{"id":19824,"date":"2016-11-18T17:48:31","date_gmt":"2016-11-18T22:48:31","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/fujifilm-transformation-from-a-photographic-film-maker\/"},"modified":"2016-11-18T17:54:32","modified_gmt":"2016-11-18T22:54:32","slug":"fujifilm-transformation-from-a-photographic-film-maker","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/fujifilm-transformation-from-a-photographic-film-maker\/","title":{"rendered":"Fujifilm: Transformation from a photographic film maker"},"content":{"rendered":"

Fujifilm and photographic film industry<\/strong><\/p>\n

Fujifilm was founded in 1934 originally as a photographic film maker and is headquartered in Tokyo, Japan. [1] \u00a0In the 1960s, the company was a regional presence just starting to widen its focus globally and playing a distant catch-up to photographic film leader Eastman Kodak Co. But today, Kodak went bankrupt (filed Chapter 11 bankruptcy protection in 2012, ended in 2013), and on the other hand Fujifilm could overcome the industry crisis attributed from digitization, and is now continuing to grow by shifting the focus of the management resources from its traditional business to new areas; Fujifilm has transformed from a narrow photographic film supplier into a diversified company with significant health care and electronic operations. [2]<\/p>\n

The traditional photographic film-related business accounted for almost 60% of operating profit in the entire business of Fujifilm in 2000.[3] \u00a0However, since then, demand for camera film dropped 90% in 10 years as the digital revolution swept the world, and eventually the sales of the photographic film business fell to 1% of the total sales of Fujifilm in 2011; It actually happened only within a decade.[4] \u00a0The first digital moment of the photographic film industry was in 1975 when Kodak invented the world\u2019s first digital camera. Ironically, the technology they introduced was the initial cause of the huge market shrink in the photographic film business starting from 2000, which ultimately led Kodak to bankruptcy. [5]<\/p>\n

\"[Fujifilm<\/a>
[Fujifilm Photograhic film, source: http:\/\/photorumors.com\/]<\/figcaption><\/figure>Fujifilm\u2019s business segments include Imaging Solutions, Information Solutions, and Document Solutions. In 2000 at a peak time of the photographic film business, 54% of their total sales was from photographic Imaging Solutions business (which include analog film related business) and 46% was from information Solutions business such as medical equipment\/electronic materials. [3] \u00a0In 2015, the business structure in sales with three core businesses has been largely changed to 14.5% for Imaging Solutions category, 38.3% for Information Solutions segment, and 47.3% for Document Solutions mainly operated by the affiliated company Fuji Xerox. [6]<\/p>\n

But how could Fujifilm transform its business so dramatically?<\/p>\n

 <\/p>\n

The Information Solutions segment: cosmetics and medical diagnosis imaging system<\/strong><\/p>\n

The rapid growing Information Solutions segment, currently includes products used in medical systems, pharmaceuticals, regenerative medicine, life sciences, cosmetics, flat panel display (FPD) materials, industrial products, electronic materials, recording media and graphic systems.<\/p>\n

In this segment, the cosmetics category started from 2006 can be described as an instance of how structural reform occurred; Fujifilm entered the cosmetics field, launching its Astalift series of skin-care products in 2007. Since then the company has extended its product lineup beyond the skin-care series to also include base makeup. Astalift continues to grow as a global brand, sold in China, Southeast Asia, and European countries as well as in Fujifilm\u2019s home market of Japan. [7]<\/p>\n

It seems that there is nothing in common between photographic film and cosmetics at a glance, but the company set its eyes on similarity in analog film manufacturing technology. Thickness of color photographic film is approximately 0.2mm (the same thickness of human hair). Collagen used in this 0.2mm analog film requires several functionalities as capability to maintain a long-term\/stable quality, retain moisture at the time of development, prevent from losing shape by aging degradation and impact in addition to a capability to hold elasticity; the company held a huge accumulation of collagen technology and also unique technology to manufacture various types of collagen. Control of collagen is one of the key technologies required in the skincare cosmetics manufacturing process since collagen is one of the main constituents of cosmetic products. Therefore, the company could successfully enter into the cosmetic industry by implementing their knowhow they had on collagen due to a technical similarity between films and cosmetics manufacturing process. [4]<\/p>\n

<\/a>
[Astalift cosmetic products source: http:\/\/www.astalift.com.sg\/]<\/figcaption><\/figure>\n

Furthermore, Fujifilm introduced medical diagnostic imaging system with the application of digital camera technology, and also places the system as a core in business development for healthcare field. Since the wave of digitization recently becomes a significant influence in healthcare field, this also can be a field where the company can apply its image processing technology most efficiently as an advantage. [8]<\/p>\n

\"[Digital<\/a>
[Digital Medical Photographic system: source: https:\/\/www.fujifilmusa.com\/products\/medical\/]<\/figcaption><\/figure>As described above, Fujifilm became successful by flexibly corresponding to\u00a0the risk and business opportunity by digitalization so far. For comparison, Kodak, its rival company, went bankrupt in 2012 because it could not correspond to a business reform of digitization but persistently clung to old technology such as photographic film and digital camera.[9]<\/p>\n

 <\/p>\n

Future suggestions<\/strong><\/p>\n

As an instance of further advancement with the application of digital technology, the company may step into a completely non-related business field just as they\u00a0entered in cosmetics business. For instance, the company\u00a0may actively enter into currently-unavailable service field such as expansion to virtual reality (VR) field requiring a high image processing technology or health checkup at home by applying digital technology as an extension of healthcare business.<\/p>\n

(795 words)<\/p>\n

 <\/p>\n

References<\/p>\n

[1] Reuters. 2016. Fujifilm Holdings Corp (4901.T) Company Profile | Reuters.com. Available at: http:\/\/www.reuters.com\/finance\/stocks\/companyProfile?symbol=4901.T<\/a><\/p>\n

[2] Kana Inagaki And Juro Osawa. 2016. How Fujifilm Charted Different Course Than Kodak – WSJ . Available at:<\/p>\n

http:\/\/www.wsj.com\/articles\/SB10001424052970203750404577170481473958516<\/a><\/p>\n

[3] Fujifilm Corporation, Annual reports (2000) Archives. Available at:<\/p>\n

http:\/\/www.fujifilmholdings.com\/en\/investors\/ir_library\/annual_reports\/archives\/#h2-11<\/a><\/p>\n

[4] Monocle (2013) Renewal process – issue 60 – magazine. Available at:<\/p>\n

https:\/\/monocle.com\/magazine\/issues\/60\/renewal-process\/<\/a><\/p>\n

[5] New York Times, Estrin, J. (2015) Kodak\u2019s First digital moment. Available at:<\/p>\n

http:\/\/lens.blogs.nytimes.com\/2015\/08\/12\/kodaks-first-digital-moment\/?_r=0<\/a><\/p>\n

[6] Fujifilm Corporation, Annual reports (2016) Segment information. Available at:<\/p>\n

http:\/\/www.fujifilmholdings.com\/en\/investors\/performance_and_finance\/segment_information\/<\/a><\/p>\n

[7] Foundation, N.C. (2011) Fujifilm finds new life in cosmetics. Available at:<\/p>\n

http:\/\/www.nippon.com\/en\/features\/c00511\/<\/a><\/p>\n

[8] The Economist, <\/u>K.N.C (2012) Sharper focus. Available at:<\/p>\n

http:\/\/www.economist.com\/blogs\/schumpeter\/2012\/01\/how-fujifilm-survived<\/a><\/p>\n

[9] WSJ Munir, K. (2012) The demise of Kodak: Five reasons. Available at:<\/p>\n

http:\/\/blogs.wsj.com\/source\/2012\/02\/26\/the-demise-of-kodak-five-reasons\/<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The photographic film industry faced a crisis in the early 2000s. 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