During a long period, Kodak and Fujifilm were the main competitors in the developed industry of film technologies and photofinishing. In spite of the fact that Kodak should be discussed as the pioneer in the industry because the company was founded in the United States during the 1880s, Kodak failed to face the rapid changes in the market and industry, and the company filed for bankruptcy protection in 2012.
The act supported the fact that the company could not adapt to the transformed market and customers’ new demands. On the contrary, Fujifilm successfully adapted to the new requirements in the spheres of management and marketing and became the leading company in the United States’ market.
To understand the causes of Kodak’s decline and Fujifilm’s success within the US market and globally, it is necessary to analyze the companies’ management and marketing strategies while comparing and contrasting Kodak and Fujifilm’s approaches.
History and Core Business of Kodak and Fujifilm
George Eastman invented the unique dry-plate process in 1880, and the first factory for producing the dry photographic plates was opened in Rochester, NY, in 1892. The Eastman Kodak Company became the leading producer in the industry of the United States because of being a pioneer in the field.
In the 1960s-1980s, the medical imaging segment became to be actively developed along with the photography segment (Gavetti, Henderson, & Giorgi, 2004, p. 4).
The century of the company’s success depended on such principles as the focus on mass production, the concentration on the international distribution, effective advertising strategies, and the customer-oriented strategies. Kodak became the multinational corporation widely recognized by customers who associated the brand name with the idea of quality.
Fujifilm was founded in Tokyo in 1934. The company’s leaders concentrated on the importance of technologies to succeed in the photography industry. Much attention was paid to research and innovation. If Kodak focused on the traditional quality, Fujifilm focused on the innovative meaning of quality and service. In the 1970s, the faster film with extremely bright colors was proposed to customers.
In the 1980s, the first one-time-use cameras were presented in the market, and it was the real innovation within the industry. Fujifilm concentrated on the US market in the 1980s while proposing low prices and innovative products for customers (Fujifilm, 2014). Today, Fujifilm produces color films, cameras, electronic imaging, photofinishing equipment, and medical diagnostic systems.
Kodak and Fujifilm’s Approaches to Management to Embrace Innovation
Referring to the histories of the companies’ development, it is possible to state that Kodak and Fujifilm always followed different approaches to management to embrace innovation. Kodak chose the path of traditional development with the focus on the customer’s satisfaction.
Determining three main segments for production such as the photography segment, health imaging segment, and commercial imaging segment, Kodak chose to balance between the focus on the traditional and digital technologies as well as on the traditional and strategic management.
The impossibility to avoid the focus on producing classic products was also reflected in the company’s management and marketing strategies. Kodak proclaimed the focus on the variety and diversity in management along with stating the necessity of strategic changes.
To focus on the significant changes in the market and to realize the shift from producing classic products to producing digital products, Kodak proposed restructuring the management of the company to respond to the market trends. The problem was in the fact that the focus on restructuring the company’s management provoked instability instead of developing the strategic approaches (Gavetti, Henderson, & Giorgi, 2004, p. 8).
On the contrary, Fujifilm was successful in preparing the management team for the necessary changes and to the constant focus on innovation. To remain competitive within the market, Fujifilm focused on strategic management and on developing effective marketing techniques to persuade customers to buy their innovative products.
Moreover, Fujifilm proposed customers the innovative products which were in 20% cheaper in comparison with Kodak’s classic products. The company’s management was organized to meet and exceed the customers’ expectations to compete within the industry.
As a result, the risk management was also welcomed in the company during the 1990s-2000s as the reflection of the focus on innovation research in the company’s development and production. During the process of development, Fujifilm chose to create an effective management team developed according to the principles of robust management to respond to the customers’ demands for flexibility and innovation.
During the period of the 1990s-2000s, the customers were ready for digital technologies, and Fujifilm reacted to this tendency more actively in comparison with Kodak’s approach (Fujifilm, 2014).
The Other Management Differences in Kodak and Fujifilm
Kodak and Fujifilm followed rather different approaches to promoting digital technologies with the focus on management and marketing strategies. If Fujifilm demonstrated the company’s readiness to use innovation in management and production as the core point for the success within the industry, Kodak failed to combine the elements of traditional and strategic management.
As a result, Kodak proposed the specific programs for training senior managers to improve the company’s approach to producing innovative digital products. Such three specific programs as the Kodak Prosperity Game, the Digital Executive, and the Future of the Company were developed to train the senior management team to prepare the management for the new company’s digital strategy (Snell & Bohlander, 2012, p. 336).
If the training developed by Kodak was a new approach to designing the company’s digital strategy in the 2000s, Fujifilm chose to develop the management team while exploring the new business fields for the business growth (Fujifilm, 2014).
Kodak and Fujifilm’s Approach to Ethics and Social Responsibility
During the years, Kodak demonstrated the effectiveness of the company’s strategy related to ethics and social responsibility. This approach affected the company’s profitability significantly. To start the industry standard in 1963, Kodak paid much attention to developing the approach which could satisfy the customers’ needs.
It was important to become a socially responsible company for which the ideas of value, quality, and customers’ satisfaction were significant. Following the traditional approach to organizing the employees’ work and to management, the company also followed the traditional approach to determining ethical norms (Gavetti, Henderson, & Giorgi, 2004, p. 9).
However, in spite of the company’s focus on ethics and social responsibility, the public concentrated on the issues of environmental pollution as the result of the company’s production. Thus, the situation affected the public’s image of the company and its profitability negatively.
To receive some gains from following the ideals of ethics and social responsibility, Fujifilm chose not only to respond to the stakeholders’ interests but also to improve the technological process, stating the role of innovation at all the stages of production. Thus, the production standards were increased, and research and development became contributing not only production but also to improving the social sector.
Adapting to the changes of the society, Fujifilm participates in the social life of the United States since the 1984 Los Angeles Olympic Games when the company was the event’s sponsor. During the 2000s, Fujifilm revised its social responsibility policies and added to environmental policy and policy on biodiversity (Fujifilm, 2014). Transparency and accountability are the main principles followed by the company about developing a sustainable business.
The Extent to Which Management of Kodak and Fujifilm Adapted to Changing Market Conditions
The changing market conditions affected Kodak and Fujifilm significantly. However, Fujifilm demonstrated that it was more prepared to the transformations, and the company succeeded in adaptation to the new conditions. On the contrary, Kodak could not react to the marketing changes appropriately and in time. The development of the digital era became a challenge for both companies.
In spite of the fact that Kodak had more experience in the field, the company could not react to the processes and develop new technologies following the customers’ demands. In the 2000s, Kodak restructured the company and focused on the Digital and Applied Imaging division. In 2004, the company had 20% in the global market while producing digital cameras (Tidd & Bessant, 2011, p. 402).
However, these attempts to respond to the customers’ needs were not enough because Kodak’s management failed to react to the changes quickly and effectively. The negative effect of the changes in markets was dramatic for Kodak because the company had to file for bankruptcy in 2012.
Fujifilm adapted to the new market conditions in Japan, the USA, and globally rather effectively because the company’s management chooses the strategy to present innovative products to customers before the market could change.
In contrast to Kodak, Fujifilm was affected by the development of the digital imaging and graphic communications markets positively because these markets opened more opportunities for the company’s development for which the focus on innovation is the main strategy (Fujifilm, 2014). From this point, Fujifilm adapted to the changing market conditions successfully, becoming one of the dominant players in the competitive environment.
How Kodak and Fujifilm Can Improve the Decision-Making Process to Adapt to Changing Market Conditions
In spite of the fact that Kodak filed for bankruptcy in 2012, it is possible to propose ways to change the company’s decision-making process to adapt to the changing market conditions. First, it is necessary to spend more resources on research and development to contribute to presenting innovative products.
Second, it is important to explore the field of digital technologies to expand to the sphere of production and to propose new innovative products. Third, it is necessary to restructure the company’s management completely, with the focus on the competitive organization.
Certain changes can also be proposed for improvement of Fujifilm’s performance. First, the company can choose to change the organizational structure to focus more on strategic management. Second, the company can choose to expand the production to cover more market sectors. Third, Fujifilm can pay more attention to the development of risk management strategies in the company to become more flexible and adaptable to further changes.
Conclusion
Although Kodak was the pioneer in the sphere of imaging and photofinishing, the company was unprepared to changes in the market. On the contrary, Fujifilm reacted to any changes in the customer’s need effectively and quickly while focusing on innovation in management and production. As a result, Kodak failed to compete in the tough environment of digital technologies, but Fujifilm succeeded in the market.
References
Fujifilm. (2014).
Gavetti, G., Henderson, R., & Giorgi, S. (2004). Kodak and the digital revolution. USA: HBS Publishing.
Snell, S., & Bohlander, G. (2012). Managing human resources. USA: Cengage Learning.
Tidd, J., & Bessant, J. (2011). Managing innovation: Integrating technological, market and organizational change. USA: John Wiley & Sons.