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)
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.

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
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
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%
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
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%
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

1967
8MM HOME MOVIE SYSTEM
1976
400 SPEED COLOR FILM

1986
ONE TIME USE CAMERA

2010….
CURRENT PRODUCT OF FUJI
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.
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

Contd….
» IN 1997 FUJI REDUCED ITS PRICE BY 50% ON ITS MULTIPLE FILM
ROLLPACKS
» FUJI ADPOTED THE STRATEGY OF PRODUCING LOCALLY AND
COMPETING GLOBALLY
» THE COMPANY ENCOURAGES ITS SALESFORCE TO SPEND MORE TIME
WITH DISTRIBUTERS THEREBY BUILDING GOOD PROFESSIONAL
RELATIONSHIP WITH THEM.
» FUJI HAD STRONG RELATIONSHIP WITH 4 MAIN DISTRIBUTORS –
ASANUMA MISUZU, KASHIMURA AND OHMIYA IN THE US ON THE
OTHER HAND KODAK HAD ONLY ONE DISTRIBUTER NAGASE IN JAPAN

STRATEGIES OF
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.

STRATEGIES OF KODAK
IN 1970’s
IN 1970’s
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.
Kodak setup its own R&D center and opened a technical assistance center
Conducted annual Kodak Symposiums aiming to improve its image as a technology-

intensive company globally.
STRATEGIES OF KODAK
IN 1980’s
IN 1980’s –– 1990’s
1990’s
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
Introduced the panoramic disposable camera and the waterproof disposable camera
In 1986 Kodak advertised heavily in the media to increase its popularity
Came out with a new product, a single use camera, FALCON.
1984 – 1990, spent almost $500 million to develop a strong base in the Japanese
market.
What went wrong?
• 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.
DISTRIBUTORS
DISTRIBUTORS
FUJI KODAK
• Asanuma
• Misuzu • Nagase
• Kashimura
• Ohmiya.
• 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.
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
DIFFERENCE IN DISTRIBUTION
• In US manufacturers sold directly to retailers & photofinishers
• In Japan distributors acted as intermediaries
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

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.
THANK YOU

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RIVALRY OF KODAK AND FUJI

Presented to:- Professor Manohar Pandit

» According to information, Kodak had monopoly status in

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

400 SPEED COLOR FILM

ONE TIME USE CAMERA

» "Fuji's greatest strength is that they always

TO GET THE SHARE OF WEAKER US COMPETITORS RATHER THAN THAT

» FUJI PROVIDED BUYERS OF JAPANESE CAMERA WITH FREE FILM

ROLLS BUT KODAK DIDN’T

LOWER THAN THAT OF KODAK

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

» FUJI GAINED MORE FROM PRICE CUT IN US

» FUJI ADPOTED THE STRATEGY OF PRODUCING LOCALLY AND

» THE COMPANY ENCOURAGES ITS SALESFORCE TO SPEND MORE TIME

WITH DISTRIBUTERS THEREBY BUILDING GOOD PROFESSIONAL

RELATIONSHIP WITH THEM.

» FUJI HAD STRONG RELATIONSHIP WITH 4 MAIN DISTRIBUTORS –

ASANUMA MISUZU, KASHIMURA AND OHMIYA IN THE US ON THE

OTHER HAND KODAK HAD ONLY ONE DISTRIBUTER NAGASE IN JAPAN

 Early 1900 - Kodak entered Japan.

 1905 – Setup its first distribution outlet.

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

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

Conducted annual Kodak Symposiums aiming to improve its image as a technology-

In 1980, brought in the concept of minilabs.

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

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

• Fuji gave high commission to the distributors

• Japanese government was supporting such monopolistic distribution set up

 Kodak was unsuccessful majorly because of its

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

 In 1997 WTO ruled out all allegations by Kodak in absence of

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