Fujifilm is a Japanese multinational in the photography and imaging industries. They were Kodak’s main competitor for decades, yet while Kodak might have been forgotten by many since they went bankrupt, Fujifilm is still a very profitable company, making $654M profit in 2013, 24% more than in 2012.
An important thing to clear up first is that Fujifilm and Kodak were in the same boat for the most part. They heavily relied on the major profit from camera films, which they milked out until the very end. They both invested into digital technologies and diversified, but eventually only Fujifilm managed to transform digitally.
So how did they succeed where Kodak failed, when their situation was so similar?
Note: Fujifilm didn’t use the specific methodology as described in our book, as this happened decades ago in a very different world. Despite that, many things are very much in line with our vision on Digital Transformation and the story itself is very interesting.
Deciding who is in the driver’s seat
Instead of focusing on their own digital innovation, Kodak continued to try to compete with Fujifilm, mainly through their marketing and brand name. Additionally, they bought companies or partnered with them to get into new industries. The problem with this was a lack of in-house expertise, which is exactly what Fujifilm focused on under the lead of CEO Shigetaka Komori. They took the harder route of developing their expertise into new technologies, products and businesses.
“Kodak acted like a stereotypical change-resistant Japanese firm, while Fujifilm acted like a flexible American one.” ~The Economist
A prime example of where their difference in strategy mattered are the kiosks where customers can print their digital photos. Fujifilm had their own system for this, but Kodak partnered with another company and thus had to share the profit. On top of that, Fujifilm also had the expertise to apply their kiosk technology to other businesses in their digital-imaging division, while Kodak did not.
This strategy of applying their expertise and technologies into new areas was one of Fujifilm’s main focuses. Their decision to take the harder route and to do things themselves put them in the driver’s seat. It is ultimately what helped them to survive.
One of the new areas they moved into is surprisingly enough, the cosmetics industry. They got into it through their expertise with nanotechnology and placing chemicals onto film, which had a lot of similarities with applying products onto the human skin. Their experience with chemicals and photosensitive materials also helped them in other industries, like their medical-imaging equipment division.
All of these changes were of course painful to make and harmful for Fujifilm in the short term. It was costly and many jobs were lost, but their long-term vision helped them to survive and to continue to be a profitable company, in different ways.
What can we learn from Fujifilm?
– Having in-house expertise and looking into new technologies are essential.
– Investing into small new projects is risky, but important.
– Strategy is important, but so is execution.
If you need help with your short- and long-term strategy, check out our book about Digital Transformation. We hope to see you create your own success stories!