Term Paper on "Kodak and Fujifilm KG"

Term Paper 6 pages (1915 words) Sources: 5

[EXCERPT] . . . .

Kodak and Fujifilm

Kodak and Fujiflim

In 1884, George Eastman discovered the Eastman Kodak Company. Kodak was one of the first companies to soar in photo technology in the 1990s. Surprisingly enough, it was also the first company to make a digital camera and rule the camera business throughout the 1990s. Their popularity and use got so widespread that the slogan they used was "You press the button, and we do the rest" (Gavetti et.al, 2005) the major guiding principles that the company used was extensive advertising, keeping their focus on the customer, low cost, global distribution and growing with continuous research. (Mendes) Up and running, the Kodak Company was determined to make through and soar to new heights.

By 1976, Kodak had begun to rule the camera and film sales in the United States. By that year, Kodak basically owned 90% of the film sales and 85% of the camera sales. Even till the 1990s, the company was termed as one of the best brands in all the countries. (the Economist, 2012) These details pretty much go on to show that Kodak once did rule the camera business.

The major management differences that come about from the two companies are that one failed to change its path. For some reason, Kodak's management did not back off from the idea of cameras and photographs. It was pretty apparent that the digital world would take over, yet Kodak did not change its path. It should be noted that Kodak lacked strategic creativity basically caused it to misinterpret the plan of actions it was going down. It read all the signals wrong and chose the type of work and industry that would later be crumpled by the incoming digital age. (Levitt, 1960) the problems that were faced by the company were dealt with rigidity rather flexibility. That is pretty easy to explain on the basis of lack of strategic creativity.

Talking about strategies, Kodak has always maintained the Rational Thinking Perspective approach towards the production of cameras and films. In other words, they maintained their main focus selling cameras low cost and having most of the revenue arrive from the growth and profit of the film industry. This strategy is also used as the razor-blade strategy. (Gavetti et. al, 2005) This strategy is the same that Gillette uses to gain more and more profits. Their major sales are merely from the blades and not the razors. Where Kodak stuck to their creation of films, Fujifilm was coming up with better ideas. Where Kodak stuck to the RTP approach, Fujifilm was utilizing the generative thinking perspective (GTP) approach. Fujifilm was not afraid to take on risks and trusted on its intuition. With the examples that would be given below, it appears that Kodak did go for some new ideas however they weren't as successful as Fujifilm's were.

Looking at this ethically, it appeared that Kodak did not allow much room for intuition and creativity in the company. Their strategy lacked the frame breaking behavior that was put forward by the GTP approach. This meant that the people in the corporation did not have the right to ask questions or even lend a hand in making better and changed scenarios in the future of photography and imaging.

On the other hand the strategy started by the Japanese firm Fuji Photo film co was quite different. Even though it may appear that Fujifilm got ahead of Kodak in the later digital age, the facts state differently. It should be noted that the problems arose in 1984 when the Japanese Fuji Photo Film launched itself in the American market. Even though a new name in the film industry, Japanese Fuji Photo film swept the customers off their feet as they offered a 400 color film that was about 20% cheaper than Kodak's. (Mendes) This was a fact and a bad news that Kodak didn't pay much attention to. Despite what was apparent, Kodak believed that the American public would not go for another film apart from Kodak's. (Gavetti et al., 2005)

As it is apparent, out of Kodak and Fujifilm, Fujifilm was the one to survive and still retain its hold in the market. In the simplest terms, Kodak failed to divert and change its path when there was urgent need to do so. Just recently, Kodak has filed for bankruptcy, whereas Fujifilm is still thriving in electronic and health care operations. The chief executive of Fujifilm Shigeta Komoro stated that both Kodak and Fujifilm predicted the incoming digital age. Due to this, both of the companies had to adapt and come up with better ideas.

It was in the late 1980s, that the digital age was showing some of its sign. Mendes states that Kodak actually went on to commit a corporate suicide by not sticking to a model that wouldn't work in the post digital age. It was pretty apparent that a change was required and that would only be accomplished through a generative thinking perspective (GTP) approach. So in simple words, there was a time for change that Kodak didn't utilize right then. In late September 2003, Mr. Carp decided that it was time do something and by that time the digital technology was full blown and ready to take over the world. The major plan that Kodak carried out was that it would allow the film business to wear off as it put its money elsewhere. The new plans and the business strategies would be elaborated below but it should be noted that ever since then, Kodak has fired about 11,000 workers. It was also predicted that time that 15,000 would be fired by 2007. (the Economist, 2005)

The adaption to change for both the companies was quite different. It was quite obvious that either an evolutionary change early on was required or a radical revolutionary change. Fujifilm rather adapted to the evolutionary change strategy and carried out their plans effectively. Therefore we see that the changes that Kodak took on change within evolutionary means. The business strategy that they implied was rather slow to implement and slow to start as well.

On the other hand, Fujifilm realized that they need to implement the changes and they need to take them on quickly. Their evolution process began rather early and due to those reasons, they are at a more stable position than Kodak. Due to what the situation is now, Kodak is now bound to take on some revolutionary and radical change that will change the future for the company.

Now we look into detail how both the companies adapted to change. As mentioned earlier, it is true that Kodak tried out new ideas but they weren't as successful as the company's were. These changes went on to harm the company as oppose to working in its advantage. One change or new project that Kodak implemented was that it went into the pharmaceutical business. There were a lot of chemicals available in the factory that experts utilized to make films. Instead of putting those expensive chemicals to waste, Kodak decided to use them and turn them into drugs. The attempts to make a pharmaceutical company were not so successful and the entire project was shut down in the 1990s.

Putting the razor blade theory in effect, Kodak worked on making cheap digital cameras that required expensive film. This new plan was based on the assumption that people would go crazy at the thought of cheap digital cameras. Even though the idea did grow for some time, it eventually faded as digital cameras became the new thing in cell phones. The idea of having a phone in your camera was new and attracting to all the people. This idea was so popular that people who didn't even own a camera before went onto gather that experience through their smart phones. Due to this reason, the scheme of having digital cameras and still sticking to film did not work at all.

These were the attempts made by Kodak to the change that was incoming. Now going back to Fujifilm, there adoptions were rather more successful. Even though the company did not stick to or rely on the film industry, it rather went on a different path. They decided to try for a new cosmetic line.

It is know that anti-oxidants are also used in films and in developing pictures. Just like Kodak, Fujifilm made use of those extra chemicals and launched a new line of cosmetics known as Astalift. Everyone knows that antioxidants are good for the skin and due to this reason; Astalift was well tolerated in the Asian markets. As the brand became popular in Asia, it was also making its move around Europe as well.

Another successful venture that Fuji film embarked on was to make optical films for LCD flat panel screens. Even though this venture was costly, it went on to give more profit to the company as well. As it is known, the change into digital picture taking… READ MORE

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