Management Differences That Have Impacted the Success of Kodak and Fujifilm - Essay Example

? Kodak and Fujifilm Introduction Company History and Core Business Approaches of Both Companies In the recent scenario, photography has grabbed the attention of a number of people on a global basis as a subject of profession as well as a prominent hobby. Though photography was not too much popular at past but now the interests of people towards obtaining a wide variety of cameras have augmented manifold. This has resulted in an increase in popularity of camera and other photography component manufacturing companies such as Kodak and Fujifilm. These two pioneering companies have been the major players in the photographic industry for past number of number of decades. Although Fujifilm has in the past two decades become one of the leading names in the industry, Kodak possessed a long standing history of more than 130 years. In 1988, Kodak camera was launched in the market of the United States (US). Contextually, it came to prominence as a distinct organization with its slogan of “You Press the Button, We do the rest” which influenced the people to buy its offerings (Kodak, n.d.). George Eastman was the founding figure of the Eastman Kodak Company whose main aim was to make the facet of photography more useful, simpler along with pleasurable. The core principles that were followed by Eastman from the inception of Kodak entail a clear focus upon the needs of the consumers, global distribution, widespread advertising and mass production or manufacturing at relatively reduced cost (Kodak, n.d.). Conversely, Fujifilm is essentially a Japan based company which too is one of the giant companies in its segment. Fuji Photo Film Co., Ltd started its operations in Japan in the year of 1934. As a key turning point in the success of Fujifilm, it established its United States based manufacturing unit in 1988 which facilitated the company to challenge the dominance of market leader Kodak. In the last decade the company has made a number of acquisitions and has established its subsidiaries in emerging economies such as India, Indonesia and Colombia among others. A few of the areas of innovations where Fujifilm’s interests lie include graphics cards, optical devices, high tech gadgets and a wide range of cameras. Kodak’s core business lies on manufacturing cameras, photographic films, slide projector, scanner and printer. It also engaged itself in performing video analysis and motion processing, mobile communication and audio signal processing. Whereas, Fujifilm deals in offerings digital cameras,3D image products, films, binoculars, medical systems, graphic systems, photofinishing products, motion picture products, optical devices, recording media, industrial products, image management and semiconductor materials among others. Thus, it is apparently visible that the business of Fujifilm is quite diverse. In this regard, it is observed that despite being a giant in the technological field, Kodak faced bankruptcy situation in the year of 2012 due certain drawbacks in its approach such as a lack of focus on innovation. Fujifilm, on the other hand, has been maintaining its market share and profitability quite successfully (Fujifilm Corporation, n.d.). Comparison Between Management That Each Company Pursued In Order To Embrace Innovation In order to make the comparison between these two ‘technology based’ corporations regarding their management approach to sustain innovation, it is imperative to learn about how much the companies provided importance to innovation and technological feature development. The management of Fujifilm always plans to upgrade its innovation process through excellent research and development (R&D) process. The management of every company invests a good percentage of capital on its R&D to compete with its competitors. Fujifilm has followed the similar path. It has build ‘Fujifilm Advanced Research Laboratories’ to continue its innovation process in the year of 2006. It has facilitated to create milestone offerings in bio chemistry, pharmaceuticals and printing technologies segments. On the other hand, the rise of innovation at Kodak depended upon certain decisions taken by its management like customer focus, extensive advertising and maximum production at low coat which led to reduction in cost per unit. Its management understood that selling should not be the focus of the marketers. It should be marketing which deals only with customers’ preferences. The pioneer of Kodak George Eastman followed certain policies to maximize its sales and earn more and more profits like continuous research for growth and development and reinvestment of profit to expand its businesses. In less than 100 years, it achieved 90 percent of global market share which was entirely attained by its continuous focused management process. Kodak’s products used to manufacture in three continents including America, Europe and Asia and used to sell globally (Schreiner, 2012). Kodak made certain very lucrative innovations as well and one of them is ‘KODAK TRILLIAN SP Thermal Plates’. It aids commercial printers to reduce environmental challenges and ensures compliance with the environmental rules. It can be recycled by means of Kodak’s recycled Aluminum Plate Recycling Program (Kodak, n.d.). Management Differences That Have Impacted the Relative Success of Kodak and Fujifilm Every company has a specific life span. After this, company profits as well as market shares start diminishing. The same factor emerged is case of market leader Kodak. Its market share started to go down primarily because of its ignorance towards the need of meeting the changing consumer demands. New companies started to enter into the market with its new marketing models and rapid R&D process to innovate newer products but in this respect Kodak failed because its main innovation was only with films, so other giant digital camera makers overpowered the company in the competitive landscape. At the same time, Fujifilm has been able to win over Kodak mainly because of its flexible decision making endeavor of its management. To stand in the competition, it needed to innovate and Fujifilm did that properly. In this regard, Kodak got bankrupted after incurring huge losses. The reason behind this scenario was its less responsive attitude to the digital revolution whereas Fujifilm implemented its client based manufacturing process through intense R&D process. When Fujifilm entered the US market, the Kodak officials’ refused to think that a foreign company can give them tough competition. The overconfidence severely dented the market dominance of this giant company and its market share started decreasing. Though Kodak made one of the first digital cameras but for the company it was hard to switch from film to digital segment because of its management indifferent standpoint. Conversely, Fujifilm adapted to the market demands quite fast which aided the company to survive from incurring losses in the global financial downturn. The R&D department of Fujifilm took a lot of steps to tackle the financial downturn like bringing in Fuji Xerox R&D Square and it entered in the business of pipeline as well. A few of them are situated in Japan whereas some are situated in overseas especially in China and the US (Fujifilm Holdings Corporation, 2012). Approach To Ethics And Social Responsibility And Its Effects On The Companies’ Profitability Kodak had been quite committed towards working in a very socially and ethically responsibly manner. It set a standard to maintain the ethical values. It showed its ethical standpoint in terms of ensuring non-discriminatory approaches to its gay, bisexual along with transgender, minorities and as well as women employees. It also demarcated its responsibilities towards its customers, communities, employees and other stakeholders. ‘Business Ethics’ magazine ranked Kodak in the 58th position in its lists named ‘100 best corporate citizens’ for 2004 (Workforce Diversity Network, 2012). Similarly, Fujifilm is also ethically quite strong and for that it maintains a high and strict compliance. For maintaining ethical value towards its various stakeholders, it structured ‘Fujifilm Group Charter for Corporate Behavior’ and more importantly ‘Fujifilm Group Code of Conduct’ to teach its employees the rules, regulations, code of conduct and the social ethics. Subsequently, it has built a corporate social responsibility committee to ensure that no one gets hampered in the society and also it invests a percentage of its turnover in generating employment. As a part of corporate social responsibility (CSR), the company helps to develop infrastructure socially, so in this respect Fujifilm has done quite better than Kodak in terms of bestowing its social responsibility. Thus, for these reasons, Fujifilm has remained sustainable in the long run (Fujifilm Holdings Corporation, 2012). The Extent To Which Management of Both Companies Adapted Techniques to Changing Market Conditions In the 1960s, Fujifilm entered in the camera market and started to provide tough competition to the market leader at that time Kodak. However, in the next 50 years, things have changed substantially where the industry witnessed certain prominent crisis like scenarios due to which Kodak suffered massive losses and filed for bankruptcy protection. In this respect, Fujifilm showed a greater focus towards keeping abreast with the changing market conditions. Kodak could not survive as it did not have a flexible planning mode whereas Fujifilm always used to follow flexible planning instead of fixed one. Fujifilm’s marketing strategies have been quite unique which differed from Kodak. Fujifilm entered in the markets of liquid crystal display (LCD) panels, pharmaceuticals, chemistry and cosmetics apart from the digital photography. It is a well known fact that well diversified management or products’ strategies make a company profitable. For example, if Fujifilm incurred losses in digital photography section then other options are there for the company to retain as well as earn new profits along with distributing the profits amid the shareholders so that they do not lose confidence upon it. Nevertheless, in case of Kodak, due to a lack of well diversified product differentiation it failed to capture the market (Fujifilm Holdings Corporation, 2012). Conclusion and Recommendation For Any Company To Build In Flexibility To Back Up Its Decision-Making Process In Order To Adapt To Changing Market Conditions Market changes its nature quite fast so to survive in the market it is quite recommendable to adopt new up-to-date marketing strategies. In this scenario, firstly a company such as Kodak facing business distress should go for diversified manufacturing of electronic gadgets other than rendering concentration in film business. Secondly, it should invest a little portion from its turnover to CSR so that its existing customers imagination towards their company changes and they start recommending Kodak’s products to others. Thirdly, to deal with ever increasing competitive scenario any company should have flexible decision making process. For example, if cost push inflation rises then any company should pause its production of that particular product and start manufacturing products for which raw materials’ cost is less and which hold considerable demands in the markets. Conversely, if banks increase their interest rates to tighten inflation then people significantly lose their purchasing power. At that time, any company should decrease its price of the products so the customers can avail them. In case of Fujifilm it is recommendable that it should continuously follow its current operation process because now it is earning good amount of profits. In the present market context, any company should render flexible decision making by solely focusing on consumers’ needs as they are the prime factor for the company’s long-term stability in the market. References Fujifilm Corporation. (n.d.). At Fujifilm we create innovative product. Retrieved from http://www.fujifilm.com/about/ FUJIFILM Holdings Corporation. (2012). Led by the CSR Committee. Retrieved from http://www.fujifilmholdings.com/en/investors/annual_reports/2012/governance/auditing.html Fujifilm Holdings Corporation. (2012). Business presentation for Pharmaceuticals business. Retrieved from http://www.fujifilmholdings.com/en/pdf/investors/other/ff_presentation_20121120_001.pdf Kodak. (n.d.). Our history. Retrieved from http://www.kodak.com/ek/US/en/Our_Company/History_of_Kodak/Imaging-_the_basics.htm Kodak. (n.d.). Innovative product – KODAK TRILLIAN SP Thermal Plates. Retrieved from http://www.kodak.com/ek/US/en/Global_Sustainability/Innovation/Innovative_Product_KODAK_TRILLIAN_SP_Thermal_Plates.htm Schreiner, H. (2012). The rise and fall of the Kodak Empire. Retrieved from http://www.csub.edu/kej/documents/economic_rsch/2012-04-23.pdf Workforce Diversity Network. (2012). Business Ethics names Kodak among "Best Corporate Citizens" in annual list. Retrieved from http://www.workforcediversitynetwork.com/news_grdc_0406kodak.aspx Read More