A Management Comparison of Kodak and Fujifilm

BUS302

A Management Comparison of Kodak and Fujifilm

Description of the History and Core Businesses Both Kodak and Fujifilm will be examined to identify the similarities and differences in their business successes and failures. Each business will be analyzed to develop a more complete understanding of how the businesses were formed and the paths each has followed to arrive at their current market positions.
Kodak
Eastman Kodak was started in 1888 when the first Kodak camera introduced and was available for sale to the public. The company was started by George Eastman in Rochester, NY, when Eastman was in his mid-twenties. George Eastman grew up poor and was a high school dropout, but that did not stop him from making money and supporting his widowed mother and two sisters by the time he was 14 years old (History of, 2013). When Eastman was 24 years old, he had planned a trip to Santo Domingo, and had an idea to record the trip. Eastman purchased a large, heavy camera that was as big as a microwave (History of, 2013). Eastman never made the trip to Santo Domingo, but he did become obsessed with photography, and how he could make it simpler to understand. Before Eastman Kodak was formed, George Eastman had started a company, making dry photographic plates, which later lead to the idea of a convenient, simple to use camera that would become known as the Kodak. After the Kodak camera was introduced in 1888, the young company quickly grew. Eastman was big on advertising in newspapers, and periodicals, and he even made up his own phrase for the company, “You press the button, we do the rest” (History of, 2013). By 1897, Eastman Kodak was being advertised all over the world and would eventually become a major corporation. In 2012, Eastman Kodak filed for Chapter 11 Bankruptcy, and had to start a re-organization which changed much of the way that Eastman Kodak conducts commercial business (History of, 2013).
Fujifilm
Fujifilm was established in 1934 in Japan. The company was started based on a Government idea to become involved in the photographic film manufacturing industry (History, 2013). One month after Fujifilm was started it began producing photographic film, photographic print paper, dry plates, and other photosensitive material (History, 2013). From the time Fujifilm was established in 1934 to the present day, the corporation has branched off into many countries around the world. Throughout the decades Fujifilm has transitioned from not only manufacturing photographic film, but also manufacturing products and doing research in the medical, scientific, and cosmetic industries. Fujifilm is now known as Fujifilm Holdings Corporation and is considered to be the largest photographic and imaging company in the world.

Comparing and Contrasting Leadership and Management Styles The management of each business has made key decisions to enable their respective businesses to remain competitive in a constantly evolving business world. To obtain greater insight into how each business has reacted to the environmental changes, the leaders of each business will be briefly examined to obtain greater insight into how these leaders have been able to deal with technological innovation that provides opportunities for their original business lines.

Kodak George Eastman definitely had a great business mind and used four basic principles to build Eastman Kodak. The four principles were: mass production at low cost, international distribution, extensive advertising, and a focus on the customer (History of, 2013). To go hand in hand with the key building principles, Eastman also implemented some key policies, such as, foster growth and development through continuing research, treat employees in a fair, self-respecting way, and reinvest profits to build and extend the business (History of, 2013). After Eastman died in 1932, there was a gradual change in the leadership and management styles of Eastman Kodak. I researched some articles that focused on the downfall of the company due to missed opportunities that should have been taken advantage of many decades ago. One article researched, titled, “How Kodak failed”, gave details from former Kodak employees about the critical mistakes that top management made regarding a change in technology. In 1975 a Kodak Engineer named Steve Sasson developed the first digital camera, and ironically that digital camera technology would be directly responsible for the decline of Eastman Kodak over the next few decades (Mui, 2012). After the digital camera was introduced, Top Management for the company pretty much thought of filmless photography as being, “cute”, but did not want waste too much time on expanding the technology. In turn, Kodak’s Managements failure to see digital film technology as anything but cute would be the main reason that Kodak would have to file for bankruptcy in 2012, and its film based business model would come to an end (Mui, 2012). Most of the information from the Forbes article that I researched was provided by a former Kodak Executive named Vince Barabba. In 1981 Vince Barabba was an Executive in charge Market Intelligence, and had been conducting research on digital photography versus silver halide film. The results of the research showed that digital photography had the potential to replace Kodak’s established film based business, and that transition would not probably happen for another ten years (Mui, 2012). I think Top Management in Kodak was reluctant to change and prepare for an innovation disruption that digital photography technology would eventually bring to the industry. For many decades Kodak was the giant in photographic film sales, and the leaders of the company always thought that it would be that way.

Fujifilm The management style of Fujifilm is somewhat different from the style of Eastman Kodak in the sense that Fujifilm has grown and thrived since the company was established. Top Management for Fujifilm was continually pushing innovation and researching ways that the company could expand its global reach and be profitable in the future. Kodak was strong for many years, but when top management had an unwillingness to make changes for the future, after they had information that digital filmless photography would be the innovative disruption in years to come, they sealed their own downfall. Fujifilm management had a willingness to make changes and did so, by getting away from film manufacturing, and developing new products, and new business. Simply put, Fujifilm management developed long term strategies and executed the plans for their long term success, when at the same time Kodak management assumed that they would always make big profits in photographic film sales. The present day results of each companies style has landed Fujifilm as a massive profitable company that is still growing, and Kodak with a recent bankruptcy filing, and no longer involved in the film business model.

Management Successes

Kodak Management successes started right away for Kodak. With the guiding principles that George Eastman established, Kodak was able to be recognized world-wide within a short amount of time after being established. Success continued for many decades with Eastman Kodak being the powerhouse of the photographic film industry. Even though Kodak sat on the digital filmless photography technology, instead of using it to their advantage, the company does have the success credited to them for the invention of digital photography in 1975. Now Kodak has a bankruptcy associated with the company history, and all the great things that Kodak did since the 1800’s seems to be forgotten because the business and consumer world will focus on what lead to Kodak’s demise. Now it is up to Top Management to successfully restructure Kodak so that the company may one day be profitable again, and be a top competitor in the photographic technological field.
Fujifilm
The success of Fujifilm can be mainly associated with Management’s flexibility to be innovative and venture into new technology, which has put the company at the top of the photographic industry since its founding in 1934 (K.N.C., 2012). When Fuji realized that digital photography would be the way of the future, the company went through some changes to get away from the same type of mindset that Kodak was stuck on. Fuji still went through a number of years of losing profit because of making film manufacturing and sales its main business, but eventually Top Management had to execute new strategies. Through the 1990’s to present day, Fuji has made some remarkable strides to become the leader in many areas of photographic and other technologies. Fuji Management has made successful business moves such as, going into business with Walmart with the installation of digital imaging Kiosk in the stores (K.N.C., 2012). In 2000 Fujifilm also spent an additional 1.6 billion dollars to have an additional 25% stake in FujiXerox, which is part of a joint venture with Xerox (K.N.C.). Fujifilm has also had great success in the medical imaging equipment business, which is a division of the company that continues to grow very rapidly. As you can see, Fujifilm Management decisions have put the corporation in a position to remain profitable and flexible for many years to come.
Comparison of Business Ethics and Social Responsibility

Kodak In 2004, Kodak was ranked 58th out of the top 100 companies surveyed for the listing of, “Best Corporate Citizens”. This acknowledgement was given by Business Ethics Magazine, and according to the article, Kodak had been in the running for 5 years (Business ethics names, 2004). Some of the areas that Kodak was recognized for were for the company’s anti-discrimination policies, and its fair treatment of women and minorities (Business ethics names, 2004). From a social responsibility standpoint, Kodak contributes to, and supports a number of community organizations such as, the United Way, museums, cultural facilities, and performing arts organizations (Community affairs, 2013). The only negative aspect of poor social responsibility that I can attribute to Kodak, would be from the years of poor management decisions to waste money on a division of the company that was on a major decline. Kodak did not prepare for the future, and ended up having to file bankruptcy, which tarnishes the company image due to not being fiscally responsible. Hopefully, Kodak management has learned from the mistakes of the past, and will one day be a valuable, respected brand.

Fujifilm Fujifilm is very active in its social responsibility to protect the environment. The company started an assessment called LCA (Life Cycle assessment), which measures the environmental impact of all the materials used to make products (Green policy, 2013). The assessment also involves monitoring the process of manufacturing and transportation of all the products, and the proper disposal methods by all users. The assessment allows the company to know how much of an environmental burden is caused by all of these processes, and how the burden can be reduced (Green policy, 2013). Fujifilm has very detailed and structured procurement guidelines, which guides the company to follow positive ethical behavior. Some of the areas the guidelines cover are; dealing with trustworthy and reputable suppliers, communicating with society at large with active and transparent disclosure of company information, and creating a safe, diversified, and comfortable workplace for employees (Procurement, 2013).

Management’s Ability or Inability to Adapt to Changing Market Conditions From what I have researched and wrote about in this paper, Kodak Management was very successful with building a strong brand name in the early stages of the company, but for the most part, I would have to say that Kodak Management had a great inability to adapt to changing market conditions when the signs were present for them to make changes for the future. That inability led the company to a steady decline, and eventually a chapter 11 bankruptcy filing. On the other hand, Fujifilm Management realized that a major change was coming that would eventually phase out the use of photographic film. Fuji Management made the necessary changes to prepare for the future market conditions, and their ability to do so paid off. Fuji Management displayed the true value of innovation, strategy, and execution compared to Kodak Management’s non flexible way of thinking.

Three Recommendations for Increased Flexibility in Decision Making In order for Kodak to eventually come out of chapter 11 bankruptcy and be profitable in the photographic field again, Management will have to be more flexible in the way they make decisions. I think that Kodak will have to constantly think of innovative ideas to meet the future technological demands by society. Instead of chasing existing technology, Kodak needs to research and develop their own technological ideas that will stand out from what other companies produce. Finally, Kodak Management will need to be more open to the ideas that their employees present to them, not have a major technology such as the digital camera invented and then hide it because money was still being made with film technology. It is hard to come up with three recommendations of increased flexibility for Fujifilm because the company is in the strong position it is in now due to flexible thinking by management. Fuji needs to continue to expand its technological advances in the medical equipment field. Fuji Management should also continue to conduct innovative research in what the future will demand in the area of photography technology.

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