Kodak and Fujifilm

BUSINESS MANAGEMENT AND MARKETING: KODAK AND FUJIFILM COMPANIES Name Institution Affiliation Course Date of Submission Kodak and Fujifilm Kodak and Fujifilm firms have responded to challenges they face from transformation and the evolution of technology that has threatened their traditional management styles for them to be successful. Kodak has gone through a transition phase in 1980s due to introduction of new technology in photography industry specifically the digital photography. Although it is Kodak that developed the many components of digital technology, it did not embrace this invention seriously paving way for its rival in the industry Fujifilm to penetrate in the market rapidly affecting impacting Kodak’s business. This essay will explore the challenges that these firms have faced and their responses to change in order to continue in operating in the industry. Eastman Kodak Company was fully developed in 1888 making it to become a household name after replacing the glass photographic plates with a roll of film which become a success. The guiding principle of Kodak after its invention of the film was mass production at low cost and international distribution focusing on customers through continuous research. The advent of color technology increased success to Kodak Company making it an industry standard by 1963. The company saw increased revenues due to increased product lines and introduction of new products (Finnerty, 2000). The company was able to capture the majority of the US film and camera market since it had the knowledge and processes for success. Kodak got a distinctive competency over its competitors given its scale and operation of its business making it to attain growth for more than 90 years then. The period of 1980s is when the company encountered problems of its market share, revenues and explosion of technology which threatened its survival in the business. The decline in sales of Kodak was attributed to the fierce competition from Fujifilm since Kodak had reluctantly developed the digital technology which saw its demise in the industry. Fujifilm competed head to head with Kodak becoming its main rival globally. Kodak held the largest share in the US while in Japan Fujifilm was having the largest market share. Kodak was not able to penetrate the Japan market arguing there were strict government regulations doing business thus, Kodak was unable to improve stock value and make sufficient returns to shareholders. The shares of Kodak began to plummet while those of Fujifilm started to grow substantially gaining a 17% market share in the US while Kodak market fell by 10%. Kodak had underestimated Fujifilm in its US market costing it greatly on its market share ( The Economist, 2012). Through the persistent battle of the two firms, Kodak suffered severely from digital technology because of failure to create a workable succession plan paralyzing future success. Fujifilm was founded in 1934 in Japan and entered the US market in 1964 as a supplier of label films forming a subsidiary in 1965. Fujifilm from the beginning of its inception was focused on offering quality and innovative products to US consumers. Fujifilm developed new home movie system but Kodak introduced a system that could not use Fujifilm format. This made Fujifilm to shelve plan of introducing new products to the US market making a strategic approach of following Kodak lead to avoid attracting attention to Kodak for retaliation (Yuzawa, 2012). The Fujifilm Company focused on adopting strategies to gain shares of the weak US market rather than competing with Kodak for new product development. Kodak underestimated Fujifilm in the US market during its initial years of entry that ended up in making Fujifilm the main rival in the film market. Fujifilm was able to build a 10% market share and its market share continued to grow rapidly to 17 % in five years. Fujifilm intensified its efforts to gain the US market share establishing a plant which significantly brought prices down. In the 1990s Fujifilm became the second largest in photographic film and paper after Kodak challenging Kodak dominance in the industry. Kodak had overcome many threats during its long history for its business to survive turning it into one of the most recognizable brand in the film industry in the US, but entrance of its competitors saw the firm struggling to maintain its market share. Fujifilm entry to the US market attained a significant market share since it was able to offer quality products at a lower price to consumers than Kodak Company. This was a big problem since the company was not able to edge its competition and get part of its market share due to the rising competition on the photographic products making Kodak to cut in revenue so as to lower prices and remain competitive. While Kodak Company was suffering, its rival Fujifilm was thriving though they had more in common. The companies enjoyed near monopoly in their parent countries markets. Kodak was determined to keep off Fujifilm products from the US market but its traditional busi...