fuji and kodak

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RIVALRY OF KODAK AND FUJI Presented to:- Professor Manohar Pandit Presented by:- Manoj Karne (14) Shrikant Kothawale (16) Princy Mathew (18) Vikrant Mokal (20) Dnyandeo Nakwa (22) Krinjal Parmar (24)

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Page 1: Fuji and Kodak

RIVALRY OF KODAK AND FUJI

Presented to:- Professor Manohar Pandit

Presented by:-

Manoj Karne (14)

Shrikant Kothawale (16)

Princy Mathew (18)

Vikrant Mokal (20)

Dnyandeo Nakwa (22)

Krinjal Parmar (24)

Page 2: Fuji and Kodak

ABSTRACT

The case discusses the strategies adopted by Kodak and Fuji to gain global market share in the photographic film and paper industry. The case examines in detail the strategies adopted by Fuji in the US and Kodak in Japan. It explains how Fuji was successful in building a significant presence in the US while Kodak failed to do so in Japan. 

The case also discusses the dispute and court battles between the two companies.

Page 3: Fuji and Kodak

INTRODUCTION» The US-based Eastman Kodak company founded by George

Eastman in Waterville, New York» Because the death of his father, he discontinued his education at the

age of 13 being interested in photography» Eastman pioneered the development of dry plate process and file

his first patent in 1879 related to gadget that prepared dry gelatin plates

» By the end of 1882, the company had generated enough revenue to afford a new factory in Tennessee to produce the steady supply of materials for making films

» Before 1980s, it enjoyed a monopoly status in the photographic film and paper industry in the US with more than 85% market share

Page 4: Fuji and Kodak

Cont…..» Started manufacturing cameras, and also expanded company

operations overseas setting up the Eastman photographic materials company limited in London in 1889

» The company settled on the name Eastman Kodak company in 1892. Kodak entered into the Japanese market in 1900 and set up his first distribution outlet in 1905.

» Through this outlets, products manufactured in the US were distributed in Europe, the far East and Australia

» By 1960, Kodak had 100,000 employees on his roll and was generated sales of $2 billion

Page 5: Fuji and Kodak

Cont….

» According to information, Kodak had monopoly status in photographic films and paper industry in US but still there was declined the revenue from$15.97billion in 1996 to $14.36 billion in 1997, a fall more than 10%

» Net earning also falling from $1.29 billion to just $5million for the same period

» Also the market share of Kodak company decline from 80.1% to 74.7%

Page 6: Fuji and Kodak

Fuji in the US

» 1934: Jan 1934 by name of Fuji Photo Film Co. Ltd. In Japan.

» 1964: entered the US markets as a supplier of private label film

» 1965: Dec. established its first subsidiary» 1967 : 8mm home Movie System» 1970: introduction of a faster film with brighter colors(which

was photographer looking for)» 1972: marketing its film under its own brand name» 1976: introduction of 400 – speed color film » 1977: reduction in prices of print paper

Page 7: Fuji and Kodak

Fuji in the US» 1978: expansion of distribution to drugstores, supermarkets

and discount chains» 1983: brought a new high resolution film in two speeds» 1984:fuji became sponsor for the 1984 summer Olympics in

los Angeles.» 1986: Fuji became first company to introduce one time use

cameras.» 1991:fuji had established 15 manufacturing unites in 12

countries out side japan» 1996: Fuji reduces film price by 10-15%» 1997: Fuji reduces prices by 50%

Page 8: Fuji and Kodak

Product Line Of FUJI

YEAR FUJI

1967 8mm home Movie System

1970 Faster film with brighter colors

1972 Films under its own brand name

1976 400 speed color film

1983 New high resolution film

1986 One time use camera

Page 9: Fuji and Kodak

8MM HOME MOVIE SYSTEM

1967

Page 10: Fuji and Kodak

400 SPEED COLOR FILM

1976

Page 11: Fuji and Kodak

ONE TIME USE CAMERA

1986

Page 12: Fuji and Kodak

CURRENT PRODUCT OF FUJI2010….

Page 13: Fuji and Kodak

FUJI’S STRATEGY

» "Fuji's greatest strength is that they always make sure that consumers are ready to buy their new products, and they actually get the products to the consumers."

- Toby Williams, an analyst at SBC (Swiss Bank Corporation)Warburg in Tokyo, Fortune Magazine, May 1998.

Page 14: Fuji and Kodak

Contd…

» FOCUS ON BUILDING ITS MARKET SHARE BY ADOPTING STRATEGIES

TO GET THE SHARE OF WEAKER US COMPETITORS RATHER THAN THAT

OF KODAK.

» FUJI PROVIDED BUYERS OF JAPANESE CAMERA WITH FREE FILM

ROLLS BUT KODAK DIDN’T

» IN 1977 FUJI REDUCED THE PRICE OF ITS PRINT PAPER. THE PRICE WAS

LOWER THAN THAT OF KODAK

» FUJI’S PRODUCT WERE 100% COMPATIBLE WITH KODAK CAMERAS AND

KODAK FILM

» FUJI GAINED MORE FROM PRICE CUT IN US

Page 16: Fuji and Kodak

STRATEGIES OF

Page 17: Fuji and Kodak

THE BEGINNING…

Early 1900 - Kodak entered Japan.

1905 – Setup its first distribution outlet.

1964 – Fuji entered the US as a supplier of private label film and later on started

flourishing by providing customers with innovative products.

In the initial years Kodak ignored its competitors in the US, especially Fuji.

1970 – Growth rate of Kodak slowed down by 2%-4%.

1980 – Japan emerged as the 2nd largest market in photographic products.

Page 18: Fuji and Kodak

STRATEGIES OF KODAK

In 1970, Kodak formed a joint venture company named Kodak –Nagase and increased its workforce to 4500 from a mere 12 thus increasing its control on its distribution and the marketing in Japan.

Formed certain other joint ventures and strategic alliances like with Bandai, Japanese toy manufacturer, and established co-branding arrangement to sell its single use cameras.

IN 1970’s

Conducted annual Kodak Symposiums aiming to improve its image as a technology- intensive company globally.

Kodak setup its own R&D center and opened a technical assistance center

Page 19: Fuji and Kodak

STRATEGIES OF KODAK

In 1980, brought in the concept of minilabs.

Kodak sold its new range of photographic film named fed Kodacolor at 38.3% less than the market price of other available films

IN 1980’s – 1990’s

In 1986 Kodak advertised heavily in the media to increase its popularity

Introduced the panoramic disposable camera and the waterproof disposable camera

1984 – 1990, spent almost $500 million to develop a strong base in the Japanese market.

Came out with a new product, a single use camera, FALCON.

Page 20: Fuji and Kodak

What went wrong?

DISTRIBUTORS

FUJI• Asanuma • Misuzu• Kashimura• Ohmiya.

KODAK

• Nagase

• Kodak ‘s failure in Japan was due to the significant difference between the distribution networks in Japanese and US market

• Fuji had already developed good relations with its distributors.

• Fuji had the First Mover Advantage and thus had already captured a significant portion of the Japanese market.

• Fuji provided new, innovative and substitute products at a comparatively low price to that of Kodak.

Page 21: Fuji and Kodak

RIVALRY BETWEEN KODAK & FUJI

Price wars

- Initiated by Fuji, but no after effects from Kodak• Fuji Gained market share with aggressive marketing by offering

quality & innovative products at low price

Sponsorship Battles

- Fuji, the Event Sponsor while Kodak, the Broadcast Sponsor • Kodak’s defensive strategy vs. Fuji’s offensive strategy

Court Battles

Page 22: Fuji and Kodak

DIFFERENCE IN DISTRIBUTION• In US manufacturers sold directly to retailers & photofinishers• In Japan distributors acted as intermediaries

Page 23: Fuji and Kodak

THE DISPUTE

• Higher market share of Fuji in US but lower market share of Kodak in Japan

• Kodak claimed that the tie up of Fuji with major distributors , Price fixing, bribing retailers and wholesalers (Huge allowances), association with photo labs.

&through this prevented other brands entry

• Kodak filed a petition under Sec 301 referring to unfair trade practices

• Fuji gave high commission to the distributors

• Japanese government was supporting such monopolistic distribution set up

Page 24: Fuji and Kodak

FUJI’S STAND

Kodak was unsuccessful majorly because of its

- Poor marketing

- Negligence

- Bad management

- Short term vision and priorities

It talked of not being involved in any kind of unfair trade practices

In 1997 WTO ruled out all allegations by Kodak in absence of substantial proof.

Page 25: Fuji and Kodak

THANK YOU