Assignment 1: Kodak and Fujifilm
Denise A. Garrett-Cahill
Dr. Valery Shumate
BUS302 Management Concepts
February 1, 2013

Abstract
Kodak and Fujifilm shared the market of photographic films, digital cameras, supplying various products for the photography sector, and medical imaging equipment. Over time both companies had to come up with new and improved products that would keep the consumers wants and needs satisfied. Both companies had their very own style of management, which allowed them to advance with the innovation of new and improved technology. Kodak, until recently was the leader in the photographic and film market, with Fujifilm trailing by just a small margin. When it comes to ethics and social responsibility the companies are for the most part on the same level, but have some differences. Adapting to the changing market conditions affected each company’s management differently in many ways, and affected the growth and innovation process for both companies. After researching both companies the determination that all companies should be diversified in some way, in order to keep up in the changing market and economy, is crucial for growth and success.

Since 1879 the world of photographic business has been growing and expanding across the world. Some of the most commonly heard photographic industry names include Kodak and Fujifilm. The founder of Kodak, George Eastman, went to England to try to get a patent on his plate-coating machine in order to make the photographic process simpler for many different people(Brooke_Ball, 1994). The plate-coating machine was one of the earliest ways to easily create the dry plate, or unexposed film. From the years 1883 to 1888 Eastman took the photographic industry by storm when he presented the first film available in rolls and the first Kodak camera. The expression “You Press the Button, We do the rest” was a common Kodak advertising slogan in the 1890s (George Eastman). In 1901 the Eastman Kodak Company of New Jersey was formed according to New Jersey state laws and still holds that name today. The Kodak Company continued to follow its core business of the photography industry for the common person while on the other hand, Fujifilm’s core business of the photography industry started off along the lines of cinematic film productions. In 1934 Fuji Photo Film Company was launched with the core business focus of motion picture film production. Their product line also included dry plates and photographic paper, and in 1936 the company introduced its first film as an independent from their original Japanese cinematic film manufacturer the Dainippon Celluloid Company. (Fuji Photo Film Co., Ltd. History) Since then, they have changed the name to Fujifilm Corporation, but kept the same core business focus of big industries rather than the average person. While Kodak and Fujifilm have been each other’s competitors in the photographic film industry for almost a century, Fujifilm’s success is due to their product diversity, global expansion, and adaptability.
The first step of growing as a company is to be able to have diverse line of products available. Kodak began using the Human Relationship management approach. The company’s main focus was to provide the common person with the ability to keep memories and be able to process the pictures at a reasonable cost. George Eastman accomplished this task by performing many experiments which led to providing simple cameras that held roll film. Kodak realized that amateur photography would be begin to expand, so he continued to upgrade and improve the film, and cameras for use by the common person. Kodak over the years created many versions of cameras and film for use in the public sector (George Eastman). Kodak continued to perform experiments, and during the war time decided to do his part, and shifted the focus from providing the common people with cameras and film, to providing the government with a chemical that would make the wings on aircraft waterproof, and providing them with special cameras that would be able to take aerial views of the battlefields (Brooke_Ball, 1994). Kodak’s management approach changed many times to achieve positive ethics and social responsibility by constantly improving and backing his products quality. In the beginning George Eastman realized how important reputation was, and when the plates he invented were being returned by the consumer because they were faulty, he replaced all of the plates at no cost to the consumer. This was quite a setback for the company’s profit margin, but he wanted to make good on his product. Eastman believed that by doing this, it would benefit the company and the industry in the future. Kodak would have been more successful like Fujifilm, if the company would have invested some of its profits to improving the product, instead of sharing it with employees, and making very large donations to several different learning institutions. Fujifilm on the other hand, started out using an operations management approach. They already had an established workforce, as well as a factory, and their main concern was to invest money to hire chemists that would perform experiments for new innovations. Quality proved to be quite a challenge for Fujifilm, and because of this they had to focus on improving the emulsion technology in order to provide adequate materials to gain the confidence of the buyers so the desired image would be achieved from Fujifilm’s products. In 1936 after using outside consultants and completing their own internal research, Fujifilm independently introduced its first film, as well as a motion picture negative (Fuji Photo Film Co., Ltd. History). This is what aided in Fujifilm gaining the confidence of the consumer as being a technically innovative company. Fujifilm decided to change its management approach to a scientific one. Fujifilm had several factories, and the innovation that allowed their specialists to begin improving the efficiency of its manufacturing of film, while expanding their focus to other endeavors that expanded beyond the photo film industry.
The second step for a company’s profitability would be to include global expansion to the long-term plans. George Eastman realized very early that the only way for his product sales to grow was to expand his products internationally at a nominal cost to the consumer, and to advertise the simplicity of photography for the amateur. The company’s profits increased after Kodak expanded and opened a sales office in London to promote their product line. Shortly thereafter, Kodak constructed a factory just outside of London to enable amateur photographers to obtain cameras and supplies locally at a price that the general public could afford (Building the Foundation). Kodak’s goal was to make products available around the globe to everyone. Kodak realized that to keep up with other companies, he would have to apply scientific management to his company plan. He accomplished this by investing his money in hiring the proper employees to conduct research and experiments to improve on the products that were currently available. He found Dr. Charles Mees, who was the director for a small photographic firm, and now only hired him on, but purchased the company as well (Brooke_Ball, 1994). This allowed Kodak to expand its research, and from that research came up with a high contrast X-ray that expanded Kodak’s newest innovations to the commercial industry. Kodak was all about taking care of its employees, and gave the employees the opportunity to think of new and improved products, and how to make production of products more efficient. Kodak started a bonus program that as the company’s profits increased the employees would reap the rewards for the hard work and contribution to the success of Kodak. When photography went digital Kodak was not prepared for how quickly this would occur, and had to rely on acquiring a partner that would enable them to print digital photos. They believed that with the company’s reputation, they would be able to partner with, or invest in other companies to maintain the lead in the photo industry. They fell short in providing the consumer with a method for retrieving digital prints. Kodak could have increased their presence internationally, if they would have followed Fujifilm’s administration style of management. Fujifilm’s upper management was set on the idea of expanding the company’s focus to accommodate the increased wants and needs of new and improved products, not only in Japan, but world-wide. It was this that triggered Fujifilm to change its focus from manufacturing, to performing research on creating faster film speeds and developing magnetic products (Domestic and Overseas growth). This expanded the company’s focus from the photography industry to creating computer discs, blueprints, and surpassed Kodak in the introduction of film with faster speeds. The success of these inventions, encouraged Fujifilm to acquire still more chemists, and began the process of automating the production of the products they already had. This would allow their employees to be flexible in many different areas, and increase productivity. When the photo industry went digital Fujifilm was able to adapt, because it had researched and developed machines that would turn digital images into photos, without having to rely on an outside source to produce them. This gave Fujifilm the advantage in the digital film industry, and allowed them time and resources to concentrate on expanding the focus of the company. Fujifilm invested the profits from its current product line to research and develop many products outside of the photo film industry, which in turn would increase the focus and diversity of the company’s current product line. Fujifilm has been able to continue to increase its profits, by making the transition from producing only photographic products, to expanding the company’s focus to many other areas, such as medical imaging equipment, LCD panels for computers, exploring how chemicals and the human body react, and just recently they have expanded even further into the skin care and cosmetic industry (Osawa, 2012). Fujifilm, more so than Kodak, showed that they had the ability to adapt to the changing markets.
The third step of a company’s profitability would be to include adaptability in its management structure. Kodak showed that they adapted to the times, when they first started out, it was a one-man company, and as the increase in product needs arose, Kodak made sure that the company was able to meet the demand. George Eastman acquired a partner, to assist him in funding the day-to-day operations of the young company. As the demand continued to increase, so did Kodak’s expansion. Kodak believed that its employees were a key part in the business, so he came up with rewards for his employees based on the profits of the company, which in turn increased the productivity of the employees. Kodak realized that in order for the industry to flourish he would have to rely on educating the younger generation. He gave large amounts of donations to help fund the development of many schools, and hired some of his employees from those schools (Brooke_Ball, 1994). Kodak had some very unique ways of adapting to the changing market, for instance Kodak felt that its reputation alone would allow them to grow and expand in the changing times. Kodak’s main product line, unlike Fujifilm’s product line, was still geared mainly to the photographic industry, and this limited the company’s ability to adapt successfully in the rapidly changing market. Fujifilm, from the very beginning realized that they had to adapt to accommodate many challenges. When the currency began to fluctuate, Fujifilm had to adapt and expanded the development of manufacturing facilities elsewhere (Domestic and Overseas growth). This actually made the company more confident with its competition, because they had several locations and didn’t have to worry about currency fluctuations as much. Fujifilm believed that research and development was a key factor in being able to adapt to the changing market. It displayed this, by beating out the competitor on timely advancements in the photo industry. Fujifilm was able to adapt to the rapidly growing photo industry, because since the start, they invested strongly in keeping up to date on new technology which improved the operation and profitability of the company. This allowed Fujifilm to surpass Kodak because Fujifilm expanded its research in other areas, which provided them with product flexibility.
Flexibility is a very important step in a company’s ability to adapt when changing market conditions occur. One way a company can build flexibility in the decision making process, would be to have a back-up plan for the decisions it makes. The Company must be able to quickly respond to market conditions that would force them to alter the original plan that they had set. This would allow them to have in place a secondary plan to fall back on. Another way a company can build flexibility would be to perform market research on a regular basis, and the company must be able to adapt to the changes in the current market. Market research provides companies with information of what the current trends are, and the wants and needs of the consumer at the present time, and in the future. Companies in general need to “look outside of the box” and have secondary uses for their products or ingredients that they manufacture. This will allow companies to use their current merchandise for manufacturing a different product if needed. Companies must keep all of their options open, and make investments in several different industries in order to succeed in our market which is constantly changing. In close I have determined that Fujifilm’s success outweighed Kodak’s, because they kept an open mind about the resources they had, and did not limit the use of the technology and resources to only the photography sector in the market place. Instead Fujifilm expanded their company focus to many different applications for the chemical expertise that they researched and developed over the years.

References
Brooke_Ball, P. (1994). George Eastman and Kodak. Great Britian: Exley Publications Ltd.
Building the Foundation. (n.d.). Retrieved from www.kodak.com/ek/US/en/Our_Company_History_of_Kodak/Building_the_Foundation
Domestic and Overseas growth. (n.d.). Retrieved from History of Fuji Ohoto Film Co., Ltd- Funding Universe: www.fundinguniverse.com/company-histories/fuji-photo-film-comp-ltd-history/
Fuji Photo Film Co., Ltd. History. (n.d.). Retrieved from early history: www.fundinguniverse.com/company-histories/fuji-photo-filmcomp-ltdhistory
Fujifilm Global. (n.d.). Retrieved from Fact Sheet: www.fujifilm.com/about/profile/fact_sheet/
George Eastman. (n.d.). Retrieved from Kodak.com: www.kodak.com/ek/US/en/Our_Company/History_of_Kodak/George_Eastman.htm
Health. (n.d.). Retrieved from Broadening the Impact of Pictures: www.kodak.com/ek/US/en/Our_Company/History_of_Kodak/Impact _of_Pictures.htm
Osawa, K. I. (2012, January 20). Fujifilm Thrived by Changing Focus. The Wall Street Journal.