How did Fujifilm survive and avoided the fate of Kodak

Summary

Fujifilm survived the digital photography revolution that decimated Kodak by embracing diversification and innovation. Unlike Kodak, which denied the shift and stuck to its film business, Fujifilm, under CEO Watanabe Komori, adapted by leveraging its expertise in collagen technology to enter new industries like cosmetics and healthcare. This strategic shift allowed Fujifilm to reduce its reliance on photography, with healthcare generating 32% of its revenue by 2021. Fujifilm’s ability to innovate and diversify across various sectors, from medical imaging to beauty products, ensured its growth and survival in a rapidly changing market.

Takeaways

• 😀 Kodak's failure to adapt to digital photography led to a 90% drop in global film demand between 2001 and 2010, causing its bankruptcy in 2012.
• 😀 Fujifilm, much smaller than Kodak, survived by diversifying its business model beyond photography films.
• 😀 Fujifilm's diversification strategy included cosmetics, healthcare, imaging solutions, and document solutions, among others.
• 😀 Shigetaka Komori became CEO in 2003 and launched the Vision 75 plan to revitalize Fujifilm over six years.
• 😀 Fujifilm anticipated that digital photography wouldn't be as profitable due to the ease of replication and competition.
• 😀 The company leveraged its expertise in collagen, a key component in film production, to enter the cosmetics industry.
• 😀 In 2006, Fujifilm launched Astalift, a line of skincare products, marking the beginning of its expansion into cosmetics.
• 😀 Fujifilm also ventured into the healthcare sector, offering medical diagnostic imaging solutions using digital camera technology.
• 😀 By 2021, healthcare contributed to 32% of Fujifilm's revenue, while photography accounted for less than 1%.
• 😀 Fujifilm's ability to innovate through research and development hubs allowed it to continuously adapt and remain competitive.
• 😀 The company learned from Kodak's mistakes, using proactive innovation and strategic diversification to thrive in an evolving market.

Q & A

What led to the decline of the photographic film industry between 2001 and 2010?

The rise of digital photography caused a massive drop in global demand for photographic film, which decreased by 90% between 2001 and 2010.

How did Kodak respond to the digital shift in photography?

Kodak denied the change and tried to protect its traditional photographic film business, which ultimately led to a 10-year decline and its bankruptcy in 2012.

What strategy did Fujifilm adopt to survive the digital disruption?

Fujifilm adopted a strategy of diversification, expanding beyond its core business of photographic films into sectors such as cosmetics, healthcare, imaging solutions, and document solutions.

Who became the CEO of Fujifilm in 2003 and what key plan did he launch?

Shigetaka Komori became the CEO of Fujifilm in 2003 and launched a six-year plan called 'Vision 75' to save the company and regain profitability.

Why did Fujifilm believe that digital photography would not be as profitable as traditional film?

Fujifilm believed digital photography would not be as profitable because the technology was easy to replicate, leading to reduced barriers to entry and increased competition.

What industry did Fujifilm enter by utilizing its knowledge of collagen?

Fujifilm entered the cosmetics industry by using its expertise with collagen, a key ingredient in skincare products.

When did Fujifilm launch its skincare line, and what was it called?

Fujifilm launched its skincare line in 2006, under the brand name 'Aster Lift.'

How did Fujifilm expand its presence in the healthcare sector?

Fujifilm expanded into healthcare by applying digital camera technology to medical diagnostic imaging solutions.

What was the impact of Fujifilm’s diversification on its revenue by 2021?

By 2021, healthcare accounted for 32% of Fujifilm's revenue, imaging solutions contributed 13%, and photography represented less than 1% of the total revenue, compared to over 60% in 2001.

What role does research and development play in Fujifilm’s business strategy?

Fujifilm established multiple research and development hubs to continuously innovate and identify new business opportunities, helping the company remain competitive in a changing market.