How to Start a Medical Transport Business

1. Step 1

   Find a vehicle. The most critical component of your business is the vehicle you use to transport your clients. You want something that is reliable and can accommodate different disabilities and medical conditions. This may include a ramp or lift elevator for individuals in wheelchairs or an area in the back big enough to transport someone on a stretcher.

2. Step 2

   Purchase vehicle and general liability insurance. You need auto insurance to cover any vehicles used in your medical transport business as well as drivers. To protect your business you also need to obtain general liability insurance. Check with your state as they may have a minimum insurance requirement. For example, Ohio requires $500,000 in general liability insurance and $100,000/300,000/50,000 per person/accident/property.

3. Step 3

   Obtain a license from state if required. Some states, such as Oregon and Ohio, require medical transportation businesses to obtain a license to operate. This requires you to submit an application, licensing fee and proof of liability and vehicle insurance. In addition your vehicle may undergo an inspection to make sure it is safe and suitable for transporting clients.

4. Step 4

   Check for local license requirements. You also need to check with your city for any special licenses or requirements they have. For example, Albany, Oregon requires medical transportation companies to obtain a city business license by completing an application, submitting a $10 licensing fee and showing proof of insurance.

5. Step 5

   Arrange to accept insurance. Some insurance companies will pay for private medical transportation while others will not. If there are insurance companies that do pay for your services, work with them to become an approved service provider. This allows you to receive insurance payments for some clients you transport, and it may increase the number of transports you do since more people will use it if insurance pays for it.

6. Step 6

   Establish fees and policies for business. When setting your prices, take into consideration the cost to operate your business, including vehicle maintenance, fuel and employee wages. You also need to establish policies for payment such as whether you require payment upfront or will arrange a payment plan for those whose insurance doesn't cover it.

7. Step 7

   Market your medical transportation business. To get the word out about the transportation to medical facilities you provide, you can do a general advertising campaign using radio, TV and newspaper. However, it is more profitable to target the population in need of your services. This can be done by marketing at doctors' offices, hospitals, nursing homes and dialysis centers. You can also network with physicians, therapists and staff at treatment centers to get them to refer their patients to your services.

8. Step 8

   Hire employees. While you may be able to manage on your own as you start your medical transportation business, as you grow you need to hire employees to assist you. This is especially true if your services are available 24/7 or you expand to more than one vehicle in the fleet.

9. Step 9

   Set up a dispatch center. Once you add additional vehicles and drivers to your business, set up a dispatch center to handle calls for service. They can speak to the client and then send the appropriate driver and vehicle to assist the client.

How to Accept Credit Cards Online (BigCommerce.com)

How to Increase Your Average Order Value With Free Shipping (BigCommerce.com)

Using Surveys to Sell More Online (BigCommerce.com)

Richardson Manufacture Company Inc.

Statistics: 
Private Company 
Incorporated: 1848 as Joseph Richardson Company 
Employees: 700 
Sales: $69.8 million (2002 est.) 
NAIC: 337122 Non-Upholstered Wood Household Furniture Manufacturing; 321114 Wood Preservation; 321918 Other Millwork (Including Flooring); 337110 Wood Kitchen Cabinet and Counter Top Manufacturing 


Company Perspectives: 
Richardson Industries was founded by family members with deeply held values regarding the quality of products and the importance of human relationships. Today, these values represent a common language that provides everyone in the company with rare perspective. 


Key Dates: 
1848: Joseph Richardson builds a sawmill on the Mullett River in Wisconsin, starting the Joseph Richardson Co. 
1868: A planing mill and wood products manufacturing division are established. 
1876: The Joseph Richardson Co. adopts the name Richardson Brothers. 
1882: A factory is erected for manufacturing chairs. 
1936: Jairus Richardson founds J.S. Richardson to design and produce woodworking equipment. 
1942: The company engages in the wartime production of walnut handguards for M1 rifles. 
1952: A fourth generation of the family takes the helm when Bill Richardson is named president. 
1959: Richardson Brothers form a joint venture to produce and market high-fashion furniture. 
1973: Reorganization creates Richardson Industries, with units devoted to furniture, lumber, and truss units. 
1986: Glenn Dulmes is named president--the first non-family member to lead the enterprise. 
1989: Joe Richardson III succeeds Dulmes as president. 
1998: Richardson Industries celebrates 150 years of operation and is recognized as one of Wisconsin's oldest family-owned businesses. 


Company History: 

Located in Sheboygan Falls, Wisconsin, Richardson Industries, Inc., consists of several different divisions devoted to the various aspects of furniture and woodworking. In addition to its flagship division, furniture-maker Richardson Brothers, the company also owns Richardson Lumber, which sells building materials, produces custom architectural elements via a millwork shop, designs homes, and develops real estate. Richardson Wood Preserving produces treated wood for outdoor use. Richco Structures manufactures both floor and roof trusses for new homes, as well as commercial buildings. Finally, Falls Dealer Supply is a wholesaler of building products, including glass block and treated lumber. 

1841-75: Blazing the Trail 

Richardson Industries' roots stretch back more than 150 years, when Joseph and Carolyn Richardson moved from New York to Roscoe, Illinois, in 1841. To fund the move, the couple borrowed $400 from Carolyn's father, Peter Burhans. By 1845, the Richardson family--which included three children--had relocated to what would become Sheboygan Falls, Wisconsin. There, the Richardsons purchased 200 acres of land for farming. 

The early history of the company is chronicled in The Richardson Story by Jay Pridmore. In order to clear trees from his land, Richardson built a sawmill near the western shore of Lake Michigan on the Mullett River in 1848, with the help of his brother-in-law, Egbert Burhans. Wisconsin became a state that year, and Richardson's new sawmill represented the start of the Joseph Richardson Company. By 1871, Richardson had given the sawmill its first overhaul; the mill's water wheel and leather belts were replaced with turbines and gears. 

Joseph Richardson's enterprise sold raw lumber processed at the mill, and eventually made available a growing selection of such wooden items as hayracks, water tanks, cheese boxes, and farm gates. According to the February 1997 issue of Wood & Wood Products, the sawmill became part of a larger operation that also included a planing mill and manufacturing division around 1868. 

1876-1959: Growing With America 

In 1876, the Joseph Richardson Company changed its name to Richardson Brothers Company. Joseph Richardson had retired, and his sons, William, Egbert, and Edward, took an ownership stake in the company. According to Pridmore's book, while Edward eventually relinquished his ownership so that he could to move west, he later returned and worked for his brothers. 

By the later part of the decade, Richardson Brothers's offerings of wood products had expanded to include furniture. In 1881 the company produced its first chairs, and a factory was built for their manufacture the following year. Despite an economic depression that severely affected business, the company was able to persevere due to its broad offering of wood products. For example, while demand for chairs declined, the opposite was true of cheese boxes. 

Several important developments took place during the first few decades of the 20th century. In 1910, Joseph Egbert Richardson, who went by the name Egbert, succeeded his uncle William Richardson as company president. In 1936, Jairus Richardson founded J.S. Richardson to design and produce woodworking equipment. 

Early in the 1940s, many of Richardson Brothers's male employees left for World War II. As was the case in many industries across the nation, women assumed occupational roles previously performed by men. According to Pridmore, using machinery made by J.S. Richardson, Richardson Brothers shifted to wartime production. The company produced walnut handguards for M1 rifles, followed by rifle parts for NATO troops in later years. During the war, Richardson Brothers produced a newsletter called Shop Shavings to keep workers connected and informed about company news, even if they were stationed overseas. Only one Richardson Brothers employee was killed during combat. 

Richardson Brothers increased its advertising and promotion efforts during the 1940s, using high-end photography and quality brochures to communicate the company's wide-ranging woodworking and manufacturing capabilities to consumers. In 1947, Lemont Richardson was named company president, succeeding Egbert. Also that year, Joe Richardson, Sr. (not the company founder, but rather the son of Egbert Richardson) separated Richardson Brothers from the rest of his family's operations. A new lumberyard was then constructed not far from the company's furniture mill. 

Following the war, the company enjoyed renewed prosperity as the economy boomed. During this era, Richardson Brothers sold an expanded, modernized array of furniture, including cabinets and buffets produced in the Federal style. In 1952, a fourth generation of the family took the helm when Bill Richardson, son of Jairus, was named president. He was largely responsible for modernizing the company by working with well-known designers and increasing the company's marketing efforts. Despite his business acumen, according to Pridmore, "Bill was a tinkerer at heart, and nothing pleased him more than devising new and sometimes homespun machines for cutting wood, building furniture and even plowing snow." 

Richardson Brothers had become a very self-sufficient enterprise by the 1950s. Pridmore summarized its operations, explaining that the company "milled logs, generated power, devised many of its own tools and operated the business with a talented and motivated extended family whose roots went deep into the wood products business." 

The company concluded the decade by forming Richardson/Nemschoff in 1959. The new joint venture was established to produce and market high-fashion furniture. Expanding outside of Sheboygan Falls, Richardson Brothers placed a showroom in Chicago's Merchandise Mart, where it showcased pieces from its Peabody Collection, designed by Larry Peabody, a furniture designer from Boston. 

1960-99: Expansion and Modernization 

In 1960, Joe Richardson, Sr., made added prefabricated building trusses to the company's product offerings. Two years later, he succeeded his cousin, Bill Richardson, as president by purchasing a controlling interest in the firm. Another important development during this time was an increase in contract business. Richardson Brothers developed relationships with such clients as L.A. Period and California Furniture Shops on the West Coast, and Shelby Williams in Chicago. While this increased business made production more hectic, it also gave the company valuable experience in the area of high-volume manufacturing. 

During the 1970s, less expensive furniture imports put pressure on companies like Richardson Brothers. These overseas competitors developed a knack for copying the Early American style that Richardson had begun producing again, as it moved away from the contemporary styles of the previous decade. Luckily, increased demand for high-quality oak furniture did not die, and the company was able to offset the effects of competition from imports. 

A major development took place in 1973 when the company reorganized, forming Richardson Industries, Inc., as a holding company for its business segments, including furniture, lumber, and truss units. That same year, Marv Debbink was named general manager of the company's lumber business, as well as its truss unit, Richco Structures. 

During the late 1970s, Joe Richardson III returned to his family's company as vice-president in charge of design and product development. He had first worked in the Richardson Brothers sawmill at the age of 16, and subsequently went on to learn the furniture plant's operations from top to bottom by gaining valuable experience in every department. He had then followed a varied path to become a furniture designer, including time at New York's Jiranek School of Furniture Design and Technology; coursework in both art and business; and employment in a furniture design studio, decorator showroom, factory, and retail furniture store. The company rounded out the 1970s by forming Richardson Wood Preserving in DePere, Wisconsin, located near one of the company's two Richco Structures sites. 

In 1980, Joe Richardson III made an impression on the larger furniture industry when he designed a new line of bow-back chairs--a throwback to a style produced some 100 years before. The chair was a tremendous hit, and Richardson Brothers was besieged with orders from across the country, including many from new customers. This new product helped the company to expand its business in the West and Northwest. 

In the June 1982 issue of Wood & Wood Products, Joe Richardson III commented on the success of his family's company and how he chose to become a part of it, explaining: "I think many family businesses fail because they cater to the family, instead of people. I was raised to believe that whatever I wanted to do was fine." 

By the early 1980s, the Richardson Brothers division employed approximately 175 workers. Around this time, the company introduced a line of unfinished furniture that went on to become very profitable. Although Richardson Brothers would later scale back its presence in the unfinished market, in 1982 Wood & Wood Products reported that unfinished furniture accounted for 20 percent of the company's shipments. 

Also in 1982 a new manufacturing site was established in Haven, Wisconsin. The plant initially was used to make wall panels for Richardson Homes. Eventually, building trusses were also produced at this site for the Richco Structures unit. 

While Richardson Brothers invested in new technology as appropriate, the company continued to use some pieces of equipment that had been in operation for several generations, including an eight-spindle boring machine. In addition, it also "rediscovered" equipment that had been dormant for a long time, including machinery that used steam to bend oak during the manufacture of bow-back chairs. 

Computers had found their way into the Richardson Brothers plant by the early 1980s. While they were not widely used in the manufacturing process, computers helped improve several different business functions, including production data processing, costing, and inventory control. Computers were also employed at Richco Structures during the early 1980s. Around this time, as Pridmore explained in The Richardson Story, "computers and telecommunications, ploddingly slow by standards of a decade later, linked Richco with engineers at their supplier, Trusswall Corp. Richco personnel entered raw data on a screen, sent it to Trusswall by modem, and within a short period, they had engineered drawings for custom-made trusses." By 1983 Richco had decided to bring automated design in-house. 

Two key leadership developments took place midway through the 1980s. First, the company suffered a loss in 1986 when Charles Richardson, Sr., formerly head of Richco Structures, died. The same year, Glenn Dulmes was named president of Richardson Brothers. This was a historic milestone in that Dulmes was the first person outside of the family to lead that enterprise. Dulmes's roots with the company stretched back to his teenage years. During the 1950s, Bill Richardson had increasingly given him greater--and unprecedented--amounts of operational responsibility, and he played an instrumental role in improving the company. In 1989, Joe Richardson III succeeded Dulmes as president, and a family member was once again at the organization's helm. 

By 1996 Richardson Brothers had introduced a line of antique-finished furniture that was well received by many furniture dealers. Around the same time, a new 50-piece line of dining room and bedroom furniture was introduced. Named the Door County Collection, it was "the company's first major marketing effort outside oak in nearly 20 years," according to Pridmore. The March 25, 1996, issue of HFN--The Weekly Newspaper for the Home Furnishing Network explained how Richardson Brothers used consumer focus groups to gain valuable insight that affected the collection's design and price. The Door County Collection was highly successful, leading to first-year sales of several million dollars. 

By the late 1990s, Richardson Brothers had a firmly established reputation for quality within the furniture industry, especially for long-lasting chairs. This reputation was communicated in the company's advertising, which displayed a Richardson family member standing on an inverted chair to promote its durability and strength. 

In the February 1997 issue of Wood & Wood Products, Barbara Garet described the process used to make the sturdy chairs: "Steam bending makes chairs both durable and attractive. At Richardson Bros., bowbacks are hand bent from a solid piece of heated and pressurized wood. Fingerjoints are eliminated in continuous compound bent armchairs to create the strongest arm possible. Chair backs have doweled chuck joinery with reinforced screw plates. Legs and stretchers are double glued with compressed dowel construction." 

A major milestone was reached in 1998, when Richardson celebrated 150 years of operation. In its July 5, 1999, edition, the Wisconsin State Journal reported that, according to a study conducted by Bryant College's Institute for Family Enterprise, Richardson Industries was perhaps the oldest family-owned business in the state of Wisconsin. By this time, the firm employed approximately 900 workers and was approaching annual sales of $100 million. 

Despite years of tremendous success, the Richardson family had maintained a reputation for being approachable. In the same Wisconsin State Journal article, writer Jim Chilsen said that the residents of Sheboygan Falls described the family "as wealthy but down-to-earth--the kind who might slap you on the back if they see you at a local bar." 

2000 and Beyond 

As the 2000s arrived, although Cabinet Maker reported that Richardson Brothers had been able to drop the price of domestic goods twice in 18 months due to more efficient manufacturing processes, the company still faced a harsh economic climate and heightened foreign competition. Subsequently, layoffs occurred in the Richardson Brothers unit. The first workforce reduction took place in 2001, when 70 employees were let go. Although those workers eventually returned, 42 employees lost their jobs at the Richardson Brothers Sheboygan Falls plant in September 2002, followed by another 25 in April 2003. In the April 26, 2003, edition of the Capital Times, the company cited a need to "bring its production into line with customer demand and to reduce accumulating inventory." 

Considering the sluggish economy of the early 2000s, the layoffs at Richardson Industries were not out of line with ones at countless other U.S. manufacturing companies. Backed by more than 150 years of success, the company was likely to weather the difficult times and continue its success in the 21st century. 

Principal Divisions: Richardson Brothers; Richardson Wood Preserving; Richco Structures; Richardson Lumber; Falls Dealer Supply. 

Principal Competitors: Ashley Furniture Industries Inc.; Hamel Forest Products Inc.; Hoida UBC; Midwest Manufacturing; Stan's Lumber Inc.

Kodak VS Fuji

KODAK VS. FUJI:
THE BATTLE FOR GLOBAL MARKET SHARE
by
Thomas C. Finnerty
Thomas C. Finnerty is a doctoral candidate in the Doctoral of
Professional Studies Program, Lubin School of Business, Pace University,
New York.
This case was written under the supervision of Warren J. Keegan, Professor
of International Business and Marketing and Director of the Institute for
Global Business Strategy, Lubin School of Business, Pace University, New
York, as a basis for class discussion rather than to illustrate either effective or
ineffective handling of a business situation. ©2000 Dr. Warren J. Keegan.
*The following case solely represents the opinion of the author and does not express the opinions of the
Eastman Kodak Company of Fuji Photo Film U.S.A., Inc.
ACKNOWLEDGMENTS
This case study reexamines the competitive relationship of the two giants of the
photographic and imaging industry: Eastman Kodak Company and the Fuji Photo Film Co.,
Ltd. It uses the 1990 case study of Dr. H. Donald Hopkins of Temple University, “Kodak vs.
Fuji: A Case of Japanese-American Strategic Intervention” as a reference point and attempts
to update and clarify this relationship at the beginning of the 21st century. In the nine years
since the Hopkins’ case study was published, Kodak has seen some troubled times, yet
recently seems to have stabilized. Simultaneously, Fuji continues to slowly gain more of
Kodak’s still-dominant market share. The evolution of the industry has been exciting and
dynamic, and continues to adapt as consumer’s change. However, new technological players
are cause for concern for both Kodak and Fuji.
As an employee of the photographic and imaging industry, there are countless sources
of information from which I drew my conclusions and knowledge base. My focus was
shaped by a broad range of information, including PMA statistics and Nielsen syndicated
data reports, and dialogue with photographic customers, consumers, competitors and Fuji
employees.
I would like to acknowledge the marketing and sales staff at Fuji Photo Film U.S.A.,
Inc. for their historical perspective of Fuji’s existence within the U.S. market, especially
since 1990. In particular, I would like to acknowledge Mr. Herb Baer, director of Marketing,
Consumer Film and Quicksnaps, for his input, knowledge and assistance.
Summary
i
SUMMARY
As retail America is undergoes a dramatic change with the constant consolidation of
companies, management must strive to maintain a competitive advantage or risk being
acquired. The worldwide success of Wal-Mart has led many to diversify and heed the adage
that “bigger is indeed better.” An example in the global grocery industry is the Ahold Group
(Netherlands) which now operates in more than 17 countries including their recent
acquisition of New York based Pathmark. In the U.S. grocery industry, the merger between
Albertson’s and American Stores, and the U.S. Chain Drug landscape has rapidly changed
over the last two years with only four major players left standing: CVS, Rite Aid,
Walgreen’s, and Eckerd.
As the retail community shrinks, they put greater emphasis on their suppliers for
quality products at a competitive price that enables them to make healthy margins to attract
consumers. If one manufacturer cannot supply the necessary ingredients, retailers will look
for other alternatives. This environment has provided an opportunity to shake up an
otherwise mature and stable industry such as the photographic industry and has paved the
way for a viable competitor to Kodak such as Fuji Photo Film U.S.A. The phenomenon has
contributed to Fuji making significant inroads into Kodak’s once commanding U.S. market
share in particular and to its global share in general.
This case study shows the evolution of the Kodak-Fuji relationship, specifically from
Kodak’s perspective. The case study will attempt to show how Kodak has fallen from its
lofty mantel and how it has developed strategies to rectify the situation. H. Donald Hopkins
provided the groundwork for this revised case study in his original work “Kodak vs. Fuji: A
Case of Japanese-American Strategic Interaction.” The follow up study examines this
relationship, with respect to market share battles (both globally and domestically),
sponsorship battles, court battles and the photographic industry in general.
The relationship between Kodak and Fuji had always been adversarial, as competitors
naturally are; however, it took a very serious turn in May 1995 when Kodak filed a Section
301 petition under U.S. trade law. The petition claimed that Kodak’s 7-10 percent market
share in Japan was not a result of consumer choice and marketing efforts but rather a result of
four principle Japanese wholesalers, backed by the Japanese government, that are exclusive
Fujifilm supporters.
As a result, the World Trade Organization, which eventually presided over the court
decision, announced on January 30, 1998, a “sweeping rejection of Kodak’s complaints”1
about the film market in Japan.
At present, with the court battles behind them, Kodak and Fuji can now pool their
efforts to grow the photographic and imaging business as they did with their shared effort,
along with Canon, Minolta, and Nikon, in releasing the Advanced Photo System in
1 Edelman Public Relations Press Release, 30 January 1998.
The Changing Customer
1996. These types of efforts are necessary to stave off the real competition to
photography, the computer savvy who demands digital imaging.
KODAK AND FUJI…. NOT A PRETTY PICTURE
“How can Kodak possibly sit on its hands and allow this to happen?” pondered
Alex Henderson, an analyst at Prudential Securities in New York. “You can’t have your
nearest competitor growing at this volume and not deal with it.”2 Analysts stated that for
the first time in Kodak’s 113-year history, Kodak could no longer take its home market
for granted. Over the last decade, while the U.S. based Eastman Kodak Company was
sleeping, the Japanese firm Fuji Photo Film opened its first film-production plant in the
U.S., cut prices, marketed aggressively and stole valuable market share.
Kodak maintains that it will not engage in a price war to win customers back, due
to potential profit erosion. The inroads that Fuji has made in the U.S. market will
certainly continue their momentum. “They (Kodak) are competing against an extremely
determined, extremely proficient and extremely well-financed company in Fuji,” says
Michael Ellman, who tracks Kodak for Schroder & Company.3 What then, begs the
question, is Kodak to do? Many analysts are demanding that Kodak’s CEO George
Fisher take drastic action to cut costs, reduce debt and right the sinking ship.
THE CHANGING CUSTOMER
The dynamics within the photo industry have changed dramatically within the
past 15 years. Once upon a time, the film industry within the United States was basically
stable and predictable, with industry leader Eastman Kodak, a US based company
headquartered in Rochester, N.Y., having a commanding share of the industry, hovering
between 80 to 90%.4 No competitors even had a double-digit percentage of the amateur
photo market and many consumers automatically equated Kodak when they thought of
film. Competitors were left to fight for the scraps off Kodak’s table and the pickings
were slim.
Then, beginning in 1984, the general photographic market and particularly Kodak
has noticed a subtle change in consumer attitude. Kodak still retains its enviable and
commanding share of the market, but the market-savvy consumers of the new millennium
now have more choices and do not automatically and faithfully equate film with Kodak
alone. Three major functions have eroded consumer brand loyalty and allegiance to
Kodak these past 15 years.
2 Rochester Democrat & Chronicle, 16 September 1997, p.9 *
3 Ibid
4 Photo Marketing Association Industry Figures
1
Kodak versus Fuji
First, American consumers are more accepting of foreign-based products, though
they enjoy preaching the virtues of “Buying American.” They celebrate their patriotic
freedom by waving the American flag at picnics on the Fourth of July. However, it is not
uncommon for some guests to drive to the Independence Day celebration in a Mercedes
Benz (German) automobile, while listening to music on a Sony (Japanese) radio/disc
player. In addition, while waiting for their all-American burgers to cook, many
Americans are reaching into the ice chest to find Bass (English) Ale, along with Perrier
(French) bottled water.
A January1999 study showed that the U.S. recorded its single largest trade deficit
month ever at $17 Billion dollars.5 Imports outweighed exports. Unless protectionist
legislation is initiated and passed, U.S. consumers will continue to purchase what they
perceive as the best deal (be it domestic or foreign) for their money.
Second, consumers have found a bona fide competitor to Kodak in the name of
Fujifilm. Clearly, Fujifilm has emerged from a minor player in the early 1980’s to take a
solid number two position within the US market and has caught the attention, as well as
the wrath, of Kodak. Third, the landscape within retail America has changed dramatically
within the past five years. The success of Wal-Mart has taught retailers that
diversification, scrambled marketing and “one-stop” shopping are important to
consumers. As consolidation sweeps the nation in mass merchants, food and drug
accounts, retailers realize they must maintain their competitive advantage or close shop.
To survive, they are squeezing manufacturers for quality products at competitive prices to
capture profit margins for expansion within the industry. This environment has provided
an opportunity for Fujifilm to prosper in an otherwise stable and mature photographic
industry.
Today an all-out war has emerged. While Kodak and Fuji fight for market share,
the real winner and benefactor is the consumer. “Retailers and consumers will be the big
winners in this struggle for market share among the big players,” says one retailer. “We
are going to get more incentives to sell merchandise and the consumer is going to see a
lot more new products at lower prices.” 6 Kodak and Fuji deny they are engaging in a
price war, but for each move Fuji makes, Kodak counters with a vengeance. “Smack
them until they figure it out,” is how Eric L. Steenburgh, Kodak’s assistant chief
operating officer describes its strategy towards Fuji.7
5 USA Today, 19 March 1999, Source: U.S. Commerce Department.
6 Supermarket Business, February 1999, p47.
7 The Wall Street Journal, 18 November 1998.
2
Today’s Picture
3
TODAY’S PICTURE
The amateur photo market’s estimated is $14.2 billion. Film sales generate 20
percent or $2.84 billion (see Table 1). Within film sales, 35mm film format commands
80.2 percent or $2.27 billion dollars (see Table 2). While unit film sales showed a
moderate 2 percent growth rate, the real shining stars within the film sales segment,
which continues to exhibit strong growth, are the one-time use cameras (OTUC), which
are considered film within the industry. Unit sales grew at 23 percent in 1997 and a 20
percent annual growth rate is expected to continue (see Table 3).
Table 1: 1997 Amateur Photo Market $14.2 Billion Dollars
Segment Percentage Dollars
Photoprocessing 43.50% $6,177,000,000.00
Film Sales 20.00% $2,840,000,000.00
Conventional Cameras 9.70% $1,377,400,000.00
Digital Imaging 6.40% $908,800,000.00
Portrait Studios 5.50% $781,000,000.00
Frames 3.30% $468,600,000.00
Photo Accessories 3.20% $454,400,000.00
Albums 2.50% $355,000,000.00
Camera Repair 1.00% $142,000,000.00
Consumables 0.90% $127,800,000.00
Video Camcorders 0.70% $99,400,000.00
Video Accessories 0.50% $71,000,000.00
Other 2.80% $397,600,000.00
100.00% $14,200,000,000.00
Source: 1997 Photo Marketing Association (PMA) Figures
Kodak vs. Fuji
4
0
20
40
60
80
100
120
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
Source Photo Marketing Association
Millions
THE NEW PLAYERS
While Kodak and Fuji are familiar competitors, they have to be aware as new
competition enters the picture. In 1997, digital imaging accounted for 6.4 percent or just
under one billion dollars in the amateur photo market (see Table 1). As technology
inevitably increases and prices drop, the consumer may prefer digital imaging. A recent
Salomon Smith Barney report on imaging stated that the digital camera market in the
United States will be 12.7 million units by 2002, which is larger than the current
conventional lens shutter business in the U.S. The report also states that the average
price of a digital camera in 2002 will be about $168. Digital cameras are being
mainstreamed quickly.
35 mm
Instant
110 Film
APS
Disk
Other
Table 3: 1997 One-Time Use Camera Sales Up 23 Percent
Source: PMA Marketing Research
Table 2: Total Film Sales, 1997
Kodak vs. Fuji
4
Non-traditional competitors such as Sony, Casio, and Hewlett-Packard are
entering the industry with digital cameras and printers. To combat these threats, Kodak
and Fuji have each manufactured digital cameras and printers of their own to stay
competitive as “film companies” in the 21st century. To capture this technological
consumer, both Kodak (Kodak/AOL “You’ve Got Pictures”) and Fuji (Fuji.Net) have
instituted cutting edge services to allow customers to order prints directly over the
Internet.
THE GLOBAL MARKET SHARE BATTLES
Traditionally, Kodak and Fuji have battled it out in the overseas film markets. In
1995, it was estimated that Kodak had a 44 percent global share while Fuji had 33
percent.8 Today the global share has changed as the U.S. market and Asian markets have
shifted. Experts estimate that Kodak and Fuji were neck in neck, with roughly a third of
the market each. Alex Henderson, managing director of technology research at
Prudential Securities Inc. in New York, who has been watching the two companies since
1985. Mr. Henderson believes that Fuji will overtake Kodak by 2001. “When that
happens,” says Henderson; “Kodak will go from being Coke to being Pepsi.”9
In a letter to Kodak employees, Fisher and top management stated, “Competitors
are making bold claims. They claim they will dominate the future of this business. We
speak for the tens of thousands of people who work for Kodak when we say, ‘Not on our
watch’.”10
THE U.S. MARKET SHARE BATTLES
Eastman Kodak has a commanding, yet declining, 70 percent U.S. market share.
Fujifilm has approximately 17 percent U.S. market share. Other minor players in the
U.S. market include private-label brands, which constitute 7 percent, Agfa of German and
Konica of Japan each have less than 2 percent market share.
8 Fortune Magazine, 1 May 1995
9 The Wall Street Journal, 18 November 1998
10 Rochester Democrat & Chronicle, 16 September 1997, p9. *
Kodak vs. Fuji
4
0
20
40
60
80
100
1993 1994 1995 1996 1997 1998
Unit Sales
(In Millions)
Source: Information Resources, Inc. Ending 6/21/98
THE PRICE WARS
Domestically speaking, Kodak and Fuji traditionally enjoyed healthy margins and
treated the market as a mutually profitable duopoly. Then in the spring of 1996, Fuji cut
prices on film by 10 to 15 percent after Costco Wholesalers decided to go exclusively
with Kodak. Fuji had excess inventory of 2.5 millions rolls of film. They distributed the
heavily discounted film to other retailers to avoid “expiring” film and thus began a
correlation between pricecutting and market share.
As Fuji’s market share grew incrementally in 1997 at Kodak’s expense, Kodak
initially stated that it would not engage in a price war. Fisher stated in 1997 that: “Our
challenge is to figure out ways to introduce some exciting new products. That’s a better
way to fight an intense battle like the one we’re in.”11 Later in the year he said, “We do
not intend to continue to lose share at the rate we lost over the summer months.”12
Kodak stated that it did not intend to engage in a price war, and for good reason. Jonathan
Rosenzweig, an analyst at Salomon Smith Barney figures that “for every 1percent cut in
Kodak film prices, a 1 percent drop in earnings per share results”.
Consumer reaction surprised the industry. Once consumers tried Fuji, they found
they liked the product as long as it was priced lower than Kodak. By 1998 the hectic
pace of competition between Kodak and Fuji seemed to slow down, with the exception of
value packs. “Spurring sales this year was the fact that the category in general got more
price competitive, with both Kodak and Fuji sharpening their prices, particularly in
promoted prices,” states Jerry Quindlan, Kodak’s vice president and general manager of
11 Ibid
12 Business Week, 20 October 1997, p. 124
Table 4: U.S. Market Street
Kodak Fuji
Kodak vs. Fuji
4
Mass and Wholesale Clubs. “I would not call it a price war, however; it is really just
sharpening prices. Our average price did not go down that much, but we did get more
aggressive to protect market share.”13
SPONSORSHIP BATTLES
The rivalry between Kodak and Fuji does not stop on the grocery or camera
specialty shelves. This rivalry has heated up in the sponsorship arena as well. In his visit
to Pace University’s Lubin School of Business on April 28, 1999, Herb Baer, director of
Marketing, Consumer Film and QuickSnaps, stated in his visit to Pace University’s Lubin
School of Business on 4/28/99, “Fujifilm sponsored the 1984 Los Angeles Olympic
Games and this sponsorship really helped put Fuji on the map.” As the story goes, Peter
Ueberroth, the Olympic organizer for the U.S. Olympic games, visited Rochester and
asked Kodak to be the exclusive film sponsor. Kodak refused the $1 million deal (far
below the $4 million asking price). Ueberroth called Fuji and Fuji agreed on the spot.
Fuji, a relatively small player in those days, still benefits from this agreement.
Kodak did not sit idle during the actual airing of the Olympic Games. They
initiated a legal ambush to divert attention away from Fuji. “ While Fuji was a worldwide
sponsor of the Olympics, its competitor, Kodak, became a “sponsor” of ABC television’s
broadcasts of the games and the ‘official film’ supplier to the U.S. track team”14 Fuji
returned the 1984 favor to Kodak during the 1988 Olympics and thus the began the
sponsorship and ambush marketing that continues today.
13 Supermarket Business, February 1999, p. 47
14 R.Fannin, “Gold Rings of Smoke Rings?,“ Marketing and Media Decisions, volume 23, September, 1988, pp.64-70
COURT BATTLES
Ironically, Kodak and Fuji each command roughly the same market share in their
home-country markets: 70 percent. While Fuji has recently made significant strides in
the U.S. market to gain the previously stated 17 percent, Kodak hovers around the 7-9
percent in the Japanese market (see Table 4).
The main differences between the U.S. and Japanese markets are the systems in
place to distribute film, paper and supplies to end-users. In the United States, film
manufacturers sell directly to retailers and photofinishers. In Japan, distributors mediate
between the two parties. Fuji has close ties to the four principle distributors, while
Kodak claims that these strong relationships prevent distribution of other brands.
Furthermore, Kodak states that Tokyo-based Fuji has hundreds of exclusive deals
with photofinishing labs and that the Japanese Government is backing the entire system
in order to impede Kodak from succeeding in the Japanese market. Table 5 illustrates
how the Japanese distribution system typically works.
Kodak Versus Fuji
Tertiary Wholesalers
Large Retailers
Secondary Wholesalers
Tokuyakuten (Independent)
Source: Professor David P. Baron, The Kodak-Fujifilm Trade Dispute, S-P-17 Graduate School of
Business, Stanford University, July 1998, p7
On May 18,1995, the Eastman Kodak Company asked the United States Trade
Representative (USTR), the U.S. Government official responsible for negotiating
international trade disputes, to investigate whether the Government of Japan had allowed
anticompetitive practices to deny Kodak opportunities to sell film and color paper in
Japan.
Kodak asked for this investigation under Section 301 of the U.S. Trade Act, a law
that requires the USTR to determine whether trade practices by a foreign country are
unreasonable and discriminate against U.S. exporters.
In a news conference in Tokyo in July, Kodak’s Ira Wolf said that “We
understand the risks inherent in going ahead with a 301 case, especially given the feelings
of the average Japanese consumer about 301. But we decided there was no
alternative….The Office of the Trade and Investment Ombudsman (Japan) is too weak
and the Geneva-based World Trade Organization does not cover competition policy.15
15 Kyodo News Service, 26 July, 1995
Small
Retailers
(kiosks)
Camera
stores
Asanuma Misuzu Kashimura Ohmiya
Nihon
Jumbo
Yodobashi
Camera
Fujifilm
Nagase
Kodak
Table 5: The Japanese Film Distribution System
Kodak Versus Fuji
11
Both companies claimed that injustices occurred in their respective market.
Fisher said, “While Fuji competes with Kodak on a global basis, it makes virtually all of
its profits in Japan, using those proceeds to finance low-price sales outside Japan.16 He
also said, “The Japan market, a large percentage, maybe 70%, is closed to us. And as a
result, Fuji is allowed to have a profit sanctuary and amass a great deal of money, which
they use to buy market share in Europe and in the United States.”17
Fisher added, “all we are seeking is the opportunity to compete in an open market.
We want resolution, not retaliation. Nor do we want market share targets. We want an
end to illegal market barriers…Kodak sells world class products. If given a chance, we
believe that our products can compete successfully in any market. We have not had that
chance in Japan.”18
Fuji rebutted in a 588-page defense entitled, “Rewriting History, Kodak’s
Revisionist Account of the Japanese Consumer Photographic Market.” In the rebuttal, it
cited that Kodak’s problems in Japan stemmed from mismanagement and other factors,
not unfair trade. Fujifilm factors president, Minoru Ohnishi, called Kodak’s allegations a
violation of business ethics and said that Kodak “shamelessly made false allegations”
against Fujifilm.
Fuji drew upon some powerful quotes that people were making about the case.
Some included, “The combined sales of these Eastman Kodak subsidiaries in Japan in
1994 was $1.2 billion, and Eastman Kodak is 43rd on the list of the largest foreign
companies. Whatever its complaints, Eastman Kodak has a major position in the
Japanese market. It has not been closed out”19
Another convincing statement came from former Kodak president Kay Whitmore.
He stated, “I think there is no further barrier in the Japanese market for Kodak to proceed
with its business in Japan. If there should be something, it would be only due to Kodak’s
own insufficient effort in the Japanese market.”20
16 International Trade Reporter, BNA Inc., 7 June 1995.
17 Moneyline, 2 August 1995.
18
Eastman Kodak Company Press Release, 27 July 1996.
19
James C. Abegglen & Peter S. Kirby, Gemini Consulting, The Wall Street Journal Europe, 4 March 1996.
20 Chemical Industry Journal (Japan), 4 October, 1990.
The Eastman Kodak Company
12
After nearly two and one half years of court rulings, the World Trade
Organization in Geneva issued a “sweeping rejection of Kodak’s complaints” about the
film market in Japan. Fuji Photo Film U.S.A., Inc. President Osamu (“Sam”) Inoue said.
“The WTO failed to find even minimal evidence to support the U.S. case,” Mr. Inoue
said. “After today, there can longer be doubt: imported film is widely available
competitively priced in Japan.”21
THE EASTMAN KODAK COMPANY
For generations, employment at the Eastman Kodak Company meant job security.
Rochester, New York’s biggest and most paternalistic employer gave a sense that Kodak
would never relinquish its U.S. market dominance to “foreign competition”.
Kodak opened photography to the masses with inexpensive cameras and easy-touse
film. Kodak’s name is one of the most recognized brand names in consumer goods in
the world. Their slogan of “you push the button, we do the rest”, enabled people to take
the worry out of a complicated, scientific process and make photography accessible to
nearly everyone who wanted to take pictures.
Kodak has been characterized as the leader in photography, an industry that has
gone from rudimentary glass plates to cutting edge digital images. Yet, Kodak realizes
that for all of their historical success’ throughout the world, they must now increasingly
include digital technology into the mix to stay at the forefront of the “photographic and
imaging” industry.
The climate at Kodak over the past three years has been well documented. Wall
Street has been nervous due in part to soft sales in the U.S., which stemmed from the
battles with Fuji, and a botched launch of the New Advanced Photo System. Massive
layoffs (16,000), the strong U.S. dollar ---meaning exports become less profitable and
imports become more profitable for Kodak competitors--- and sluggish growth in
emerging markets have all contributed to Kodak‘s decline in market share. “We went
from 20 percent growth to about 7 percent” says CEO George Fisher glumly. 22
When Kodak hired Fisher in December of 1993, he was hailed as the leader who
would bring back the highest levels of success that had eluded Kodak. Indeed, Fisher has
pared down costs, shed debt, sold off businesses not related to photography and refocused
goals, but analysts say that Kodak was slow to react when they could see the writing on
the wall. According to Eugene Glazer, a Fortis Advisers
21 Edelman Public Relations Press Release, 30 January 1998
22 Why Kodak still isn't fixed, Fortune Magazine, 11 May 1998
Kodak Versus Fuji
12
analyst who never changed his mind that Kodak was in a mature business that couldn’t
grow: “Fisher moved too slowly and didn’t instill a sense of urgency.”23
Profits and sales at Kodak have been eroding throughout the 1990’s. In 1998,
sales were $13.4 Billion dollars as compared to 1990’s $18.9 Billion in sales (see Table
6). Kodak’s market share in 35-mm film has dropped; film prices have declined an
average of 8 percent, which cuts into Kodak’s profitability. The company is at risk of
losing the title of world leader in the photographic industry. However, Kodak posted a
net profit for the first quarter of 1999, bolstered by steady film sales growth in China and
Brazil, as well as, low-end digital cameras in the U.S., Kodak finally posted a net profit
for the 1st quarter of 1999.24
Fiscal Year-end: December
Income Statement ($mil)
1998 1997 1996 1995
Sales 13,406 14,538 15,968 14,980
Cost of Goods Sold 7,293 8,130 8,326 7,962
SG & A Expense 3,303 6,432 5,438 5,093
Net Income 1,390 5,000 1,288 1,252
EPS Primary ($) 4.30 0.01 3.82 3.67
EPS Fully Diluted ($) 4.24 0.01 3.82 3.67
Assets ($mil)
1998 1997 1996 1995
Cash 457 728 1,777 1,764
Receivables 2,527 2,271 2,738 3,145
Inventories 1,424 1,252 1,575 1,660
Current Assets 5,599 5,475 6,965 7,309
Total Assets 14,733 13,145 14,438 14,477
Equity ($mil)
1998 1997 1996 1995
Common Stock Equity 3,988 3,161 4,734 5,121
Shares Outstanding (mil.) 323.3 323.1 331.8 345.9
23 Ibid
24 Claudia Deutsch, The New York Times, 17 April, 1999
Table 6 - 1998 Kodak Annual Report
The Eastman Kodak Company
14
Nielsen data indicates that film sales in the U.S. market rose 10 percent first
quarter 1999, as compared to first quarter 1998. Unit sales have increased even though
neither Kodak nor Fuji Photo Film dropped prices in 1999. “They’re all finally realizing
that it is marketing, not price, that makes the difference, “ Ulysses Yannas, an analyst
with Mercer, Bokert, Buckman & Reid, said.25
Perhaps George Fisher’s vision is taking hold. He has been successful in
attracting new talent to Kodak’s close-knit Rochester community. He appointed Daniel
Carp, a 27-year Kodak sales veteran in Canada, Latin America and London, as president
and chief operating officer in December 1996. Carp fully realizes the changing industry
as well as emerging markets. To help foster change, Kodak admitted that they had to set
up shop where the talent is. To that end, they have software operations in the Silicon
Valley and marketing offices in Atlanta.
In the restructuring of Kodak, four main segments have emerged:
1. The Consumer Imaging Segment:
Traditional films, papers, processing, photofinishing, photographic chemicals, cameras
(including one-time use), and the Advanced Photo System
2. The Kodak Professional Segment:
Traditional films, papers, digital cameras, printers, scanners, and chemicals
3. The Health Imaging Segment:
Medical films, chemical and processing equipment as well as services
4. Other (Digital and Applied Imaging) Imaging Segment:
Motion pictures, audiovisual equipment, certain digital cameras and printers, microfilm
products, application software, scanners and other equipment
While these segments serve the advanced countries of the world and keep Kodak
current with competitors, Kodak recognizes that there are untapped consumers in
emerging markets, such as China. In an interview with Carp in the February 1999 issue
of Photo Marketing, Carp explained, “In terms of strategy, it’s evolving just as we
predicted. We are building plants that will make world-class products to supply the
domestic market…. The second part is to build a team to get the word out to consumers
that photography is fun….The third part is to build the infrastructure so it’s a good
experience for the consumer.”26
Kodak believes that the future of photography, in addition to advancing
technology, is in getting more people to take pictures. To that end, they state in their
1998 annual report: “What if households in developing markets shot a full roll of Kodak
film each year? The gain would be immense.”
25 Ibid
26 Photo Marketing, February 1999, p55.
Kodak Versus Fuji
Table 7: Ratio of Households to Rolls of Film Consumed
Source: Kodak Annual Report 1998
FUJI PHOTO FILM CO.,LTD.
Fuji Photo Film Co., Ltd. was founded in 1934 and is headquartered in Tokyo,
Japan. If one person can claim to be the architect of Fuji’s growth, it’s Minoru Ohnishi.
At the age of 55, he took over the company in 1980, making him the youngest president
ever. It was under Ohnishi’s reign that salesmen were encouraged to spend time with
distributors and build relationships. As Japanese insiders say, “One cup of sake means
100,000 yen (of business).”
Fuji Photo Film has always prided itself on having the technology to produce
superior products to drive sales. The company has consistently spent 7 percent of sales
on research and development to maintain a competitive advantage. Because of this
investment, Fuji was able to introduce faster film with brighter colors (400 speed, 1600
speed), which is what the professional and serious amateur photographers were asking for
in the 1970s. In 1986, Fuji was the first to introduce one-time use cameras, and by the
time Kodak caught up with the technology, Fuji established a lead in one-time use
cameras that Kodak never experienced with traditional film.
This attention to detail and ability to occasionally out-pace Kodak technologically
has endeared Fuji to the professional market and served as a stepping stone to build
Countries Japan Australia Italy Indonesia
USA Canada Mexico China
Korea France Brazil Russia
Germany UK Thailand India
Number of households 145,000,000 114,000,000 92,000,000 607,000,000
In these regions
Average rolls of film 8.2 4.6 2.2 .5
Consumed per
Household year
Total Rolls of film 1,189,000,000 524,400,000 202,400,000 303,500,000
Fuji Photo Film Co.,Ltd.
creditability in the larger amateur market. Originally, Fuji started out in the U.S. market
in 1965 as a private brand supplier. In 1972, Fuji began to market film under its brand
name and, after remaining a very small player in the shadow of Kodak in the U.S., Fuji’s
initial success came with the sponsorship of the 1984 Olympic games in Los Angeles.
Every year since, Fuji has been slowly and quietly progressing in the U.S. market. “The
fact that Fuji has made inroads in the U.S. has surprised even Kodak,” says Sugaya Aiko
an analyst at Kleinwort Benson in Tokyo. “That is one reason why they are fighting back
in every other market.”27
“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,” says
Toby Williams, an analyst at SBC Warburg in Tokyo.28
As a company, Fuji Photo Film has three core business systems:
1. Imaging System:
Color films, motion picture film, cameras, magnetic audiovisual media, electronic
imaging, and equipment
2. Photofinishing System:
Photofinishing equipment, paper, and chemicals
3. Information Systems:
Graphic systems, Medical diagnostic systems, office automation systems, industrial
materials, and data recording media
Fuji’s long-term strategy in the U.S. is to produce locally, but compete globally.
“Globalization through localization” translates to producing as much film and paper on
U.S. soil as possible to avoid troublesome trade disputes, become more responsive to
demanding U.S. accounts needs and keep overall costs to a minimum. In 1987, Fuji
produced just 3.5% of its goods outside of Japan; today the figure is roughly 40 percent,
with manufacturing plants in the United States, the Netherlands, Germany, France and
the People’s Republic of China.29
Like Kodak, Fuji has to stay competitive with Silicon Valley to produce state of
the art digital products. To that end, Fuji established FUJIFILM Software (California),
Inc. in October 1998.
Fuji is one of the leanest Japanese companies. In the past 10 years, Fuji’s sales
have almost doubled, yet the number of staff in Japan remains almost flat. Fuji’s
27 Asia Week, 5 July 1996.
28 Fortune Magazine, 11 May 1998
29 Fuji Photo Film Co., Ltd. 1998 Annual Report, p. 16
Fuji Photo Film Co.,Ltd.
worldwide output per employee is $285,000, while Kodak’s--even after the massive
layoffs-- is $155,000. It is this type of drive that has maintained a double-digit sales
growth each year for the last decade (see Table 8).
Fiscal Year-end: March 31 (Assumes Y132=US$1, 3/31/98)
Income Statement ($mil)
1998 1997 1996
Sales 10,439 9,485 8,219
Income before taxes 1,230 1,214 993
Net Income 672 646 552
Per share of Common stock
Net Income 1.31 1.25 1.07
Cash Dividends 0.17 0.16 0.15
R & D Expenses 613 575 554
Acquisition of Fixed Assets 854 737 571
Depreciation 589 558 519
Total assets at year-end 16,148 15,041 13,991
Total Shareholders’ equity 10,837 10,188 9,488
Number of employees 36,580 33,154 29,903
Still Fuji’s drive to lead the industry has not come without its price. “As a
company Fuji has been so obsessed with building its brand, improving product quality,
and investing in research and development and marketing that it has neglected areas like
profitability,” says Sugaya Aiko. “Payouts have been far lower than Kodak because they
focused too much on long-term goals,” says Sugaya.30
With world-class product quality in balance for Kodak and Fuji, both are poised
to battle it out for global dominance. “There are two giants in this field and each wants to
be bigger than the other, say Kleinwort Benson’s Sugaya. “You’d have to spend billions
of dollars on research and development, marketing and distribution and even then there’s
no guarantee you could catch up with these two.31
30 Asia Week, 5 July 1996
31 Ibid
Table 8: Fuji Photo Film Co. Ltd. 1998 Annual Report
19
CONCLUSION
The following conclusion is solely the opinion of the author and does not express
the opinions of the Eastman Kodak Company or Fuji Photo Film U.S.A., Inc.
Based on the very recent news from Kodak’s 1999 first quarter earnings, it is too
early to predict Kodak’s status. However, Fujifilm is a formidable opponent. To
Kodak’s surprise, statistics indicate that those consumers have tried Fuji stay with it as
long as there is a price advantage.
Generally speaking, the industry, Kodak and Fuji included, does not want to
lower price for fear that it will turn this industry into a commodity business. Healthy
margins are desirable for everyone involved in the industry at the consumers’ expense.
The formula of V= B/P clearly is crystallized as consumers enjoy an increased value.
For the past two years the benefits remained constant, but prices have dropped. How
long will this continue is major concern.
Domestically, new products such as the Advanced Photo System, digital cameras,
and Internet services are the keys to increasing usage, which will invigorate this mature
market. Increased advertising and educated consumers will also drive sales for everyone
involved.
From a global perspective, Kodak and Fuji are vying for hegemony in another
battle, this time in emerging markets, specifically in China. Both are poised to
implement their strategies.
CASE DESCRIPTION
The traditional silver halide photographic industry is a very unique industry in
that there are just two dominant players. The case presented is a classic example of one
company --- Kodak----trying to maintain and/or increase it’s leadership position within
it’s respective industry, while another aggressive player---Fuji--- is trying to steal market
share. Although this industry is unique in that there are just two dominant players, the
problems that EK faces are not.
DISCUSSION QUESTIONS
1. How can Kodak protect its strategic advantage from competitors, especially Fuji?
2. How can Kodak anticipate market changes faster and react accordingly?
3. What are Fuji’s chances for future growth?
4. What are some disadvantages that Fuji has to overcome?
5. Should both Kodak and Fuji be concerned over digital integration into the silver
halide industry?
Fuji Photo Film Co.,Ltd.
SUGGESTED QUESTIONS ANALYSIS:
1. Kodak can continue to invest in marketing talent and leverage the dominant market
share position that they have to in order to recapture their earlier market share position.
They should be aware that third world countries have no built in allegiance to Kodak.
They should use this knowledge to their advantage and aggressively capture the markets
through distribution and pricing strategies, which initially elevated their status as the
dominant player in the U.S. market a century ago.
2. 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. As technology advances, consumers will want to experiment with it
as it relates to capturing sequences in time.
3. Very Good. The key is to provide an excellent product that has a price advantage
over Kodak. Also to continue to market to a “younger” consumer.
4. Fuji appears to be reactive to Kodak. They may have enough critical masse in the
U.S. market now to initiate marketing/promotional plans similar to what they’ve done to
establish the market lead in Japan.
5. Yes. Now matter which company has the “lead” in the market share game, the
technology of digital imaging continues to improve and may overtake silver halide in the
future.
6. Kodak. While Fuji is coming on strong, they are still a distant second player. EK
should initially refocus their efforts in their domestic market, try and “right the ship” as
some analysts suggest, and then invest in the huge potential market in China before
investing any more in the Japanese market where Fuji has the competitive advantage.
TEACHING PLAN
Many analogies can be drawn between the current silver halide industry and the
automobile industry at the turn of the 20th century. Then the train was the preferred
method of transportation and appeared to have the advantage over the automobile. The
train industry lost their competitive advantage because they failed to realize that
they were primarily in the business of transporting people. Trains were not the sole
option of transportation.
Discuss this analogy with respect to the silver halide industry. The idea is to
capture people’s memories in a fast, efficient, and lasting medium. As technology
advances, the silver halide industry is threatened; therefore, Kodak and Fuji are
threatened by new competition. Think about the methods that Kodak used to attain their
leadership. Can the company repeat the magic into the 21st century? Discuss the brand
loyalty of Kodak versus Fuji. Fuji is marketing toward the younger, college-educated,
early adopter consumers. This market will eventually replace Kodak’s loyalty base.
How can Kodak effectively compete in this market?
BIBLIOGRAPHY
Abegglen, James C. and Peter S. Kirby. “Gemini Consulting” The Wall Street Journal
Europe 4 March 1996
Bacani, Cesar. “Kodak’s China Moment” Asia Week 14 January 1999.
Baron, David P. “S-P-17, The Kodak-Fujifilm Trade Dispute” Graduate School of
Business Stanford University July 1998.
Chemical Industry Journal.Japan. 4 October 1990.
Deutsch, Claudia H. “Film Sales Lift Kodak Profit, Sending Stock up Sharply” The New
York Times, 17 April 1999.
Dolan, Robert J. “Eastman Kodak Company: Funtime Film” The Harvard Business
School 8 May 1995.
Eastman Kodak 1998 Annual Report
Eastman Kodak Interview. Photo Marketing. February 1999, 54-71.
Fannin, R. “Gold Rings or Smoke Rings?” Marketing and Media Decisions, 23
September 1988: 64-70.
Finnerty, Thomas C. Interview with Herb Baer, Director of Marketing, Consumer Film
and QuickSnaps, Fuji Photo Film U.S.A., Inc.
Fletcher, Matthew. “Film Fight: Fuji vs. Kodak.” Asia Week 5 July 1996.
Fortune Magazine 1 May 1995.
Freeman, Laurie. “Shooting for Share” Supermarket Business. February 1999, 48.
“Fujifilm News.” Edelman Press Release. 30 January 1998.
Fuji Photo Film Co., Ltd. 1998 Annual Report.
Grant, Linda. “Why Kodak Still Isn’t Fixed.” Fortune Magazine. 11 May 1998.
Greenwald, John, Frank Gibney, Valerie Marchant, Aixa M. Pascual and Adam Zagorin.
“Kodak’s Bad Moment.” Time Magazine. 29 September 1997.
Bibliography
17
Information Resources Industries and Nielsen Syndicated Industry Reports.
International Trade Reporter, BNA Inc. 7 June 1995.
Klein, Alec. “Kodak Profit falls 15% after charge, but sales climb for the 1st time in 2
years.” The Wall Street Journal. 19 April 1999.
Kyodo News Service. 26 July 1995.
PMA Industry Reports.
Smith, Geoffrey, William C. Symonds, Peter Burrows, Ellen Newborne and Paul C.
Judge, Business Week. 20 October 1997.
Sopko, J. Leslie and William Patalon III. The Rochester Democrat & Chronicle 16
September 1997.
Wall Street Journal. 18 November 1998

Why Do You Need Insurance and find online (Video)