KODAK & FUJI

Presented By:Divya Aggarwal

EASTMAN KODAK COMPANY

• Introduction• multinational & a diversified manufacturer of photographic

imaging equipment• Founder – George Eastman• Founded in April 1880• Pioneer in:

– Portable camera (1888) considered as the birth of snapshot photography

– Slogan “You push the button, we do the rest.”– Eastman’s commitment bring photography to the greatest

number of people at the minimum cost.• Provide a fully integrated photographic service supplying the

camera and film through to processing and printing.

Highlights

• In 1997 its USA market share was 70%,japan share 7%-9%,world wide share 44% ,pioneering of inexpensive camera and easy to use ,

• In 1994, Kodak launch a single use camera called falcon which was awarded as best photographic product in Japan.

• In 1984,kodak sponsored ABC TV broadcast

• In 1980’s introduced the Ektachem 400 blood analyzer &faced

intensifying Japanese competition in photography , launch

waterproof disposable camera , launch concept called minilabs ,

panoramic disposable camera.

• Founded in 1934 • Fuji Photo Film had its headquarters in Tokyo,

Japan•  In the 1940s, Fuji Photo entered the optical

glasses, lenses and equipment markets.•  After the Second World War, Fuji Photo

diversified, penetrating the medical (X-ray diagnosis), printing, electronic imaging and magnetic materials fields.

HIGHLIGHTS

• In 1962, Fuji Photo and U.K.-based Rank Xerox Limited (now Xerox Limited) launched Fuji Xerox Co., Ltd. through a joint venture.

•  By becoming one of the title sponsors of the 1984 Los Angeles Olympics(an opportunity that Kodak passed on), offering cheaper camera film, and establishing a film factory in the US, Fuji gained considerable market share there

• Fuji focused on providing quality and innovative products to its US consumers.

• Revenue¥ 2492.6 billion (2015)• Net income ¥137.1 billion (2015)

Strategy Adopted By FUJI

• Fuji focused on building it’s market share in US by adopting strategies to get share of weaker competitors rather than going after share of Kodak.• Fuji focused on the customers and introduced products which were faster, had brighter colors, and were priced lower than the Kodak products which helped them to attract many consumers. they didn’t compromise on the quality while providing products on lower price. Due to high speed, many photo finishers switched to Fuji photo paper and other photo supplies.• Fuji reduced the prices of their print paper so that they are able to attract more consumer as Kodak products were 20% more costlier.

•Fuji introduced films which were compatible with Kodak products with lower price so that people who are price conscious would substitute Fuji films for Kodak Cameras.

•With increasing market share due to faster speed and brighter color, Company encouraged its salesforce to spend good amount of time with their distributors so that they build good professional relationship with them. This helped Fuji films to generate twice as much revenue than that of Kodak. They distributed rolls to distributors at steep discounts to avoid losses due to film ‘expiration’.

•They provided discounts on their multiple roll packs which helped them in increasing their sales and also their market share. Kodak was not able to cut its price steeply as that would reduce their profit margins from its most profitable business of films.

• The high spending on R&D enable to produce innovative products to drive sales further. This helped them to maintain their competitive advantages as they were able to produce products which were according to customers needs

• Fuji introduced one-time use camera which was not followed by Kodak thus allowing Fuji to become leader in one-time camera products.

• Established a Production plant in US which helped in reducing the cost of making the films and to maintain their low price for products, also avoiding any trade dispute with US government. Fuji adopted the strategy of producing locally in the US and competing globally.

Kodak in Japan

• Kodak entered Japan in 1905 but they ever took market seriously

• In 1977 when they saw potential in Japan market then they Strengthened their distribution network and marketing system by starting a Joint venture with Japanese arm Nagase & co but later they converted the import division of nagase into their own subsidiary and renamed as Kodak-Japan.

• With this joint venture they were able to Increase their employee from 12 to 4500

• They also tied up with Japanese partner which helped them to Access camera stores went up – 30k to 60k which also gave Kodak access to more shelf to display its products.

Kodak in Japan

• In Late 1970s Kodak did another Joint venture Bandai (Toy Mfg) – to sell single use camera.

• Kodak Setup its own R&D and support center to help its consumers, they also did Symposium in which they met with researcher, professor, major customers and companies with which they had strategic alliance. The purpose was improve Kodak’s image as technology intensive company and symbolized its commitment in technical presence in japan.

• In 1980 they came out with minilabs concepts in japan in which film would be processed much faster than conventional photo processing. Pricing done was little high but it provided competitive edge over Fuji.

• they Introduced “Panoramic Disposable Camera” as Japanese were fond of taking pictures in large groups. They Increased control on Sales & Distribution system. Kodak also Bought Kusuda Business Machines which had been marketing Kodak’s business imaging system in japan.

• Kodak Controlled 150 labs against 250 by Fuji.

CONT..

In 1986 Kodak advertised heavily in media to increase its popularity.– They introduced waterproof disposable camera which got popular

among Japanese teenager who enjoyed underwater swimming and also introduced print film-’Ektar’ with bright color, contrast and newly designed package.

– Kodak spend $500 million to develop strong base for its Japanese photographic industry but still they lost market share during 1988 due to low trial rate and low brand recall among Japanese consumers and company failed to get good retail acceptance.

– In 1994 Kodak introduced new product ‘Falcon’, the product became one of the best photographic product in japan but was advertised very unconventionally in Japanese market due to which it was not a very huge success in terms of sales.

Difference in distribution network

• In US, photo film manufacturers sold its products directly to retailers and photofinishers, there are no intermediaries in between.

• In Japan, photo film industry use intermediaries to distribute their products. The distributer mediate between the to parties (manufacturers and wholesaler/retailer).

Distribution network of Fuji in Japan

• Japan is the hometown of Fuji• Fuji products sold through 2,16,000 Retail outlets• Fuji maintain good relation with the retailers.• Fuji controlled 250 Labs for photographic papers• Fuji had strong ties with the distributors like

Asanuma, Misuzu, Kashimura and Ohmiya

• Fuji have exclusive stores for its products• Government also support the domestic

company• Better understanding of the home truf• Higher and better margins to the distributers,

wholesalers and retailers.

RECOMMENDATIONS

Provide cheaper online print services Kiosks at mall for instant photo printing Smart phone app to order online print Make available online services in emerging & competitive market. Promote OTUC in tourist spots Companies could market themselves as a superior brand rather

than going into price wars Kodak &Fuji should have tied up with more distributors to reach

across wide reach Companies could now focus on digital photography.

Conclusion

• Both firms saw their traditional business rendered obsolete. But whereas Kodak has so far failed to adapt adequately, Fujifilm has transformed itself into a solidly profitable business, with a market capitalisation,

• While Kodak suffers, its long-time rival Fujifilm is doing rather well.• Both enjoyed lucrative near-monopolies of their home markets:

Kodak selling film in America, Fujifilm in Japan• both are highly competitive in nature but somewhere Kodak didn’t

get success in beating Fuji• Both are poised to implement their strategies