Eastman Kodak and Fujifilm - Case Study Example

Approaches to Management: Case Analysis al affiliation Approaches to Management: Case Analysis Introduction Corporate management is essential, within current contexts of organizational enterprises and initiatives. Corporations, as a major backbone of the global economy, are essential in propelling various nation-entities’ economies; thereby providing much needed revenue and sustenance. In this regard, it pertains to the process of administrating, directing and leading an organizational firm-entity; in various aspects of its operation and subsequent economic competitiveness. Corporate management is hence tasked with amongst other roles: - management of company resources, the subsequent utility of these resources towards attainment of firm objectives, and in strategic planning that is aimed at propelling the entity towards is mission and goals. Eastman Kodak and Fujifilm: An Introduction Both Eastman Kodak and Fujifilm are corporate entities, having enjoyed international standing for lengthy periods; concerning the imaging solution and photography sector as The Economist (2014) provides. The former, is an American technology firm entity that primarily focuses on imaging solutions and pertinent services for various enterprises; with a footprint in the global arena. It primarily provides amongst others: - graphic communications, packaging, professional services and function print globally; with its core business segments comprising of Entertainment & Commercial Films and Digital Printing & Enterprise and Graphics. Thus, it is known worldwide for its photographic film products, having held a major share of the global market during the latter half of the 20th century. Fujifilm on the other hand, regards the Japanese multinational entity, which primarily focuses on the business of imaging and photography. Thus, principally, its activities are mainly in the development, production and subsequent sale and/ or service of amongst others: - digital cameras, color film and paper, photofinishing chemicals and equipment, graphic arts material and equipment, medical imaging equipment, optical devices, printers, photocopiers and flat panel displays. From the above, it is notable that both firm-entities did and continue playing an essential role in their countries’ economies. Eastman Kodak, though being a leader in the development and pioneering of photographic films for over a century, in addition to inventing the digital camera, faced rapid changes in the field of technologies; of which it was unprepared for. This resulted in the recent (Jan. 2012) filing for bankruptcy protection (Chapter 11), which provides a case study, in the need for renewed focus on its strategic management processes. The entity’s financial woes began emerging during the latter half of the 1990s, primarily because of the firm’s declining sales; of photographic film, which was compounded by the slow nature of its transition to digital photography. This was despite the fact that it is this entity that had created the core technology utilized in current types of digital cameras. In terms of its diversification efforts, there was little if any success that was further negatively influenced by the fact that the entity had built up its camera business; which while being large, it was barely profitable (The Economist, 2014). This can be ascertained to the fact that the camera business in which it put major focus on, was quickly undone by the smart-phone camera industry. Fujifilm on the other hand, possessed wise leadership, which propelled its focus to the requisite implementation of management reforms. This was concerning effecting sweeping changes that were aimed at transforming its core business structures. This is perhaps primarily as a result of envisaging of the switch from film to digital photography by way of enacting its developed ‘three-pronged strategy.’ The strategy was crucial in the entity’s eventual successful adaptation to the change witnessed, especially as a result of the success of its diversification efforts. Firm Management Analysis: Case Study As earlier mentioned, Fujifilm’s management was able to ‘read the sign’ concerning the changing technologies; which were instrumental in transitioning from the film to digital arena. This as Hiltzik (2011) portrays, is perhaps the main reason why it was successful, while Kodak continues struggling to regain its footing in the global arena. The result has been a different managerial approach, in terms of the two entities’ future competitiveness and growth. Fujifilm’s transition from the film to the digital sector, despite Kodak’s lawsuit against what it (Kodak) portrayed as gross patent infringement; best symbolizes the differences between these two global giants. These differences are exemplified by various examples of different strategic planning and implementation i.e. Kodak’s monetizing of its R&D aspect, within its core business of photography, while Fujifilm on the other hand, has reduced its reliance on the digital imaging sector, which accounts for roughly a fifth of its total revenue. This is as opposed to the past, when this sector accounted for more than half its total revenue accrued. To be noted is that Fujifilm’s success was primarily as a result of the strategy it undertook; that of concentrating more on the development of novel products, as well as affiliate business enterprises. This was unlike Kodak, which like many other American firms, concentrated more on its marketing end. Concerning the topic in focus, both entities had earlier on, realized that photography was rapidly evolving into digital. Both continued to make profits from existing film sales, investing also in digital technologies, while at the same time diversifying further into new ventures. In both entities, the film division management, buoyed by the wildly profitable sales witnessed, continued to tighten their control; while being late in admitting that this sector was a ‘lost cause.’ This is perhaps the reason why even Fujifilm, continued to concentrate on this sector. Its management was informed by the reasoning that the expected decline, was to be gradual; unlike the sudden free-fall that was to later on take place (Hiltzik, 2011). Subsequently, as Silverman (2011) avers, the film department’s profit-margins, being over half of its overall revenues realized, suddenly declined to nearly nothing. Thus, a question to ponder would be: - if the strategies utilized, the marketing forecast envisaged, and the prevailing internal politics were similar, why did the outcomes differ so much? To answer this perhaps would be the manner in which strategy and policy implementation was executed (the implementation phase/ processes. This is primarily the reason behind the resulting success of Fujifilm vis-à-vis Kodak’s gradual demise. In Fujifilm, top management had realized the need to develop existing and potential ‘in-house’ expertise, especially regarding new business ventures; in line with the core capacities. Conversely Kodak’s management, seemed to be of the belief that its greatest strength lay within investing more in both branding and marketing; in addition to simply partnering or buying its way into the new emerging industries. In this regard, the problem with Kodak’s approach was that it lacked crucial skills vital to the industry; and which were essentially enhanced by way of developing the existing in-house expertise. Crucial in this regard was that its (Kodak’s) management lacked the requisite ability to: - successfully integrate acquired companies; negotiate on enhancing profitable partnership, and in the proper vetting of acquisition candidates/ firm-entities. Where printing and film developing sales were dwindling, revenue could still be accrued, by way of installing various kiosks to work on printing digital photos. The above was true to both entities, but a similarity existed in the manner in which this was carried out. Fujifilm did have its own system, having been developed as part of the three-tong strategy; whereas Kodak needed to collaborate with a different firm, thereby sharing on the gradually declining profit margins. Moreover, Fujifilm was able to apply the aforementioned kiosk technology, to its other diverse enterprises within its digital-imaging department. Unlike Fujifilm, Kodak was unable to invest in the same measure, primarily because it lacked ownership of such technology (Silverman, 2011). Fujifilm, while continuing to dominate the Japanese, and by extension the Asian market, was able to successfully venture into the U.S. through partnerships such as with Wal-Mart, where its kiosks were placed in the latter’s many stores. This provided the much needed scale in sales and general competitiveness within the American market. The additional joint-venture with Xerox, resulting in Fuji Xerox, further allowed control of the venture’s strategy by Fujifilm; resulting in enhanced consolidation of the subsequent hefty earnings. This is perhaps what cushioned Fujifilm, when film begun its swift decline. In terms of approach to social responsibility and ethics, there is a tremendous difference from what Fujifilm took, to the avenue taken by Kodak. This is perhaps primarily as a result of the inherent corporate culture that has constantly been cultivated within the Japanese corporate sector. In this regard, company management often works collaboratively, with the existing employee force thereby providing an ‘all-inclusive’ atmosphere for company growth. In the American context on the other hand, focus is more on individual success and advancement, thereby lessening wholesome contributions and company cohesion (The Economist/ Schumpeter, 2012). Conclusion The two firms under focus were each leaders in their own identity, controlling a greater chunk of the global digital and photography sector. However, the difference in terms of implementation was crucial in the eventual success of Fujifilm, while Kodak gradually diminished in stature. Hence, I would recommend amongst others: - better inclusion of employees in decision-making processes, the development of ‘in-house’ competencies, and better choice in partnerships and enhanced long-term strategy/ vision. Restructuring is an essential aspect of contemporary economics and hence the need for strategic implementation of the procedure; in line with existing economic contexts. References A Case in Poor Management: Kodak (2014). Rich’s Management Blog/ The Economist, retrieved from: http://www.richsmanagementblog.com/a-case-in-poor-management-kodak/management-principles/ How Fujifilm survived: Sharper Focus. (18 Jan. 2012). The Economist [Schumpeter – Business and Management], retrieved from: http://www.economist.com/blogs/schumpeter/2012/01/how-fujifilm-survived Hiltzik, M. (4 Dec. 2011). Kodak’s Long Fade to Black. LATimes, retrieved from: http://articles.latimes.com/2011/dec/04/business/la-fi-hiltzik-20111204 Silverman, P.B. (31 Jan 2011). Kodak vs. Fujifilm: Lessons Learnt Looking at Winners and Losers – Digital Photography Market. Paul B. Silverman [Business Entrepreneurship/ product Development], retrieved from: http://paulbsilverman.com/2012/01/31/kodak-vs-fujifilmlessons-learned-looking-at-winners-and-losers-digital-photography-market/ Read More