Kodak and Fujifilm the History and Core

Kodak and Fujifilm

The history and core business of Kodak and Fujifilm

Kodak and Fujifilm have been the most popular companies in the history of U.S. And world photography industry. Little is known about the history and the existing rivalry between the two companies over the years. Both companies have intriguing historical backgrounds; how they began and how they continue to grow and challenge one another in the industry. Fujifilm was set up in early 1934 with the primary objective of becoming the leading Japanese photographic film producer. After ten years of its establishment, the company produced X-ray films, motion picture films and photographic films. By the 1940s, Fujifilm penetrated into the lens, equipment, and optical glass markets. At the end of the Second World War, Fuji photo entered the diversification market, entering the magnetic materials, electronic imaging, and medical printing fields (Hellriegel, Jackson & Slocum, 2008).

On the other hand, Kodak, which entered the photography market in 1988, has made complex and cumbersome processes easy to access and use by anyone. Since then, the company has been setting benchmarks in the industry with an abundance of innovative processes and products that have made photography more enjoyable, useful, and simple (Johansson, 2008). Indeed, currently Kodak has not become a famous photography production firm but also image production of scientific, entertainment, commercial and variety of leisure applications. It has adopted the application of technology in combining information and images. This has created the profound change how businesses and people communicate. With their vision of making photography convenient, Kodak has continued to enhance how images touch the daily lives of people. The firm has been ranked as the premier multinational business, with a universally recognized brand. Through Kodak, people have begun to appreciate their own pictures (Stauble, 2010).

The approach to management that Kodak and Fujifilm have pursued to embrace innovation

The long-term strategy embraced by Fujifilm in the U.S. is to produce locally while competing globally. Globalization via localization has translated into the production of much paper and film on the land of America to avoid troublesome disputes of trade, become more responsive to the demands and needs of U.S. consumers while minimizing the overall costs. In 1990, Fujifilm produced only 5% of their products outside Japan (Lloyd & Vautier, 2009). Currently the figure has reached 50% with various manufacturing plants distributed across France, China, Germany, Netherlands, and United States. Kodak and Fujifilm have to stay competitive in the industry as they fight to produce state of the art digital goods. For this reason, Fujifilm founded FUJIFILM Software in 1999. Over the past 10 years, the company has been doubling its sales while the numbers of employees have remained flat across different stores. This success has not come on a silver platter; Fujifilm laid down a number of strategies among them re-building its brands, marketing investing in R&D, as well as improving the quality of products (Hill & Jones, 2010).

On the other hand, Kodak has focused on the grand management strategy of product quality. The company is poised to use this strategy in its battle for global dominance. The company has invested billions of dollars distribution, research and development, as well as marketing. This is a clear indication that the two companies have set a high pace, which makes it impossible for new entrants to catch up with them.

Management differences that have impacted the success of Kodak and Fujifilm

Fujifilm has always boasted of having the appropriate technology for the production of superior products that drive sales. Fujifilm has devoted 10% of its finances on research and development to retain its competitive position. Because of this massive investment, Fujifilm has gained the ability to bring to the market fast films with bright colors; 1600 speed and 1800 speed. This is what the serious amateur and professional photographers have been requesting since early 1970s. The advent of technology has enabled Fujifilm to one-time use camera. When rival firm, Kodak reached this phase, Fujifilm had already established a leading one-time camera experience, which was never experienced by the Kodak, due to its traditional films (Stauble, 2010).

Fujifilm's tendency to outpace Kodak and its attention to detail technologically has driven it to a great professional space. This serves as a stepping-stone for the company to build credibility in the professional amateur market. Fuji's success began with the initial sponsorship of the 1984 Los Angeles Olympic Games (Hill & Jones, 2010). This marked the success of the company, which started to market its products under its brand name quietly and slowly progressing in the United States market. Kodak has been shaken by the fact that Fujifilm has attained inroads in America. For this reason, Kodak has been battling in all markets. The greatest strength of Fuji is that the company ensures that clients are always ready to purchase their products. In fact, Fuji gets its products direct at the doorstep of customers. Following Fuji's success, Kodak has realized the emerging markets, as well as the changing industry. For Kodak to manage these changes, the company has admitted that it is fundamental to establish outlets where the market is. To this end, it has set up marketing offices in the Silicon Valley and Atlanta (Hellriegel, Jackson & Slocum, 2008).

Kodak's and Fujifilm's approach to ethics and social responsibility

Kodak has been committed to operating in a socially, ethically, and environmentally responsible manner. This commitment encompasses maintaining safe operations and facilities, as well as the provision of safe goods that minimize environmental degradation throughout the product lifecycles. This commitment has been supported by their suppliers (Lloyd & Vautier, 2009). The set of supplier standards set by Kodak outlines the expectations for supplier safety, health, ethical performance, labor and formalizes the required expectations that suppliers must follow. According to Kodak, this set of standards is a total initiative of the supply chain hence the company expects their suppliers to pass the same expectations to their suppliers ensuring conformance in the entire supply chain (Stauble, 2010).

Kodak is an active member of the citizenship coalition and the company's environmental responsibility programs conform to the best practices in the industry. As a member of the coalition, Kodak has earned a position among the leading companies that established an industry code of conduct. This ensures that working conditions across the industry of electronics remained safe, employees are treated with dignity and respect, and suppliers uphold ethically responsible practices (Johansson, 2008). According to Kodak, it is its expectations that all suppliers must act consistent with the code of conduct. Kodak has established a common goal with the coalition's code of conduct of building capability and awareness in the entire supply chain to attain consistent high social responsibility and environmental standards (Hill & Jones, 2010).

With the gradually evolving industrial economy, the industrial economy is currently paving a way for the emergence of the digital economy. In the new industrialized era, technology has become the dominant factor behind the generation of wealth rather than capital, labor and land. In this regard, proper information management through information technology has cut the line and separated the losers from the winners (Stauble, 2010). Therefore, due to the insurgence of the digital regime, power balance has shifted dramatically from the manufacturers to the consumers. Fuji has succeeded to beat the competition by offering highly customized goods that fulfill the individual consumer needs. This suggests that Fuji has in the digital era has been employing product development procedures that promote dynamic interaction with customers (Johansson, 2008). The company has been conducting more precise and constant research on market trends monitoring the overall market behavior. This includes ensuring rapid procurement of raw materials, application of suitable distribution methods and convenience outlet stores are established. In other words, Fuji's free flow of information has placed their clientele at the core of the company's business strategies and priorities (Stauble, 2010).

Kodak has empowered its consumers through the strategy of 180-degree business changes from making and selling to sensing and responding. This strategy has become an adaptive system for the company to predict and respond to the request. Kodak has built this strategy upon dynamically interrelated sub-processes relying on economies of scope instead of economies of scale (Johansson, 2008). Kodak has the responsibility and power to sense and respond to the market environment by investing in the production of customized goods consistent with adaptive designs of their business. Sensing and responding by Kodak is employee involved, process focused, and customer driven. Following notable growth in uncertainty, great emphasis on flexibility, adaptive changes and entrepreneurial culture, Kodak have stressed that they also primarily concerned with customer value (Hellriegel, Jackson & Slocum, 2008).

While companies are required to respond to the changing expectations of the society, an increasing number of businesses appear to be taking pride in corporate citizenship by dedicating themselves to social responsibility. Companies such as Kodak, which have previously received corporate conscience recognition, have developed a significant evolution by devoting to social accountability (Lloyd & Vautier, 2009). By conforming to the global standard, Kodak has provided frameworks for independent ethical verification of their production means. This has been a major practice for Kodak to demonstrate its commitment to social responsibility and ethical business practices in both supplying and manufacturing products they sell. The global standards entail auditing Kodak by using independent auditors in an array of issues such as disciplinary practices, compensation practices, and freedom of association, employee health and safety, as well as child labor. Because Kodak has met these standards, the company has earned recognition attesting to its ethical operations, social management and accountability policies (Hill & Jones, 2010).

The extent to which management of Kodak and Fujifilm adapted to changing market conditions

Over the 50 years of its existence, Kodak had failed to keep its pace due to allegations of bankruptcy. On the contrary, the performance of Fujifilm has been narrow as it supplies photographs into diversified markets with notable electronic and health care operations. Fujifilm and Kodak were aware that the digital era is surging towards them; they had to develop tactics of adapting to the changing market conditions. Fujifilm opted to look ahead of the digital perspective; the firm tapped their chemical expertise for broader applications such as liquid crystal and drugs display panels (Stauble, 2010).

The company's transition to post digital was not easy or swift. Thousands of manufacturing units closed down while thousands of jobs had to be sacrificed. This follows the company's move towards fulfilling the emerging color photographic demands. For the company to survive the advancements in digital photography, the management had to restructure and venture into new businesses. This saw the company cut approximately $3 billion costs of photographic film business while recording significant profits later. The management led the firm to a decisive success through drastic transformation of the business with the advent of digitization. What differentiated this company from Kodak was how it employed technology in their production of photography (Lloyd & Vautier, 2009).

Kodak is seeking for human expertise in becoming effective in the market place. One of its latest innovations is the use of cosmetics to produce long lasting photographs. This technology has helped prevent photos from fading. The company has invested billions of dollars in new acquisitions of chemical companies. The company's profits have gone down significantly; this is an indication that the company's strategy of new acquisitions has failed. As consumers' needs and demands change and companies such as Kodak lose their core business, rivals such as Fujifilm overcome and adapt the situation through diversification. Fujifilm is geared towards increased growth in operating profits higher than its financial forecasts. It targets 10% revenue increase in the next fiscal year (Stauble, 2010).