KODAK VERSUS FUJI CASE ANALYSIS

SITUATION ANALYSISKODAK
Situation Analysis #1 Combat Competition #2 Anticipating Market Changes #3 FUJI’S Future Growth Prospects #4 Challenges ahead of FUJI #5 Digital Integration Recommendations

• • • • • • • •

1976

Controlled 90% of the film market and 85% of camera sales in the United States. 1987-1992 Decreased in share of film market by 5% 1991 Launched the first professional digital camera 1998 Committed $1.2 billion to two joint ventures with the Chinese government 1999 Became number two in digital cameras in the United states with a 27% market share 2001 Launched “Where it all clicks” theme to stimulate digital imaging 2002 Launched the first mass-market product for digital film processing 2003 Controlled most photofinishing transaction in the United States with 15% unprofitable digital camera market
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The Battle for Global Market Share

Kodak Gallery Commercial – Live Forever
Situation Analysis #1 Combat Competition #2 Anticipating Market Changes #3 FUJI’S Future Growth Prospects #4 Challenges ahead of FUJI #5 Digital Integration Recommendations

3 Corporate Strategy

SITUATION ANALYSISKODAK
Situation Analysis #1 Combat Competition #2 Anticipating Market Changes #3 FUJI’S Future Growth Prospects #4 Challenges ahead of FUJI #5 Digital Integration Recommendations

• Kodak was founded in 1892 by George Eastman and Henry Strong • George Eastman gave the advertising line “You press the button, we do the rest” • Market Leader in US  Enjoyed Monopoly before the entry of its competitors • Sold cameras, films and other imaging products • Entered professional tape market for a brief period in 1980s • Largest supplier of photographic films in the world, for the amateur, professional, and motion picture market

4 The Battle for Global Market Share

Fuji Commercial (1990s)
Situation Analysis #1 Combat Competition #2 Anticipating Market Changes #3 FUJI’S Future Growth Prospects #4 Challenges ahead of FUJI #5 Digital Integration Recommendations

5 Corporate Strategy

SITUATION ANALYSIS- FUJI
Situation Analysis #1 Combat Competition #2 Anticipating Market Changes #3 FUJI’S Future Growth Prospects #4 Challenges ahead of FUJI #5 Digital Integration Recommendations

• • • • •

• • •

Founded in 1934, Headquartered in Tokyo, Japan. Leanest Japenese company Sold only branded products. Worldwide sales of $10 million (half Kodak’s size) Started serious competition with Kodak in 1984 by becoming the official film provider of the 1984 Summer Olympics in Los Angeles Growth Rate of 15% in 1993 Price was 20% below the price of Gold Plus brand Biggest Strength : They get the product to the consumers when they are ready to buy. Long term Strategy : Globalization through Localization
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The Battle for Global Market Share

vs
Similarities
Situation Analysis #1 Combat Competition #2 Anticipating Market Changes #3 FUJI’S Future Growth Prospects #4 Challenges ahead of FUJI #5 Digital Integration Recommendations

Contrasts
Fuji was a leader in the economy brands market while Kodak was not in the market at all initially Kodak ‘s marketing through advertisements was much heavier (in order to position the products in the minds of customers) – Kodak spent more than 4 times more on advertising than Fuji

+ Fuji and Kodak both sold only branded products + Offered super premium brands with a target market of professionals and advanced amateurs

-

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The Battle for Global Market Share

Situation Analysis #1 Combat Competition #2 Anticipating Market Changes #3 FUJI’S Future Growth Prospects #4 Challenges ahead of FUJI #5 Digital Integration Recommendations

KODAK VS FUJI OR US VS JAPAN???
DOMESTIC
• Kodak strategies were oblivious of the emerging domestic competition from Fuji. To worsen the situation, US masses were open to foreign products, subjected to price variations and the retailers responded favorably to foreign players for margins. • Fuji focused on distribution strategies and mastered its home market in terms of reach and innovation

8 The Battle for Global Market Share

KODAK VS FUJI OR US VS JAPAN???
Situation Analysis #1 Combat Competition #2 Anticipating Market Changes #3 FUJI’S Future Growth Prospects #4 Challenges ahead of FUJI #5 Digital Integration Recommendations

FOREIGN
• Kodak entered the competitors market as a reactive measure. It misread the distribution structure and was playing on domestic marketing strategies of retail system. It struggled in legal battles, not focusing on improvisation. • Fuji read the footsteps of retail chains, as prevailing in US markets and capitalized on its innovation and wider reach with cut throat prices.

9 The Battle for Global Market Share

How can Kodak protect its strategic advantage from competitors, especially Fuji?

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STRATEGIC ADVANTAGES OF FUJI
Situation Analysis #1 Combat Competition #2 Anticipating Market Changes #3 FUJI’S Future Growth Prospects #4 Challenges ahead of FUJI #5 Digital Integration Recommendations

• Fuji has the strength of being the innovator in developing one- time use cameras. • Fuji excelled in distribution strategy and mastered the tricks of trade in its home market, thru distribution channels and in US thru growing retailer chains. Kodak Failed miserably in above

11 The Battle for Global Market Share

STEPS AHEAD FOR KODAK
Situation Analysis #1 Combat Competition #2 Anticipating Market Changes #3 FUJI’S Future Growth Prospects #4 Challenges ahead of FUJI #5 Digital Integration Recommendations

• Invest higher in marketing talent and leveraging the existing market leader position in home market and dwell deeper in foreign markets. TARGET : the identified target as per Exhibit 6, is the developing economies, Indonesia, China, Russia and India. The untapped segment in terms of technology and distribution should be leveraged.

12 The Battle for Global Market Share

How can Kodak anticipate market changes faster and react accordingly?

13

KODAK- A Sinking Ship
Situation Analysis #1 Combat Competition #2 Anticipating Market Changes #3 FUJI’S Future Growth Prospects #4 Challenges ahead of FUJI #5 Digital Integration Recommendations

• At its peak, Kodak was an icon of American technology innovation. Now it's fighting to recover from a tech revolution that is strangling its core business. • Kodak was late to recognize the problem, slow to react, and then went down the wrong innovation path. • It faces many of the problems and is making many of the mistakes that any company can make when so threatened. Because of these delays and missteps, it's still far from clear how Kodak's story will play out.
14 The Battle for Global Market Share

How can Kodak anticipate market changes faster and react accordingly?
Situation Analysis #1 Combat Competition #2 Anticipating Market Changes #3 FUJI’S Future Growth Prospects #4 Challenges ahead of FUJI #5 Digital Integration Recommendations

Conduct various markets analysis, focus groups and markets surveys.

Invest in research and development that enables the photographic industry to stay current with consumer demand.

This would help out the firm to be aware of what actually the consumers demand. Its executives didn't anticipate how fast the digital cameras would become commodities, with low profit margins, as every competitor raced into the market.
The Battle for Global Market Share

Refocusing research and development on bigger, bolder ideas; accelerating investments in commercial markets; and acquiring other companies and technology to broaden Kodak's portfolio of digital products and services.
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Situation Analysis #1 Combat Competition #2 Anticipating Market Changes #3 FUJI’S Future Growth Prospects #4 Challenges ahead of FUJI #5 Digital Integration Recommendations

16 The Battle for Global Market Share

What are Fuji’s chances for future growth?

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Fuji’s chances for future growth
Situation Analysis #1 Combat Competition #2 Anticipating Market Changes #3 FUJI’S Future Growth Prospects #4 Challenges ahead of FUJI #5 Digital Integration Recommendations

• The chances of Fuji’s growth are really bright as they are providing the good quality of product with the lesser cost as compared to the market leader Kodak. • This can be supported as:  They have a price advantage over Kodak and are providing excellent products

18 The Battle for Global Market Share

Situation Analysis #1 Combat Competition #2 Anticipating Market Changes #3 FUJI’S Future Growth Prospects #4 Challenges ahead of FUJI #5 Digital Integration Recommendations

They have now enough users in the market to initiate any marketing or a promotional plan. They are innovating more than the market leader Kodak Their investment in the R&D sector has reaped a lot of benefits for them and will continue to do the same in future as well. They have a great distribution network They are always looking to satisfy the customer needs. They have started of with the digital technology which is the future of cameras and are concentrating hard on it.
The Battle for Global Corporate Strategy Market Share

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What are some disadvantages that Fuji has to overcome?

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DISADVANTAGES THAT FUJI HAS TO OVERCOME
Situation Analysis #1 Combat Competition #2 Anticipating Market Changes #3 FUJI’S Future Growth Prospects #4 Challenges ahead of FUJI #5 Digital Integration Recommendations

 Reactive Follower • Kodak Innovator – Fuji Imitator (Product and
process)

Fuji – substitute products for Kodak in Japan

 More emphasis on long term strategy  Neglecting areas like profitability • Fuji’s profits are low as of now

21 The Battle for Global Market Share

DISADVANTAGES THAT FUJI HAS TO OVERCOME
Situation Analysis #1 Combat Competition #2 Anticipating Market Changes #3 FUJI’S Future Growth Prospects #4 Challenges ahead of FUJI #5 Digital Integration Recommendations

 Kodak’s counter offense may lead to stagnant market share for Fuji.  Payouts have been far lower than Kodak.  Lower profits of Fuji when compared to Kodak leads to low performance in the eyes of the stakeholders.  Kodak is more diversified than Fuji.  Fuji as a brand is still not at par with Kodak in the US market.
22 The Battle for Global Market Share

Digital Integration into Silver Halide Industry- A matter of Concern?

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MARKET ANALYSIS
Situation Analysis #1 Combat Competition #2 Anticipating Market Changes #3 FUJI’S Future Growth Prospects #4 Challenges ahead of FUJI #5 Digital Integration Recommendations
Nikon 2 % Cannon 2 % Fuji 2 % Hp 2 % Olympus 2% 2 Us digital Camera market share Other 2% 2 2222

Sony 2% 2

Sony Kodak Olympus Hp Fuji Cannon Nikon

Kodak 2% 2

Other

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The Battle for Global Market Share

MARKET ANALYSIS
Situation Analysis #1 Combat Competition #2 Anticipating Market Changes #3 FUJI’S Future Growth Prospects #4 Challenges ahead of FUJI #5 Digital Integration Recommendations
2 22 2 2, 2 2 22 2 2, 2 2 22 2 2, 2 2 22 2 2, 2 1 11 1 1, 1 2 22 2 2, 2 2, 2 22 2 2, 2 22 2 22 22 Film 22 22 Digital image captured 22 22 Digital image printed 11 11

Increasing

Decreasing

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Situation Analysis #1 Combat Competition #2 Anticipating Market Changes #3 FUJI’S Future Growth Prospects #4 Challenges ahead of FUJI #5 Digital Integration Recommendations

Traditional Photographic 1.1
Image Capture

STRATEGIC ISSUE (DYNAMICS OF DIGITAL IMAGING)
Development Printing

Digital Imaging
Image Capture Digitization Storage

Retrieval Transmissi on Printing Manipulati on Projection

26 The Battle for Global Market Share

RECOMMENDATIONS
Situation Analysis #1 Combat Competition #2 Anticipating Market Changes #3 FUJI’S Future Growth Prospects #4 Challenges ahead of FUJI #5 Digital Integration Recommendations

• Discontinue unprofitable products – Disposable camera – Consumer film and camera • Focus on high potential products – Consumer digital camera – Kiosks and mini-lab – Online services such as photo printing and sharing • Emphasize on niche market i.e. medical market and professional photography
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THANK YOU

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