Two companies, Kodak and Fujifilm ruled the coloured photographic films world market. After the demise of colour film business, Kodak went bankrupt while Fujifilm saw the end of photographic business well in advance and went into producing other products, ensuring its survival and growth. So what went wrong?
Kodak and Fujifilm, ruled the world of photosensitive material for half a century. At a time in 2000, the colour photographic film formed nearly 60 per cent of Fujifilm’s sale. It also contributed to two-thirds of its profit. At Kodak, it was 90 per cent of their business and 60 per cent gross margin, a veritable stable cash cow for over 50 years.
But there was an aftershock. Digital photography was about to replace films. A much profitable industry was about to collapse, as sales started dwindling and the decline was sharp between 2000-2010. Did anyone foresee this? A collapse was on the anvil.
As CEO of Fujifilm Komori Shigetaka, who was brought in to stem the company’s slide, writes in his memoirs, “It was clear to me that this was not the time for makeshift measures. Our only choice was to initiate radical reform, including the downsizing of our photography-related businesses.” VUCA had made a sudden strike, blindfolded them in a very short time. There had to be something more than strategic to renew their resources and capabilities. The task was uphill with no clues in hand; it required deep thinking.
Kodak too had reached the fork on the road. It too had to make the same decision. It decided to continue with business as usual and ultimately faced bankruptcy in 2012 and total oblivion later. Meanwhile, Fujifilm, over a period of ten years and an investment of $10 billion, changed its product mix and today, is stronger than ever. What was the differentiator? Did Fujifilm bounce back as a resilient leader?
This story is from the August 2019 edition of Indian Management.
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This story is from the August 2019 edition of Indian Management.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
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