Transcript Strategy.GroupA02.Fuji

Strategic project
FUJIFILM
Group A2
Dalina Ferrante
Ernesto Ferrero
Daniel Hall
Ralph Ho
Stian Lofstad
Yoji Suetsugu
Analoge vs Digital
VS
Agenda
1. Industry characteristics
2. Industry analysis
3. The Fuji company
4. SWOT analysis
5. Strategic issues
6. Recommendations
The imaging industry is an oligopoly…
Kodak
12%
Fujifilm
12%
Olympus
13%
With several barriers to entry
Others
Others
22%
Canon
20%
Sony
21%
Capital requirements
EoS production
Brand perception
characterized by increasing concentration
Others
Others
49%
Big five
1980
78%
Big five
2003
and rising C4 ratio…
2003
0,7
1999
0,59
1980
C4 ratio nearly doubled
in the last 20 yrs
0,39
0
0,2
0,4
0,6
0,8
1
Sales are booming for digital cameras…
$ ‘000
2500
2000
1500
2002
2003
1000
500
0
Jan Feb Mar Apr Mai Jun Jul Aug Sep Okt Nov Des
and camphones are growing even faster
20
From 1.2m in
2001 to 18.3m
in 2005
16
12
8
4
0
2001
2002
2003
2004
2005
“My God, mega-pixels are cheap now!”
$
900
800
700
600
500
400
300
200
100
0
1998
1999
2000
2001
2002
2003
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
BUYER POWER
(-)Price sensitivity
(-)Bargaining power
THREAT OF SUBSTITUTES
(+/-)Buyer propensity
(+)Relative prices and
performance
Enter Fuji
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Fuji photo film
Founded in 1934
Sales : $ 18.1 billion (2002)
Employees 72,000(2002)
2nd largest film provider in the world
Where does Fuji make its money?
56.4%
Others
21.5%
Rest of the world
European market: 13.3%
2004.3
Price competition is hurting Fuji
Sales
10000
Japan
Others
million \
0
1999
2000
2001
2002
2003
EBIT
Strong price competition
2000
1000
0
1999
2000
2001
2002
2003
Is Fuji over-relying on “old” products?
Other
products
15 %
30 %
55 %
Pleasing different markets
Digital/Hardware
Instant camera “Cheki”
One-time-use-camera
Lens-attached film)
Analog/Film
Digital imaging is R&D – intensive
Stable 6% R&D
 Competitors ~5%

2000
10.00%
1500
1000
6.1%
6.1%
5.7%
6.1%
6.3%
5.00%
500
R&D budget/Sales
0
0.00%
1999
2000
2001
2002
2003
Fuji’s customer segments and product lines
Customer
Professional
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

Commercial
FinePix – Fuji’s digital cameras
Sensible
A-Series
•Point & shoot ease
•Compact size
•Easy download
•Price $130 - $150
Sophisticated
F-Series
•Unique form
•Additional features
•Price $300 - $500
Serious
S-Series
•Traditional SLR - style
look
•Long zooms
•Price above $ 500
SWOT analysis
Strengths
Opportunities
-Strong brand name
-Change in customer preference
-Flexibile business model and
marketing mix
-More familiar with taking pic
-Storage problem of customer
-Technological advantage
Weaknesses
Threats
-Originally not digital maker
-Picture making goes home
-Strong influence from Japan
-Camphone popularity
-Decreasing demand of analog film
Strategic issues – need for actions
--Threat of decreasing demand of traditional products.
Sales of Traditional Products of Fuji
50.00%
42.00%
40.00%
31.00%
30.00%
20.00%
26%
10.00%
0.00%
2003
2006
What do you associate with Fujifilm?
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
Thank you
Questions?
Backup slides
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
1976
Fujicolor 400 (4times higher in quality)
Share of Japan market became around 70%
Into the world market
Speed – Keeping customers happy
Mini-labo network
Reduce developing time
1day
a few hours
Number of Mini-lab in Japan
30000
20000
10000
0
85
9
1
87
9
1
89
9
1
91
9
1
93
9
1
95
9
1
97
9
1
99
9
1
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
Organizational Policy
Imaging and Information
(I&I)
LIGHT
FOCUS
SHORT
Continuos Restructuring
• Team work basis
• Life time employment
• Seniority level
THIN
Promotion
Arts
Sport Events
Sponsorships
Source of quality and speed
Strong R&D
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
Example: One time use camera “ Utsurun-desu”
-Lense attached film
-Recycle camera
-Collect not only film
but camera itself
Called “Vein flow”
Customer
shop
develop
Reprocess
Called “Artery flow”
Production
Are Fuji over-relying on “old” products?
Revenue of each products & service (Imaging solution)
30%
55%
Others
Digital products
Film & printing
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.
Strategic issues and actions
--High growth and competition among digital market
European market shares
Number of shipment
Others
23%
6000
Sony
21%
Sony
Canon
Olympus
Kodak
Fujifilm
Others
4000
2000
Fujifilm
11%
0
Canon
20%
1989
1990
Kodak
12%
1991
1992
1993
Olympus
13%
1994
1995
History
Quality and speed
Focusing on making High quality film
1970 Fuji color ISO 100
Sensitivity×4
1976 Fuji color FⅡ400
Quality×4
1984 Fuji color Super HR 400
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