Strategic Planning at Fujifilm - Case Study Example

?Running Header: Strategic Planning Report to Mr. Komori Type here Module here here Here Mr. Komori (TYPE YOUR NAME HERE) Sub: Future roadmap for FUJIFILM Date: Type data of submission here Respected Sir, Fujifilm is more of an elephant than a lion. It is a huge company, but it is not very aggressive. Instead the organizational culture is more passive. It can be stated here that winners firms lead other firms and do not follow them. Unfortunately, Fujifilm falls in the second category. Needless to say that the new avenues need to be discovered which should add up to the historical profit margins of the company. Currently, the profits are falling and copy approach that is engraved deep into the veins of the company is not doing justice to its potential. Hence, Fujifilm needs to follow a policy that gives chance to employees to bring out their create efforts and innovate in order to make sure that the company does not lose on money and does not lose on profitability. In simple terms, the company needs to kill the elephant and bring out a lion. It should be more creative, more aggressive and fiercer in dealing with opportunities, competitors and its clients. It cannot afford to be passive anymore due to the fast-changing nature of the world, and cannot use the same strategies to catch its prey anymore; instead a new more innovative approach is need every time the company goes out to catch its prey. The word “prey” in this context is Fujifilm’s market share and profitability. It is one thing that every company, and not just Fujifilm, would love to catch every time its goes out in wild to hunt. The competition will also be harsh since they are fighting the same battle, but Fujifilm needs to be harsher if it wants to succeed in the current market place and environment. There is an old saying “You have to be cruel to be successful” and Fujifilm needs to adopt this philosophy to be successful. However, it does not need to be cruel to its own people, but instead it need to tackle its competition by being fiercer and more aggressive. (Robbins, 2004) Mr. Komori recently moved to a more centralized approach. The restructuring plans showed that Research and development department was put under the control of the Board of Directors. In other words, the Research and Development department was accountable to the board rather than the departments for which it would be working for. This approach may lead to cost-containment, but it may kill the purpose of carrying out proper research and development. Hence, the decentralized research and development department is the need of the company if it wants to become more innovative. The board should not interfere with the operational issues in the company; it should only give vision, mission and sense of direction to the company. Hence it is suggested that Research and Development should be dropped from Board of Director’s agenda and should be placed under the control of departments and division head. However, these department heads should be accountable to the board if it is deemed that the Research and Development is not being used properly or cost is rising rapidly. Since the film and camera business is declining and professional photography is much less in demand, Fujifilm cannot afford to cling onto its historical film and camera business. It needs to diversify to maintain the historical profit margins and rates. If the company keeps following the elephant approach or passive approach then it can die. Hence, the new vision and mission statement should show that the company is aware of the needs of its shareholders and client and will do everything to make sure that their needs are fulfilled. (Daft, 1994) A good mission statement usually consists of three parts. It discusses the purpose of the firm, its values and also talks about the business that the firm is in. In the case of Fujifilm, the purpose of the company has changed since the decline of its Film and Camera business. The new war that the company is fighting is about improving the declining profit margins of the company. A repair work is needed on the financial statements to make them look more attractive to the shareholders. At the same time Fujifilm should tell its customers that they are the company’s prime focus and the company would continue to serve them well. The values of the company are needed to be changed according to the needs of the time. The company can no longer afford to stick to its policy of centralization. A great degree of autonomy is needed in the company’s culture in order to promote innovation and creativity. The last part of the mission statement will talk about the business. Since the demise of Camera and Film business, Fujifilm needs to adopt a core business. At this moment the company is in several businesses, but it needs to identify its core business. It should be somewhere close to its original business for the company to make sure that its identity is not lost in the business shift. Fujifilm can invest in manufacturing of Cellular Phones and their accessories. Since, the demand for cellphones is high and cellphone cameras have become an important accessory which is close to Fujifilm’s original business, Fujifilm can flourish in this business. Considering all the above factors and demand of consumers, a very good mission statement can be crafted. It should be something like this. Mission Statement: Fujifilm is not just a camera business, but it respects customers through innovation and high quality products and it gives its employees self-esteem by working on their ideas and giving them full autonomy. In doing so, Fujifilm has also not forgotten the backroom people who are working tirelessly for the company by guaranteeing them good return on their investment of up to 20%. Hence Fujifilm is a family which has something for everyone in the company. This is a good mission statement since it talks about everyone in the company and also talks about the consumers. It will motivate employees and attract more investors to the company who will know that one of the several priorities of Fujifilm is to help them earn good rates of return. Similarly, the identity of the business is protected by Fujifilm investing in a business that is very close to its original Camera business. (Drucker, 1990) Vision statement is usually a destination where a company wants to reach. The way it reaches is destination is through its values and other aspects discussed in the vision statement. Since the new policy of Fujifilm is going to focus on autonomy and hard work, the vision statement should reflect that. Similarly, the company has changed its core business that should also be reflected in the vision statement. Vision Statement: To become the premiere cellphone camera brand through innovation and hard work that will enable the company to earn high profit margin and rate of return. Since Fujifilm is already producing digital cameras there won’t be much investment capital required to setup a different plant. The production can be initiated in the same plant with small production plant tweaks and little Research and Development investment. This figure would be somewhere around $10 million. The production can began immediately and companies like Nokia and Apple can be contacted. These two companies are currently buying their cellphone cameras from Samsung and if good rates are offered to them, they can shift their supplier. Fujifilm can take advantage of this opportunity. One digital camera usually cost $20 to these companies. Hence if strict cost containment policies are used coupled with innovation then one good digital cellphone camera can be produced for around $13. This can be sold at $18 to cellphone manufacturers. The rate is cheaper and due to Fujifilm’s good brand name many heads will be turned and many companies would be willing to do business with Fujifilm. Fujifilm can take advantage of this opportunity. Assuming that 1 Million camera lens are sold everywhere for first two years with many more in the coming years, once Fujifilm develops good reputation in the market, the cost of initial investment can be covered in just two years’ time. If we look at past trends, the growth of mobile phone users is extensive. There has been an increase of 3 billion mobile phone users in last ten year, with many experts believe that the same trend will continue for at least another couple of decades. Hence, this is a very good investment earning huge gross profit margin of around 40%. The past trend shows that operating and fixed expenses of manufacturing company around 18-20%. If this is true and Fujifilm follows a tight cost containment policy then it will meet its target of 20% profit margin and will meet the expectations of its shareholders. (Randall, 1994) The marketing strategy used by Fujifilm will have to be more informative and persuasive. It will have to persuade people to look for cellphones with Fujifilm lens. They should persuade people by guaranteeing them high quality that will be as good as any other specialized digital camera. This would entail saving for consumers as they won’t need to buy a separate digital camera if they already own a Fujifilm camera phone. In the second stage, the marketing efforts should change from persuasive from informative. This campaign should talk about the history of Fujifilm in camera business and how it dominated the market in the past. This would convey brand equity and bigness to the consumers. The main aim behind this campaign should be to instill the brand trust in the minds of consumers for camera-related products from Fujifilm. All of this should follow an optimal mix of Public Relations and conventional marketing efforts to make sure that the desired result is achieved as quickly as possible. The use of ATL and BTL advertising campaigns can also be employed to achieve the desired result. ATL marketing activities can be advertising and conventional marketing campaigns. These would be mostly informative. The BTL activities will be designed to encourage consumers to make a trial purchase. These will include discounts on the product, testing the product and showing the consumers the result of these cameras. Hence, a right mix of ATL and BTL activities would help the firm achieve its sales targets in the initial months. That is not all, in fact, the ATL and BTL activities should sustain the future sales also. This will be expensive, but if done properly it will help the company go a long way and help boost its sales for the future as well. The best way to market technical products is through technical people praising the features of camera or explaining why it is better than competing brands. Fujifilm can make use of professional photographers, sportsmen and other celebrities to marketing their brand and many people will turn towards the new, but this historical brand. RECOMMENDATIONS: There is an immediate need for the company to change its operating structure and become more flexible and decentralized The company should counter the declining position in the film and camera market by introducing a new business segment. This segment should produce cellphone camera lens The company should become more proactive than reactive. It should drop elephant approach and try to become a lion It should innovate rather than relying on other companies to innovate and then to copy them. Winner firms lead by example. Fujifilm should improve its marketing activities to attract sales and trial purchases for the new sector Fujifilm should try to adopt the new mission and vision statement because it will keep all the members of Fujifilm family happy. It has something for employees, shareholders, and other stakeholders References: Daft, Richard L. (1994). Management. The Dryden Publishing Randall, Harold. (1995). Accounting. Letts Educational Publishing Drucker, Peter. (1990). The Essentials of Management. Prentice Hall Robbins, Stephen. (2004). Organizational Behavior. Prentice Hall Read More