1. Strategic project FUJIFILM Group A2 Dalina Ferrante Ernesto Ferrero
Daniel Hall
Ralph Ho
Stian Lofstad
Yoji Suetsugu

2. Analoge vs Digital VS

3. Agenda Industry characteristics Industry analysis The Fuji company
SWOT analysis
Strategic issues
Recommendations

4. The imaging industry is an oligopoly…
Others
With several barriers to entry
Capital requirements
EoS production
Brand perception

5. characterized by increasing concentration
Others
Others
49%
78%
Big five
Big five
1980
2003

6. C4 ratio nearly doubled in the last 20 yrs
and rising C4 ratio…
C4 ratio nearly doubled in the last 20 yrs

7. Sales are booming for digital cameras…
$ ‘000

8. and camphones are growing even faster
From 1.2m in 2001 to 18.3m in 2005

9. “My God, mega-pixels are cheap now!”$

10. Five forces affecting companies
SUPPLIER POWER
(-)Price sensitivity
(-)Bargaining power
THREAT OF ENTRANTS
(+)Economies of scale
(-)Absolute cost adv.
(+)Capital requirements
(+)Product differentiation
(+)Access to dist.
Channels
(-)Government/legal
barriers
(-)Retaliation by est.
producers
INDUSTRY RIVALRY
(+)Concentration
(+)Competitor diversity
(+)Product differentiation
(-)Excess capacity
(-)Exit barriers
(+)Cost conditions
THREAT OF SUBSTITUTES
(+/-)Buyer propensity
(+)Relative prices and performance
BUYER POWER
(-)Price sensitivity
(-)Bargaining power

11. Enter Fuji Fuji photo film Founded in 1934
Sales : $ 18.1 billion (2002)
Employees 72,000(2002)
2nd largest film provider in the world

12. Where does Fuji make its money?
56.4%
Others
21.5%
Rest of the world
European market: 13.3%
2004.3

13. Strong price competition
Price competition is hurting Fuji
Sales
million
EBIT
Strong price competition

14. Is Fuji over-relying on “old” products?
Other
products

15. Pleasing different markets
Digital/Hardware
Instant camera “Cheki”
One-time-use-camera
Lens-attached film)
Analog/Film

16. Digital imaging is R&D – intensive
Stable 6% R&D
Competitors ~5%
R&D budget/Sales

17. Fuji’s customer segments and product lines
Professional
Commercial
IMAGING SOLUTIONS
Film
Digital camera
Photographic paper
INFORMATION SOLUTIONS
Photographic paper
Graphic art
Recording media
DOCUMENT SOLUTIONS
Recording media
Color copiers
Color printing systems
Fax

18. FinePix – Fuji’s digital cameras
Sensible
A-Series
Sophisticated
F-Series
Serious
S-Series
Point & shoot ease
Compact size
Easy download
Price $130 - $150
Unique form
Additional features
Price $300 - $500
Traditional SLR - style look
Long zooms
Price above $ 500

19. SWOT analysis Weaknesses Strengths -Strong brand name
-Flexibile business model and
marketing mix
-Technological advantage
-Originally not digital maker
-Strong influence from Japan
Opportunities
Threats
-Change in customer preference
-More familiar with taking pic
-Storage problem of customer
-Picture making goes home
-Camphone popularity
-Decreasing demand of analog film

20. Strategic issues – need for actions
--Threat of decreasing demand of traditional products.
26%

21. What do you associate with Fujifilm?

22. How can Fuji gain competitive advantage?
Pursue cost leadership
Make processing digital images to
paper easier
Establish a leading role as supplier to
camphone manufacturers
Retain traditional products
Bundle products
Focus on high-end digital cameras
Rebuild the Fuji brand

23. Thank you
Questions?

24. Backup slides

25. Fuji has fought battles and won before
1950s Battle with Konica in Japanese market
Fuji focused on quality and technology
1971
Deregulation of Japanese film market
Started fighting with “Giant” Kodak
Fuji decide to focus on quality (Sensitivity)
Kodacolor vs Fujicolor
Fujicolor 400 (4times higher in quality)
Share of Japan market became around 70%
Into the world market

26. Speed – Keeping customers happy
Mini-labo network
Reduce developing time 1day a few hours

27. Mission and Values
To be the recognized leader in providing integrated solutions to meet each customer’s imaging and information needs
Commitment to people
Continuous process improvement
Customer driven
Open communication
Teamwork
Individual and Organizational Accountability

28. Organizational Policy
Imaging and Information
(I&I)
LIGHT
THIN
SHORT
FOCUS
Continuos Restructuring
Team work basis
Life time employment
Seniority level

29. Promotion
Arts
Sport Events
Sponsorships
brand image

30. Strong R&D Source of quality and speed
Film industry -- Oligopolistic and technology driven
Most important technologies were patented by Competitors
Difficult to use patent, OEM
Necessary for Fuji to start from the begging

31. Example: One time use camera “ Utsurun-desu”
-Lense attached film
-Recycle camera
-Collect not only film
but camera itself
Called “Vein flow”
Production
Reprocess
Customer
shop
develop
Called “Artery flow”

32. Digital products Film & printing
Are Fuji over-relying on “old” products?
Revenue of each products & service (Imaging solution)
Digital products
30%
Film & printing
55%
Others

33. Strategic issues and actions
--Organization issue
Keep its organization active and efficient by “continuous restructuring” since 1980’s
Brand recognition of Fuji as a digital camera manufacturer is lower than those of other competitors such as Canon, Sony and Olympus
Both globalization and diversification of Fuji would make its organization bigger, uncertain and also require additional managerial cost and skills.

34. Strategic issues and actions
--High growth and competition among digital market

35. Focusing on making High quality film
History
Quality and speed
Focusing on making High quality film
Fuji color ISO 100
Fuji color FⅡ400
Sensitivity×4
Fuji color Super HR 400
Quality×4

36. How can Fuji gain competitive advantage?
Bundling sales
1+1 > 2
Digital cameras with potable printers
Digital cameras with memory cards
Brand building as a digital camera manufacturer
Build a strong brand image of digital cameras