Kodak and Fujifilm Companies Comparison

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Abstract

The imaging and film industry has grown rapidly over the last five decades. Two of the major players in the industry include Kodak and Fujifilm. The two companies apply different management, and Corporate Social Responsibility (CSR) approaches that have varied influences on their profitability. Fujifilm has expanded to dominate the industry through innovation and diversification into different businesses. Kodak’s poor leadership and inability to adapt to change resulted in its bankruptcy in 2012. Fujifilm’s profitability is evident from its elaborate CSR approach and ability to innovate. In order to embrace innovation, Fujifilm invests in research and explores different sectors and businesses. In contrast, Kodak avoids diversification and instead forms partnerships with companies that produce related products.

Introduction

Kodak is an American technology company that provides services such as functional printing, packaging, digital printing, enterprise and graphics, commercial films, entertainment, and graphic communications (Hill & Jones, 2012). The company is famous for photographic film products that contributed to its domination of the film making and photography industries. On the other hand, Fujifilm is a Japanese photography and imaging company that sells products that include optical devices, printers, color paper, medical imaging equipment, photocopiers, photofinishing equipment, and high display materials (Hill & Jones, 2012). Both companies apply different management approaches that affect their willingness to innovate. In addition, they pursue different CSR approaches that have varied effects on their profitability.

History and core business of each company

Kodak was created in 1881 and was originally known as the Eastman Dry Plate Company (Hill & Jones, 2012). The company changed its name to Kodak after introducing a new type of camera that was branded with the name Kodak. The company initially focused on developing new methods of film development, printers, and imaging units (Muehlhausen, 2013). Later, the company decided to focus more of its resources on commercial markets. The history of Fujifilm dates back to 1934 when it was started (Peres, 2014).

It was the first producer of photographic films in Japan. As the company expanded, it incorporated innovation into business operations. Over the decades, Fujifilm has ventured into both consumer and commercial sectors of the film development and imaging industry. Its core businesses include the production of optical devices, printers, color paper, medical imaging equipment, photocopiers, photofinishing equipment, and high display materials (Muehlhausen, 2013). Fujifilm has been named the largest film and imaging company in the world based on its market capitalization and presence in different countries (Hill & Jones, 2012).

Management approaches that facilitate innovation

Kodak has sold many of its products and patents that had propelled it to world domination in the film and imaging sector. On the other hand, Fujifilm has continued to create more innovative products, improved their original products, and diversified their business ventures beyond film development (Muehlhausen, 2013). Today, Kodak focuses its business ventures in the fields of science and digital imaging.

The company embraced this approach after filing for bankruptcy. During that period, the company’s management implemented several measures that reduced costs of operation, business ventures, and the number of employees (Muehlhausen, 2013). It terminated its division of camera business for consumers and sold several patents to interested companies. In addition, it sold its online photo service and gave away its Personalized Imaging and Document Imaging business. This business venture was taken over by the United Kingdom Kodak Pension Plan (UKKPP) that was its greatest creditor (Muehlhausen, 2013).

After acquiring the business from Kodak, its name was changed to Kodak Alaris (Peres, 2014). After this incident, Kodak’s innovation efforts were thwarted. Reducing the rate of innovation was a good move that enabled Kodak to get back on its feet and continue operating despite filing for bankruptcy. In order to improve productivity and efficiency, the company reduced the number of its products in the market (Peres, 2014). This enabled the company to focus its resources and adapt to the rapidly changing technology that had been introduced into the film and imaging industry. Kodak decided to help photography enthusiasts by developing digital photo services to help customers manage personal image libraries effectively. This move was aimed at reinventing the company after its core businesses were affected by globalization and rapid technological shifts (Peres, 2014).

The innovative approaches applied by Fujifilm have certain similarities to those applied by Kodak. The company has numerous services and products that embrace innovation. For instance, its skincare and biotechnology products are based on the intensive application of innovation (Peres, 2014). The company offers its services in medical diagnostic systems, tablet devices, touch-sensitive screens for mobile phones, highly-improved lenses used in space exploration, and graphic systems used in streamlining the production of films (Hill & Jones, 2012).

Like Kodak, Fujifilm uses the management approach of diversification in order to embrace innovation. Its services in the production of cosmetics and pharmaceuticals show prove of this approach. In addition, contributing to pace exploration is another avenue for the company’s innovative products. Their innovative products are spread across six fields of business, namely digital imaging, healthcare, highly functional materials, graphic systems, document solutions, and optical devices (Peres, 2014).

Impact of other management practices to the company’s success

Kodak has adopted a new management approach that involves forming partnerships with other companies to expand the market for its products (Muehlhausen, 2013). In past years, Kodak did everything for itself and rarely formed partnerships with other companies. For instance, it entered into a partnership with Motorola to supply chips that would aid in operating cameras ingrained in Motorola phones (Peres, 2014). Kodak had to break away from its past principles in order to survive. On the other hand, Fujifilm invests heavily in research and development that enables them to create new products in diverse fields (Hill & Jones, 2012). For instance, the company makes Synapse Radiology PACS that are used in the medical field. Fujifilm explores any sector that has the potential for growth and innovation (Peres, 2014).

Approaches to ethics and social responsibility as well as their impact on profitability

As part of its social responsibility, Kodak is involved in the Electronic Industry Citizenship Coalition (EICC) that aims to improve the working conditions in various industries (Muehlhausen, 2013). This includes improving worker safety, enhancing the treatment of workers, and reducing the environmental impact posed by manufacturers.

On the other hand, the company has several sets of standards that its suppliers are required to follow in order to enhance environmental conservation. Only suppliers and manufacturers that meet Kodak’s environmental conservation standards are offered contracts. These approaches have greatly improved the company’s bottom line due to the increased number of customers who are pleased with its environmental conservation efforts. Fujifilm’s CSR approach is very elaborate. It is based on six policy areas that include biodiversity, social contribution, environment, occupational health, procurement, and safety (Muehlhausen, 2013).

Maintaining the trust of stakeholders and protecting the environment are core aspects of Fujifilm’s CSR approach. The company has an official Code of Conduct (COC) and the Charter for Corporate Behavior (CCB) that directs the activities and actions of all employees in order to ensure that they follow their CSR guidelines and goals. All employees are committed to the attainment of Fujifilm’s CSR goals in exciting their goals. Fujifilm’s approach is more profitable than Kodak’s because it takes care of the welfare of employees, the environment, and consumers

Adaptation of management to changing market conditions

Fujifilm is committed to synergistic management with all members of the Fujifilm group of companies in order to optimize growth and facilitate change (Peres, 2014). The company has a lean management structure that is integrated into the overall structure of Fujifilm Holdings Corporation. High investment in research and development facilitates the identification of opportunities and new technologies that are important for adapting to market changes (Hill & Jones, 2012).

The company is able to adapt easily to changing market conditions because its governance policies aim to increase corporate value and promote ethics as well as accountability among employees and other stakeholders (Muehlhausen, 2013). On the other hand, Kodak’s management is not well suited to changing market conditions. This is evident from past incidences of the adverse effects of emerging technologies on the companies’ competitiveness and sustainability efforts. Today, Kodak invests little in research and development (Peres, 2014). In addition, the company’s management is wary of diversification into other businesses. This has affected its profitability and ability to adapt to changing market conditions.

Recommendations

Three ways that companies can use to improve their ability to adapt to changing market conditions include investing in research and development, constantly improving the value of services and products, and implement change based on the needs and objectives of the company. Market research and development will ensure that companies invest in products that customers need and improve the value of their lives (Hill & Jones, 2012). Improving the value of products and services will ensure that a company gets rid of products that fail to satisfy the needs of customers. Customer satisfaction is critical to the sustainability of any company. Extensive analysis of problems and challenges ensures that a company is more flexible with regard to making decisions (Hill & Jones, 2012). Readiness to implement change is also very important.

Conclusion

Kodak was the pioneer in the film development and imaging industry. However, due to poor leadership and inability to adapt to change, the company filed for bankruptcy in 2012. On the other hand, Fujifilm embraced innovation, diversification, and good management practices to conquer the photography and film development industry. Kodak sold many of the products that had propelled it to world domination in the film and imaging sector. On the other hand, Fujifilm has continued to create more innovative products, improved their original products, and diversified their business ventures beyond film development into other fields.

Kodak’s CSR approach includes improving worker safety, encouraging better treatment of workers, and reducing the environmental impact of manufacturers. In contrast, Fujifilm’s CRS approach focuses on three main areas that include biodiversity, social contribution, environment, occupational health, procurement, and safety. Adapting to change is an integral aspect of enhancing a company’s ability to deal with changing market conditions. In order to accomplish that, companies should invest in research, link change to their future goals, and constantly improve the value of their products and services.

References

Hill, C., & Jones, G. (2012). Strategic Management: An Integrated Approach. New York: Cengage Learning.

Muehlhausen, J. (2013). Business models for Dummies. New York: John Wiley & Sons.

Peres, M. R. (2014). The Focal Encyclopedia of Photography. New York: Taylor & Francis.

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