International Business

CASE 1

(a) What was the critical catalyst that led Kodak to start taking the Japanese market seriously?

Kodak: The Changing Strategies By 2000, Kodak, the company that pioneered the imaging industry by inventing easy-to-use cameras and photographic film, was in deep crisis. With the advent of digital cameras in the mid 1990s, Kodak found its sales declining as consumers preferred the new cameras, which did not use films. The growing popularity of digital cameras led to a slump in film sales, which was a major revenue generator for Kodak. Additionally, the new technology attracted a lot of competition from traditional as well as new players. In order to maintain its lead in the industry, Kodak decided to adopt the new technology and reinvent itself from a camera and film manufacturer to a digital imaging company. The case discusses the evolution of the digital camera market and the shrinking film business. It also highlights the strategies

adopted by Kodak to embrace the new technology to sustain its leadership position.

(b) From the evidence given in the case do you think Kodak’s charges of unfair trading practices against Fuji are valid? Support your answer.

On December 5, 1997 the US lost its first major trade dispute in the newly formed

World Trade Organization(WTO). The high-profile case pitted photographic paper and film giants Kodak and Fuji against one another along with their respective governments, the US and Japan. Kodak claimed that Japan's photographic market & distribution structure, "deny[ed] [Kodak] fair and equitable market opportunities."1 Essentially, Kodak was arguing that it could not penetrate the Japanese market beyond a certain level due to structural restraints, government intervention, and back-room policies that favored Fuji.8 On the other hand, Fuji & the Japanese government contended that Kodak's poor showing in Japan was due to deficient marketing, management, and investment in the Japanese market. Fuji and the...