The History and Core Business of Kodak and Fujifilm - Case Study Example

Kodak and Fujifilm Describe the History and Core Business of Each Company Eastman Kodak Eastman Kodak was a well known American company which was in the business of imaging and photographic equipment. The company has a rich history and it was founded in the later part of 19th century. The main product of the company was photographic film which was commonly used all over the world. This product gave the company an edge over other competitors and Kodak became extremely popular not only in United States but all over the world. The company also developed digital photography technology that is used in digital cameras but failed to capitalize on it which became the reason of its downfall (Hiltzik, 2011). The company filed for bankruptcy in 2012 and decided to close its many divisions because of constant loses. The core business of the company was to develop photographic equipment. Kodak film was an extremely famous product of the company. These films were used to take photographs for many years before the digital revolution. The company was also involved in the selling of cameras and other photographic equipment. Fujifilm Fujifilm is a Tokyo based company that is involved in selling photographic material and equipment, printers, medical related imaging equipment, and digital cameras. Fujifilm was mainly involved in the photographic business like Kodak, but later it transformed itself quickly and adapted to the digital technology is a better manner than Kodak. The core business of the company is similar to that of Kodak. The film enjoyed monopoly in the photographic industry in Japan. The company is currently doing very well and it is very successful as compared to Kodak. Fujifilm has entered into a lot of other industries like photocopying and graphics. The company is currently growing itself by purchasing newer divisions. Compare and contrast the approach to management in order to embrace innovation Kodak failed miserably in embracing innovation and that is why it was left far behind. The company was the first one to come up with the basic technology behind digital photography but it failed to capitalize in an industry that was changing rapidly. The company did not use newer method and relied on its brand image a lot instead of focusing on business reengineering. Kodak failed to innovate and relied heavily on its old traditional technology. The company was not able to perceive the future and therefore had a complacent attitude. It can be said that Kodak’s approach to management for embracing innovation was complacent and reactive, and not proactive. The management approach of Fujifilm was very different from that of Kodak. The management of Fujifilm was extremely adaptive and displayed a willingness to change. The company readily adopted the new digital technology and therefore embraced new technology extremely well. Kodak couldn’t make use of the opportunity and did not embrace digital technology and this led to its failure. Fujifilm immediately adopted the technology and accepted the change. It did not rely on its traditional business and changed its core business process. The company took a huge step and prepared for the digital technology from 1980s and this is why the company was able to achieve success. The company saved cash from 1980s and invested in the technology at that time. This strategy paid off and therefore Fujifilm became a huge success in the 21st century. Determine what other management differences have impacted the relative success of Kodak and Fujifilm. Provide specific examples to support your response.  The major management difference between the two companies was in the style with which change was managed. Kodak had a laid back approach to management and therefore it couldn’t make use of the opportunities available to it. The company didn’t try to change its previous ways and therefore it was not able to sustain its profitability for a very long time. The move from old photographic technology to digital technology was not made quickly by the management of Kodak because of its laid back approach. Fujifilm, on the other hand, spend little time in mending it ways for the future technology. The seed of digital technology were sown back in the 1970s and since then Fujifilm started to plan for the future. This was the proactive approach which made the company successful. The management of Fujifilm made sure that the company was prepared for the new technology. This allowed the company to stay ahead of the other firms when the new technology became famous. Another difference between management of the two companies was complacency and adaptability. Kodak and Fujifilm both enjoyed significant monopoly power over other firms in their industry and therefore for many years they were not challenged by any firm. This monopoly power was taken as granted by Kodak, while Fujifilm continued to follow the market trends. This was a huge management difference between the two companies and this was the major reason of relative success between the two companies. Monopolies, when stop innovating, become inefficient and this is what happened with Kodak. Fujifilm, on the other hand, started innovating and this played a huge role in their success. Evaluate each company’s approach to ethics and social responsibility and the impact those approaches have had on each company’s profitability.  The approach towards corporate social responsibility of Fujifilm was somewhat better than that of Kodak. Kodak had a mixed record on corporate social responsibility and ethics (Gilbert, 1998). While, on the other hand, Fujifilm was able to maintain a good record in ethics and corporate social responsibility. Kodak had to suffer to a certain extent because of the pollutions related fines it had to pay in the later part of 20th century (Gilbert, 1998). The company was among the top polluters in the world. This was something that tarnished the image of the company to a certain extent, and also affected the company’s profitability. Also many instances of ambush marketing were reported between Kodak and Fujifilm (see Crow & Hoek, 2003). Kodak can be regarded as the main party to blame for such instances of ambush marketing. This is why it can be said safely that the record of Kodak in terms of corporate social responsibility and ethics was not particularly good. The company did invest in public projects and helped the society to a certain extent but the efforts were not similar to that of Fujifilm. Fujifilm had an extremely good record in corporate social responsibility and ethics. The company invested heavily in corporate social responsibility initiatives and therefore it resulted in the positive image of the company. These acts did not directly affect the profits of the company but helped it grow. Also there were no significant ethical incidents about the company in the media which also indicates the good company record. No significant pollution issues were also related to the Fujifilm. Discuss the extent to which management of both companies adapted to changing market  conditions.  Both companies adapted to the changing market conditions very differently. On one hand Kodak was not willing to mend its ways and relied on its monopoly power and established brand name, while on the other hand Fujifilm adapted extremely well to the changing market conditions. Kodak was reluctant to change its technology and relied heavily on its brand name. This made the company complacent instead of proactive. The company failed to realize that consumers would switch to digital technology as soon as it comes to the market because of ease with which it could be operated. Also another major problem with Kodak was that the company used to earn big profits from the sale of its photographic films. The company did not made any profits on its cameras. This also played a role in making it reluctant to switch to digital technology because it was not use to making profits on cameras and digital technology would make photographic films obsolete (Economist, 2012). Fujifilm, on the other hand, made rapid improvements in its business model and invested heavily in the digital technology. The company knew that digital technology would take over the world by storm and therefore was extremely prepared for it once it became popular among the people all over the world. Also the approach of the company towards management of innovation was very proactive as the company looked to innovate on the regular basis. This innovative culture also helped the company survive in the longer run and adapt to the changing market environment. 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 In today’s environment it has become extremely important for companies to innovate on a regular basis. Companies that fail to manage innovation meet organizational failure (Williams, 2013). This is why flexibility has become ever more important in order to adapt to changing market conditions. One of the first things companies should do in today’s ever changing environment is to invest in research and development. New technologies come in the market almost every few months and therefore it is important to keep up with the change. Flexibility can only be built if a company is keeping up with the new technology that is coming in the business market environment. Another recommendation for the company is to appoint special position of chief innovation officer. This appointed employee will make sure that the company is flexible and decision making is keeping up with the changing market trends. Appointment of such a person in the highest decision making body of the company is essential if the company wants to adapt to the changing market conditions. Chief innovation officer’s job should be to prepare the company for new upcoming innovations. Companies should also foster an innovative culture in the workplace and new ideas should be encouraged, even rewarded. This will indicate to the employees how important innovation is for the company. The flow of newer ideas should never stop because this is what will prepare the company for changing market trends. References Crow, D. & Hoek, J. (2003). Ambush Marketing: A Critical Review and Some Practical Advice. Marketing Bulletin, 14, 1 Gilbert, R. (1998). Will the Last One to Leave Kodak, Please Turn Out the Lights? A Case Study in Corporate Social Responsibility. Retrieved on November 02, 2012 from http://www.rochesterunitarian.org/1997-98/980329.html Hiltzik, M. (2011). Kodaks long fade to black. Los Angeles Times. . Retrieved on November 02, 2012 from http://articles.latimes.com/2011/dec/04/business/la-fi-hiltzik-20111204 The Last Kodak Moment. (2012). Economist. Retrieved on November 02, 2012 from http://www.economist.com/node/21542796 Williams, C. (2013). Management: MGMT 5, custom edition (5th ed.). Mason, OH: South-Western Cengage Learning Read More