Kodak and Fujifilm, And Leadership Assessment Kodak and Fujifilm

The History and Core Business of Each Company

Eastman Kodak, in the words of Hill and Jones (2007, p. 482), "was incorporated in new jersey on October 24, 1901, as a successor to the Eastman Dry Plate Co., the business originally established by George Eastman in September 1880." It is important to note that as the authors further point out, the Dry Plate Company had primarily been established to facilitate the development of the more portable and user friendly dry photographic plate. Essentially, Eastman is credited with laying a strong foundation for a fledging business. His key goal was to see photography simplified. It was not, however, until 1888 that the availability of photography to everyone stated to appear as a rather realistic goal. In 1888, Eastman introduced the very first camera that could be easily carried around (Hill and Jones, 2007). According to the authors, the said camera made use of Eastman's patented film, meaning that the company had effectively gained control of, or secured "all the stages of the photographic process" (Hill and Jones, 2007, p. 482). As a result, sales boomed -- firmly putting Kodak firmly on the path to success, as far as photographic technology was concerned.

The consumer photography market was largely dominated by Kodak thought the 1800s and in the early 1900s. The company's yellow boxes, as Hill and Jones (2007) point out were common in almost all corners of the world. The company, however, started to experience some challenges in the 1970s and 1980s that led to a drop in its return on equity. Its main threat at this time was the changing nature of the industry -- "major innovations were taking place within the photography business, and new methods of recording images and memories beyond silver halide technology, most noticeably digital imaging, were emerging" (Hill and Jones, 2007, p. 483). What is sad with regard to Kodak is that despite its promising beginnings, the company has lately been struggling to stay afloat. In the beginning, as it has already been pointed out elsewhere in this text, Kodak's core business was film and camera production. Currently, the firm largely focuses on imaging for business and related technologies.

Established in Japan in 1934, Fujifilm could be regarded a relatively young company, in comparison to Kodak -- its main rival in the photographic and electronic equipment market. At the onset, the company largely focused on the production of motion picture as well as photographic films. It was not until the 1940s that the company ventured into other equally promising markets; chiefly the equipment, lenses, as well as optical glasses markets (Patersen, 2012). Unlike Kodak, Fujifilm further ventured into other markets later in the 1960s, with some of us areas being electronic and medical imaging as well as printing. It should, however, be noted that like Kodak in the U.S., Fujifilm was the dominant player in Japan's photographic and electronic equipment marketplace (Naftel and Spiwak, 2000). Indeed, for approximately two decades after it was established, the company elected to largely focus in its home region, with its first attempt at exploring overseas markets coming with its partnership with Rank Xerox, a company based in the United Kingdom (Bouchikhi and Kimberly, 2008). Later on, the company ventured into the U.S. market, with its performance in this particular market being far more successful than that of Kodak after the latter ventured into Japan (Naftel and Spiwak, 2000). It is important to note that in comparison to the other film manufacturers, Fujifilm was the most successful when it came to not only predicting the shift from film to digital but also the preparation for the same and the implementation of strategies aimed at surviving this fundamental change. Today, the company concerns itself with not only the production, but also the development of color film, chemicals used in photofinishing, and digital cameras.

The Approach Each Company has Pursued in Order to Embrace Innovation

Innovation, in the words of Herzog and Leker (2011, p. 10), is "the commercial exploitation of a new idea or invention." Essentially, both companies' approach to innovation has been very different. Kodak took the role of a cautious player, as has been pointed out elsewhere in this text, up until the digital revolution in photography had already set in. From the onset, Kodak's was an amazing formula to success that essentially relied on research and development to churn out new and more enhanced products. For instance, the company was the first to exploit an approach whereby...

The cameras were relatively inexpensive. The company was also the first to present a digital camera to the market, although it did not fully exploit the market potential of this promising product. Later on, however, it became apparent that Kodak's reaction to change was somewhat slow. The company also had a tendency to underestimate its rivals, thereby compromising its ability to react as fast to competitor moves.
In seeking to embrace innovation, Fujifilm has, all along, been flexible. This is particularly the case when it comes to the decision by the company to transition away from film. Instead of attempting to compete through marketing, as Kodak elected to do, Fujifilm embraced new business and product development. It is important to note that while the transition from film to digital was apparent to both companies; it was Fujifilm's response and approach to innovation that came about as being the most effective. Fujifilm was more efficient when it came to execution. This is more so the case considering that most things were constant for both companies at the very beginning: i.e. internal politics as well as strategy and market forecast. While Kodak has, within the last two decades, done away with most of its original flagship products, Fujifilm still has most of its original product portfolio intact. However, the company has over time ventured into new ventures -- meaning that its interests spread far beyond film development.

Other Management Differences that Have Impacted the Relative Success of Kodak and Fujifilm

In addition to being slow to respond to innovation, Kodak's management was also, prior to the bankruptcy filing, rather reactive as opposed to proactive with regard to its response to diverse competitive practices. For instance, as DePamphilis (2013) observes, one of the key things that put Eastman Kodak firmly on the path to decline was the entry of foreign competitors in the market, with Fujifilm being the most notable of all. These companies, as the author further points out, went ahead and undercut Kodak's film prices. In the words of Hill and Jones (2007, p. 483), "finding no apparent differences in quality and obtaining more vivid colors with the Japanese product, consumers began to switch to the cheaper Japanese film." The reaction of Kodak to these competitive practices was lukewarm, at best. There are a number of strategies the management of the company should have adopted to neutralize such a move -- including, but not limited to, taking deliberate measures to differentiate the company's products. Instead, the company's management elected to look on as its market was being eroded. Yet another misstep on the part of Kodak's management, as Hill and Jones (2007, p. 483) point out was the failure to "improve productivity to counteract rising costs." This, as the author further points out made it difficult for the company to engage in the continuous improvement of its products, further reducing the share of the market it had control of.

Fujifilm's management; unlike was the case at Kodak, had in place effective measures to rein in costs. For instance, the company (unlike Kodak) ensured that film was produced in a single country, as opposed to multiple countries. This, as Hill and Jones (2007) note advanced to Fujifilm a cost advantage. In the end, Fujifilm ended up becoming the cost leader. It is also important to note that Fujifilm's management has in the past appeared more decisive and forward thinking than Kodak's managerial team. For instance, the management of Kodak, as Hill and Jones (2007) point out saw the need for an easy-to-use camera (35-mm), but quickly dismissed the idea in what could easily gone down in corporate history as one of the greatest displays of sheer managerial shortsightedness. Several years later, the more flexible and forward-thinking Fujifilm management successfully introduced a similar camera in the market; with customers shifting to the said product in huge numbers (Hill and Jones, 2007, p. 483).

It is important to note that the blunders and smart moves made by the management of both Fujifilm and Kodak, as has been highlighted above, had a direct impact, years later, on the success of each company. In basic terms, Kodak's fortunes declined while those of Fujifilm went up.

The Extent to which the Management of Both Companies Adapted to Changing Market Conditions

As DePamphilis (p. 606) points out, Kodak was amongst those businesses that were adversely affected in…