Introduction
Management of organizations in current environment poses many challenges due to advancement in technology and global challenges. Management is a process of organizing people in order to get things done. Modern approaches to management have overshadowed traditional methods making old organizations lose to the emerging firms. Mangers who demonstrate quality planning, organizing, leading, and controlling operations in their companies always achieve higher performances (Toelken, 2011, p. 61). Some organizations like Eastman Kodak that were well known during the 1960s have now lost their market to new companies like Fujifilm. The following discussion provides an analysis of Kodak and Fujifilm. The discussion will focus on the business history of each company, approaches to management each company has adopted to embrace innovation, and the managing differences. In addition, the discussion will evaluate each company’s approach to ethics and social responsibility, and companies’ adoption to the changing market conditions.
Kodak and Fujifilm case analysis
History of Kodak and its core business
Kodak (Eastman Kodak Company) was founded in 1880 by an entrepreneur called George Eastman. Eastman came up with Kodak Company after innovating and patenting a dry-plate formula and a machine that could prepare large number of plates. Kodak introduced roll of film that replaced glass photographic plates. Through continuous research, Kodak started mass production of films at low cost. The company distributed films internationally and gained a lot of customer focus. In 1997, Eastman Kodak was the leading film company with 70% share, 44% worldwide share and 7.5% Japan share. The company is a pioneer of low cost cameras and user friendly films. Presently, Kodak Company management focuses on development, manufacturing and marketing of professional imaging products and services. In addition, it has a digital and film imaging segment dealing with film services, photofinishing services and supply of digital cameras that are consumer-oriented. In addition, the company has a Health Group segment that provides products such as medical films, processing equipments, and digital products like RIS, PACs, and digital x-ray (Citigroup, 2005).
History Fujifilm and core business
Fuji Photo Film Company Limited was started in January 1934 by the government with a plan of establishing a domestic film manufacturing firm. The company inherited its photographic techniques from Dainippon Celluloid Company Limited. During this period, Fujifilm employed only 340 workers under the leadership of Shuichi Asano as its first president. It used to produce motion picture film, photographic paper and dry plates. The company’s initial task was building a status in the domestic market. During the first three years, Fujifilm encountered many market challenges because customers were not willing to risk their money in a company with inadequate materials. Fujifilm has since then struggled to build its core business operations and in 1997 it managed 70% of Japan market share, 33% globally and 17% in the U.S. Since 1934, Fuji Photo Film Company, also known as Fujifilm has grown into an internationally recognized manufacturer and marketer of information and imaging products. In addition, the company is the leading innovator in a variety of businesses fields (Fujifilm, 2013).
Approach to management that each company has pursued in order to embrace innovation
The differences and similarities in management between Kodak and Fujifilm play a major role in the way they embraced technology. The best way for an organization to embrace flexibility in order to promote diversity and innovation is through a change in decision making process.
Comparison
In terms of innovation, both Kodak and Fujifilm concentrated on technological advancements that led to rapid growth in the utilization of digital cameras worldwide. The introduction of digital cameras decreased demand for photographic films in a rapid manner. In order to win a competitive advantage, Fujifilm implemented responsive management reforms that transformed the entire organization structure. Similarly, Kodak introduced management reforms that saw the company maintain its pool of customers and attract more from across the world. Both companies made advancements in other businesses such as photo printing equipments, photo editing and digital imaging.
Contrast
The fact that both Kodak and Fujifilm embraced innovation through changing from photographic film to digital, Fujifilm was fast in adopting the innovation compared to Kodak. Fujifilm ensured market relevance by embracing innovation in an efficient way. The high ability for Fujifilm to enter the digital market gave it a competitive advantage increasing its market share in U.S. (Fujifilm, 2013). In 2012, Kodak filed for bankruptcy due to its lost market share to Fujifilm. On the other hand, Kodak management believed in manufacturing excellent products that were of low technology. Kodak made innovations by producing large digital cameras, but Fujifilm introduced Smartphone cameras that competed with the Kodak’s big cameras. Another contrast in the innovations between these two competitors was observed in product offering. Fujifilm entered the U.S. market with low prices compared to Kodak. Kodak made assumptions that being the largest firm in the film industry; no new company could overcome it (Larish, 2012). The assumption was wrong because Fujifilm came with new technologies in photo production that were adapted by many customers who eventually left Kodak for Fujifilm.
Determine what other management differences have impacted the relative success of Kodak and Fujifilm.
Since their establishment, Kodak and Fujifilm have had much management differences aimed at increasing the competitive advantage of each company. Kodak concentrated in the market of digital imaging by installing digital print kiosks globally, also known as Kodak Picture Kiosk, offering online photo services (Kodak Gallery), introducing ink jet printer, and establishing other businesses such as Kodak health business. In addition, Kodak concentrated on direct selling and contracting distributors and retailers in U.S. The company also ensured growth by selling its products internationally, thus reducing dependency of profits in U.S. Kodak also strategically located its businesses neat talent pools, for example, the software business in Silicon Valley (Citigroup, 2005).
On the other hand, Fujifilm used a different management strategy from Kodak to market its products. In addition to its customers printing services and production of digital cameras, the company concentrated on other core businesses and ventured into other related markets. In 2006, Fujifilm was launched ignoring the name photo in order to make its customers discover new company foundation. To win the competitive advantage, management at Fujifilm used strong promotional and branding strategy by sponsoring marketers across the world. In addition, the company has an efficient financing that ensures high operations and high revenues. Fujifilm also offers differentiated product line up (it made its first move in OTUC) (Fujifilm, 2013).
Approach to ethics and social responsibility and their impact
Kodak Company has valued ethics and corporate social responsibility over years since its establishment. In the year 2005, the company donated its historic archives to Ryerson University in Toronto. In addition, the company has assisted the university by donating many materials on the history of photography. On the other hand, the United Stated Environmental Agency announced Kodak as the worst polluters in New York by releasing more than 4 million pounds of chemicals to the environment. Additionally, the United States Political Economy Research Institute, University of Massachusetts ranked Kodak seventh largest polluter (Citigroup, 2005). The following warnings have affected Kodak’s profitability because customers fear their products because they might cause harm to their health.
Fujifilm ensures its compliance to certain rules in order to maintain the firm’s social worth. In addition, the company fulfils its responsibilities as a member of a society towards its stakeholders and shareholders. The company upholds respect and protection of human rights using an international declaration and national constitutions. In addition, Fujifilm holds respect for one another and has no discrimination on grounds of ethnicity, religious, race or political backgrounds. The company also complies with the workplace health and safety and regulations designed to prevent workplace accidents. Unlike Kodak, Fujifilm ensures environment protection and has never been cautioned by environmental agencies. The good name of Fujifilm has made it attract more customers.
Discuss the extent to which management of both companies adapted to changing market conditions
Implementation of the current management approaches in both companies has made them adapt to the changing market conditions. Firstly, they have managed to broaden their market by focusing on research and development, and embracing digital technology and concentrating on marketing to non users. Secondly, the companies have implemented market diversification through concentration on the emerging economies, like in Brazil, Russia, and Africa. In addition, through diversification, Kodak and Fujifilm have developed economies in the digital imaging space. Thirdly, the companies have embraced Niche marketing through establishing price conscious consumer segment, low advertising expenditure, and investing on other similar businesses. Fourthly, both Kodak and Fujifilm have invested in world class customer centric digital products and infrastructure. Fujifilm has a program involved in promoting photography as a fun activity while Kodak has activities such as Kodak Moment of the Month, Photo Cards, free gifts and books (Fujifilm, 2013). All these features have made these companies adapt to the changing market conditions and attract more customers.
Recommendations
- In order to build in flexibility and back up decision-making process in order to adapt to the changing marketing conditions, each company should follow the following. Investing on products and services through providing cheaper online printing services, include online registration whereby customers can order for products online, and install kiosks at various malls offering instant photo printing. Secondly, the companies should focus on making their products available worldwide in order to attract the emerging markets. Finally, they should focus on promoting their products and services using various advertisement mediums such as social media, newspapers, televisions, billboards and websites.
- Conclusion
- Effective management and quality decision-making processes contribute to the growth and expansion of a firm (Toelken, 2011). The above analysis shows that Kodak never made appropriate decisions in strategizing their business operations allowing Fujifilm, a younger company to take over the industry. In order for an organization to back up its decision making process, there is a need to consider the dimensions of operational flexibility. Following this approach enables an organization to adjust its activities. Organizations like Fujifilm who understand the characteristics of changing market embrace change more effectively.
References
Citigroup. (2005). Eastman Kodak. Analyst Report Citigroup. Retrieved from:
http://www.martinfrost.ws/htmlfiles/oct2011/What-Went-Wrong-At-Eastman-Kodak.pdf
Fujifilm. (2013). Corporate History. Home. Retrieved March 1, 2014, from:
http://www.martinfrost.ws/htmlfiles/oct2011/What-Went-Wrong-At-Eastman-Kodak.pdf
Toelken, K. (2011). Understanding corporate life. Organization Management Journal, 8(1), 60-
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Larish, J, J. (2012). Out of focus: The story of how Kodak lost its Direction, New Jersey: Create
space publishers Gordon
