera for common man around the world. During the 20th century the company had a dominant position in the photographic film market. In 1976, the company had 90% market share in USA. But during the late 1990s the company started to struggle financially as the sales of photographic film declined. After that the company was able to earn in 2007 by selling digital cameras. In January 2012, Kodak filed for protection against in the District Court of United States. Kodak had sold many of its business and patents to various companies. Fujifilm Holdings Corporation which is generally known as Fujifilm and it is a Japanese company specialized in imaging and photography. It has it’s headquarter in Tokyo, Japan. The core businesses of Fujifilm are production, sale and servicing of color film, development, digital cameras, color paper, equipments for photo finishing, equipments for graphic arts, equipments for medical imaging, printers, optical devices and flat panel displays. Fujifilm was founded in 1934 as a manufacturer of photographic film. It has expanded to be a leader in various fields of business. During the 1940s Fuji photo entered into the market segment of lenses, optical glasses and equipments. In 1962, the company has launched Fuji Xerox Co. Ltd along with another UK based company Rank Xerox. In the 21st century, with the rapid pace of digital technology in the photography segment the company had transformed its business structures in to digital technology. Although the company was founded many years later than Eastman Kodak Company but Fujifilm was able to transform its business very quickly from film to digital technology. The diversification strategy of Fujifilm was also successful while Kodak failed on that. In the year 2006, Fujifilm has announced to establish a holding company named as Fujifilm Holding Corp. and Fuji Xerox, Fujifilm will be the subsidiaries of the holding Company (Fujifilm, 2014). Compare and contrast the approach to management between Kodak and Fujifilm In case of innovation and development of products, Kodak mainly focused on the segment of digital imaging by installing the digital print kiosks in the world which is also known as Kodak Picture Kiosk. It also introduced online Kodak Gallery for photo services and took the lead by the leading the digital camera manufacturing system It also diversified the business by introducing ink jet printer which is known as Kodacolor and moved to other businesses like healthcare to fund the transition of the company. The management approaches and strategies have made it a valuable brand for the customers with a strong base of advance technology. Unlike Kodak, Fujifilm had taken a different management strategy to undertake and manage innovations. The company started to offer digital camera and printing services earlier than Kodak. It also focused on spending for its expansion. The company started to venture into many other connected markets. This strategy has helped the company to rename it with “Fujifilm” in 2006 by leaving the word “photo” out of the name of the company. It can be seen that instead of fulfilling the needs of the consumer markets, the company mainly aimed to discover and innovate new possibilities in the market of imaging and photography. The strategic agreements and joint ventures undertaken by both the companies also helped them to increase their financial performances and profitability of the companies. Determine what management differences have impacted the relative success of Kodak and Fujifilm To begin with, the difference in strategic approaches of Kodak and Fujifilm management can be summarized in one line: the ultimate mantra of success lies in long term visualization, ability to evolve with time and innovations that satisfy contemporary needs. Fujifilm’s success emphasize the need for taking the harder route of developing new products and new business than going for the shortcut through marketing. On the other, Kodak serves as warning that believing blindly on one’s brand and ignoring the signs of change can land a once successful firm in grave danger of elimination. The two firms began their journey with majority stake in film printing and developing with Kodak having a head on its rival. But, during the onset of twenty first century, the percentage of profits from film printing started to decline. As a remedy, Fujifilm diversified its technical areas, brought on new ventures such as Fuji Xerox and stressed on development of in house expertise. On the contrary Kodak continued with faith on its image and spread its impact areas in terms of outsourcing: which has a major drawback of having to rely on others for technical rights. according to IBIS World, as a result in the long run, today Fujifilm not only controls nearly 40% of the photofinishing market in America, whereas Kodak's share is only 15%, but it has growing influence on fields such as medical-imaging equipments (The Economist, 2012). Evaluate each company’s approach to ethics and social responsibility and the impact on profitability Corporate social responsibility is an important part of every business organization. Every company should do something which is beneficial for the society in which it is operating. Here, Kodak and Fujifilm both have maintained rich history of ethics and social responsibilities. Kodak has involved itself in various social responsibilities among which breast cancer awareness program is one of the most important. It has supported the campaign since 2000 and in 2005 it has raised an amount of 500000 pounds. The impressive involvement of Kodak includes sponsorships of highly successful contest of Fashion Targets Breast Cancer in 2005. It teamed up with Woman’s weekly magazine to launch a nationwide search for more mature face to inspire and represent the age group who are needed to be aware of breast cancer. This contest has thrown a light on Kodak’s work in health imaging area and has shown the importance of breast screening (Trivedi, 2007). Fujifilm group’s approach to corporate social responsibility is for fulfilling the responsibilities of the society which is a fundamental philosophy of the company. It has undertaken many CSR policies like Fujifilm Group Green Policy in 2008, Fujifilm Group Social Contribution policy in April 2008, Fujifilm Group Quality Policy in January 2010, Fujifilm Group procurement policies in October 2009, Guidelines for Biodiversity of Fujifilm group in June 2009, Fujifilm group Occupational health and safety Policy in January 2010 (Fujifilm, 2014). The above mentioned ethics and social responsibilities have helped both the companies to improve the brand image and profitability among the customers. Discuss the extent to which management of both companies adapted to changing market conditions Kodak had 90% of market share in 1976 in USA and it was continued until 1990s when digitalization came into picture to replace the film. In 1996, Kodak had revenue of nearly $16 billion and profit of $2.5 billion but in 2011 the revenue has declined to $6.2 billion with a loss of @222 million. From the above chart we can see that the share price of the company has declined by 90% in the past year and in January 2012, it filed for protection of Bankruptcy in district court of USA. Kodak has suffered the huge loss due to lack of adoption of new technology with the changing pace of the global market. On the other side, the rival company Fujifilm has done well than Kodak because the management of Fujifilm was able to adopt the changing technology in the market. While both the companies have suffered from loss at some point of time, Fujifilm was able to transform the business into a profitable one with diversification and innovation but on the other side Kodak has failed to adopt the change in time. Recommend three ways any company should build in flexibility in order to adapt to changing market conditions Every company should be flexible enough to backup its decision making policies in order to adapt with the changing market condition. There are three ways in which the company can flexible- The company should focus on high quality R&D to innovate new products according to the changing market demands. The company should have efficient managers who will be flexible enough to keep pace with the rapid changing market. The company should spend on diversification and expansion and it should be able to take advantage of the changing market to attract the customers. References Kodak. (2014). Our Company. Retrieved from: http://www.kodak.com/ek/US/en/About_Kodak_Top/Our_Company.htm. Fujifilm. (2014). Corporate History. Retrieved from: http://www.fujifilm.com/about/history/corporate_history/. The Economist. (2012). How Fujifilm survived Sharper focus. Retrieved from: http://www.economist.com/blogs/schumpeter/2012/01/how-fujifilm-survived. Trivedi, T. (2005). Cause Related Marketing. Retrieved from: http://dspace.iimk.ac.in/bitstream/2259/370/1/193-201.pdf. Fujifilm. (2014). The Fujifilm Group's Approach to CSR and Related Policies . Retrieved from: http://www.fujifilm.com/sustainability/commitment/approach/. Read More