Kodak, formerly known as Eastman Kodak Company, was founded by George Eastman in 1888. The company’s early success was based on the launch of its revolutionary camera which simplified the photo taking process (Kodak, n. d. ). Kodak’s main focus was photography and imaging, and its products ranged from photography equipment to film, paper and color chemicals.
By the 1980’s, Kodak’s market share reached an amazing 90%. Although they developed the basic technology for digital cameras in 1975, the idea was dropped due to fear that it would threaten the company’s film business (Williams, 2013).Because Kodak executives could not imagine the world without traditional film, they failed to realize how fast digital cameras would become common; the technology started to spread and film sales dropped considerably at the late 1990’s. The slow transition to digital technology, denial of the declining film usage, and competition from other companies eventually lead to Kodak’s loss of market share both in the United States and worldwide, placing Kodak at a 7th position. In January 2012, the company filed for Chapter 11 bankruptcy protection, and a year later the Court approved financing for them.Kodak sold many of its patents to a group of companies such as Apple, Google, Microsoft, and others.
Fujifilm, a Japanese company, was founded in 1934. They also focused on photography and imaging. The company soon ruled the Japanese market, which was ranked second after the United States in film usage. Eventually, the company entered the global and American market with a bold move, using aggressive marketing and low prices.
The turning point of the Fujifilm’s success in this venture was marked by the 1984 Los Angeles Olympics, when they became the official film of the event.This placed Fujifilm on the market permanently, and the company started taking over Kodak’s market share by offering equal quality products for a cheaper price (Fujifilm, n. d. ). As Fujifilm prepared for the fast changing needs in the market, it widened its business scope to digital cameras, printers, photocopiers, and optical devices.
It also tapped into the health sector, producing medical equipment that includes X-ray imaging and chemicals. Compare and contrast the approach to management that each company has pursued in order to embrace innovation.Kodak’s failure to embrace innovation in a timely fashion could be blamed on its management’s approach. They seemed to “rule” from behind the desk from their Rochester headquarters, which made them ignorant about the coming changes in technology and customers’ needs, and how it would affect them.
Even when they were advised that the move to digital technology was necessary, management still refused to take action. In fact, avoiding revolutionizing the technology they originally created is the main reason behind Kodak’s current troubles and loss of share in the market (Williams, 2013).Although they created the first ever digital camera back in 1975, top-level management rejected the idea in fear of losing its core business in film. Looking back, this seems to be the turning point in the company’s fortune (Mui, 2012). The predicted change to digital technology 20 years later was seen as the far future, and as the company enjoyed success, leadership did not see a reason for change.
In recent years, however, Kodak tried to change its management strategy in embracing innovation. They shifted to delocalize research and collect data, in order to gather more information about consumer preferences.They also diversified top-level management to ensure best skill input in each field, and implemented a more democratic management style that listens to staff suggestions and ideas (Williams, 2013). Fuji, on the other hand, took a different approach from the beginning; while they were successful in the film business, they prepared for the switch to digital technology and developed new business lines.
Initially, they started off as a photography and imaging company, then diversified into different other products such as digital cameras, cosmetology, and medical equipment.This enabled Fujifilm to achieve profits depending on the preferences of their various customer bases. After its successful dominance in the Japanese market, Fujifilm realized the potential in venturing into the global market. The 1984 Olympics in Los Angeles marked the breakthrough point in this venture, when Fujifilm became the official film of the event. This provided the company the opportunity to get a growing portion of Kodak’s market share (Schum, 2012). A joint venture with the UK based Xerox (Fuji Xerox) helped establish further global production and sales.
Their consolidated funds equipped both companies with capability for innovation, research & development, and investments. Determine what other management differences have impacted the relative success of Kodak and Fujifilm. Provide specific examples to support your response. Resistance to change by management was a major cause for the failure of Kodak. They felt their initial plans and strategy worked so well that change wasn’t needed. They developed a false sense of security and failed to realize and counteract the threat posed by Fujifilm.
Apparently, despite having great ideas, the management team never actually implemented them (Mui, 2012). Kodak also seemed to believe that its core strength lay in brand and marketing, and that it could simply partner or buy its way into new industries, such as drugs or chemicals. But without in-house expertise, Kodak lacked the ability to integrate the companies it had purchased and to negotiate profitable partnerships (Schum, 2012). Unlike Kodak, Fujifilm implemented its goals and ideas, and the company’s quick adaptation to change was a defining advantage over Kodak.When they realized the impending move towards digital technology in the early 1980’s they prepared for it and diversified their business lines. This way they were able to replace lost profits from film sales with new revenues, and reinvested those profits in research and development (Schum, 2012).
They also utilized diversity as a key management strategy, and invested in various alternate products such as medical equipment and digital technology while realized the need to develop in-house expertise in the new businesses.Evaluate each company’s approach to ethics and social responsibility and the impact those approaches have had on each company’s profitability. Kodak is committed to environmental, ethical, and socially responsible operations that include maintaining safe facilities and providing quality products while minimizing the impact on the environment. The company’s single-use recycling program helped avoid waste while saved resources and reduced costs by reusing the recycled material for manufacturing.In 2004, Kodak was noted for its anti-discriminative policies regarding employees’ sexuality and for the fair treatment of minorities and women by the Business Ethics magazine.
All this effort resulted in promoting Kodak’s image as a trustworthy and conscientious company, and attracted a loyal and strong customer base (Kodak, n. d. ). Fujifilm is obligated to ethics and social responsibility as well. The company set high standards in this regard which all employees have to observe and comply with, including top-level management.This ensures that these measures and values are integrated in all company procedures, increasing productivity, efficiency and thus profitability.
They also implemented a transparency policy to keep the government and customers aware of its business activities. Discuss the extent to which management of both companies adapted to changing market conditions. Although both companies conducted environmental scanning to monitor the changes in the market, they chose different paths for execution.Kodak stood firm in their traditions, and was overly confident in their brand and marketing.
They tried to make strategies to keep up with changing market conditions, but it was always too little too late. Management made efforts to diversify the company’s products without much success, and by the time they decided to “join” the digital photography market, it was quickly cannibalized by emerging smart phone cameras. Currently, the company is trying to reconstruct its strategies with a main focus on commercial printing.Fujifilm long realized the upcoming changes in photography technology and implemented strategies in the late 1980’s to capitalize in film photography and invest the revenues in digital technology. This ensured that its photography segment stayed strong in the changing market. Over the years, the company also acquired diverse ventures to maintain high profits in case of the potential decline of its core business in film photography (Schum, 2012).
Fujifilm’s diversity of in-house expertise and products ensured a smooth transition during changing market conditions.
