FUJIFILM Sonosite, Inc.

𝐅𝐔𝐉𝐈𝐅𝐈𝐋𝐌 𝐯𝐬. 𝐊𝐨𝐝𝐚𝐤: A Tale of Two Strategies When digital imaging disrupted the photographic film market in the late 1990s and early 2000s, both Kodak and Fujifilm saw their core business in structural decline. Still, their responses could not have been more different. 𝐅𝐔𝐉𝐈𝐅𝐈𝐋𝐌 Fujifilm treated the situation as a fast-moving and real crisis. By the early 2000s, Fujifilm’s new CEO, Shigetaka Komori, openly acknowledged that film would disappear completely. He acted early and aggressively to replace lost revenue before the full impact of the collapse was felt. He immediately launched a comprehensive corporate transformation, which included drastic cost-cutting in existing business while reinvesting in new growth areas outside the sector, deploying capital wisely. The only exception was R&D investment, as he believed it would result in long-term value creation. In 2001, FUJIFILM acquired a majority stake in Fuji Xerox, which became a subsidiary and formed its Business Innovation division. Today, BI accounts for 30% of its revenue. FUJIFILM also attempted to leverage existing technology, such as film chemistry, into new applications, including LCDs, inkjet systems, cosmetics, and healthcare. FUJIFILM also made decisive moves in healthcare, highlighted by major acquisitions such as Toyama ($1.5B in 2008), Sonosite ($1B in 2012), and Hitachi Medical ($1.5B in 2021). Healthcare now accounts for 32% of the company’s revenue, and FUJIFILM has become a leading force in Medical Imaging. The company has recently announced a $1.6B expansion in Denmark to grow its biopharmaceutical operations. Today, FUJIFILM Corporation generates more than $20B in annual revenue. That is an increase of over 90% compared to its pre-crisis era. 𝐊𝐨𝐝𝐚𝐤 Kodak, on the other hand, treated the situation as a slow-moving one that could be managed and believed that Kodak’s brand would carry through. Kodak CEO George Fisher pushed for digital but lacked organizational alignment. His successors also reversed or diluted the strategy. Kodak also talked about diversification, but instead of diversifying out of a declining sector, it diversified within it. Kodak divested its healthcare division, Carestream, in 2007 to Onex for $2.4B to “focus on its core business”. It then attempted to establish a consumer digital camera business, but the rise of smartphones quickly disrupted it. The company also invested heavily in consumer printers, which became another shrinking category. Beyond these bets, Kodak’s other strategic moves were late, limited, and lacked conviction. Ultimately, Kodak never managed to create a strong new pillar before the crisis destroyed the old one. In 2012, Kodak eventually filed for bankruptcy. In 2014, Eastman Kodak Company reemerged as a manufacturing company focusing on print and enterprise inkjet systems. Today, Kodak has approximately $1B in annual revenue, representing a decline of over 90% from its pre-crisis era.