PART 1: COMPANY ANALYSIS
• Competitive Advantages
In the early 1990, Kodak entered Russia. At that time, Russian consumers only had little knowledge about Kodak’s products. Moreover, there was a few or no infrastructure in that place for distributing photographic equipment and films and for processing film. Kodak gain a competitive advantage as a first mover advantage which is being first to the market and created a new market space with a new product or service, and continued to dominate that segment which is the photography market. A slow pace of market and technology evolution will benefited first mover advantage. For example, the consumer market for photography in Russia was underdeveloped so this is a good opportunity for Kodak entry to the Russia photography market. The entry of Kodak is a perfect message for a consumer market that was not used to photography.
Kodak gain competitive advantage by cost leadership. Cost leadership as an advantage occurs when Kodak is able to offer the same quality product as its competitors but at a lower price. For example, Russian consumers were poor and lacked the ability to afford all but the most inexpensive cameras. Kodak recognizing the limited income and the ability of Russian consumers to buy cameras. Hence, they sell lower-end film and cameras which is more economic and cheaper than other firm company. Kodak offers simple cameras for around $20 to Russian consumers. Russian consumer will wish to buy where cameras are cheap. They can afford to execute this product strategy because the cameras are made locally. Instead of trying to sell the top quality Kodak Gold film, which is famous in the West, the cheaper brand, Kodak Color Plus, is marketed heavily in Russia.
Not only that, Kodak also gain an advantage through the differentiation which is the business often use to set themselves apart from competitors. Kodak began offering new film, similar to its respected Kodak Gold product. The general manager of Kodak in Russia, Thomas D. Garman, described although the new Kodak color produced with Russian packaging at a cheaper price, as “not quite as high quality” as Kodak Gold, “but better than its competitors.”. They continue with Kodak Gold as their premium product, as Garman said that “We cannot ignore the pressures on consumer spending because people are accepting lower quality because of the lower price, and we had to respond to that.”.
Furthermore, Kodak gain competitive advantage by established a positive brand name. Kodak established the company’s brand image as an enterprise that can be trusted. Kodak also boosted its company image by rent a large building in Yaroslavl from Russian photography equipment manufacturer, Slavich, to establish the paper-finishing facility. This is not only can benefited the public relations, it also can helped Kodak lower its costs by using cheap Russian labour and raw materials and avoiding tariffs on imports of photographic products into Russia. Hence, building a local plant in Russia may helped Kodak gain cost advantages while enhancing corporate reputation. Not only that, Kodak also promoted itself as a company that stand against corruption and black market practices.
• Analyss on existing competitors and their global strategies.
Kodak was the first traditional film maker with any competition. However, after the Fuji’s U.S market entering the photography market in 1972, this lead the Kodak’s market share was eroded. Kodak and Fujifilm play a key role in photography market. Both Kodak and Fujifilm focus on photography and imaging as their core business.
Not only that, Fuji always prepare for the rapid changing demand in the market, the business scope of Fuji is wide which is include digital cameras, printers and photocopiers. Moreover, Fuji also developed into the health sector, which is producing medical equipment that includes X-ray imaging and chemicals. They prepared for the switch to digital technology and developed new business lines. At the begining, they only started off their business as a photography and imaging company, then they diversified into different other products such as digital cameras and medical equipment. For this reason, Fujifilm are able to achieve profits depending on the preferences of their various customer bases. After Fuji successful dominance in the Japanese photography market, Fujifilm realized the importance in venturing into the global market.
Strategic alliances between Fuji Xerox Corporation which is a subsidiary of Fujifilm and Xerox Corporation of USA occurred when Fuji Xerox and Xerox created a joint venture in 1962. Based on the joint venture, Fuji Xerox can gain some powerful benefit by increasing the value of the company in the photography industry. Fuji Xerox and Xerox can combined funds equipped both companies with the capability for innovation, investments and research and development.
Fujifilm spent around ten times more in advertisement compared to Kodak did in Japan. This ensures that these measures and values are integrated in all company procedures. They also implemented a transparency policy to keep the government and customers aware of its business activities.
Compared to Kodak. Fujifilm implemented its goals and ideas and the company’s fast reaction to change was an advantage over Kodak. The success of Fujifilm can be mainly related to Management’s flexibility to be innovative and venture into new technology, which has put the company at the top of the photographic industry since its founding in 1934.