Strategy Session: Fujifilm’s Strategic Shift

Strategy Session: Fujifilm’s Strategic Shift

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Not all film companies think alike.

When taking a 10,000-foot view of the photo business landscape, it’s easy to identify the manufacturers that proceeded with blinders on as the market shifted over the last few years. Many of them are no longer with us.

But then there is Fujifilm, the 78-year-old manufacturer founded as a producer of motion picture films, which has been able to redefine what the company needs to be as the market around it changed. Fujifilm has diversified into new businesses by incorporating its core photographic technologies. 

“The business has changed,” said Manny Almeida, Fujifilm’s vice president and general manager, Imaging division, “and while the print market shifted, and the film market continued to dissolve, we had to refine who we were, and how we were going to be successful as the market changed around us.”

Fujifilm has primarily been a film and processing company over the last 50 years, but the consumer dynamic has created a new world order. “Looking back at this industry, the consumer didn’t have to be engaged in the process of making prints,” Almeida said. “Their engagement was to buy a roll of film, shoot it and bring it in to be processed. We never really asked consumers if they wanted prints because it was the only way they could see what pictures had been taken.

“Today, consumers have a choice; you can view your pictures on your phone, on your computer, on your tablet—almost anywhere there is a screen. You no longer need a 4×6 print to view your images. What used to be a singular industry, with a well-defined consumer behavior, has become multifaceted, with product offerings well beyond the traditional 4×6 print.”

So Fujifilm recognized early on that the imaging world was changing—and chose to refine its business practices to adapt to what continues to become a very different market. And Almeida recognizes that more changes are on the horizon.

“The photo printing business has to adapt to the decline in film processing and 4×6 prints, but there is also good news. Larger size prints such as 5×7 and 8×10 are still growing and present opportunities for retailers.

“And there is real value in printing; it’s just shifting,” he continued. “As an example, photo books are an excellent opportunity for retailers. Our research saw a doubling of awareness of photo books from 2010 to 2011, and we’re projecting strong, double-digit growth in 2012.”

Fujifilm also is seeing double-digit growth in holiday cards, calendars, canvas prints and other creative products. “Retailers should no longer think about printing in terms of the 4×6,” said Almeida. “Some people want prints, some want books, enlargements, T-shirts or posters. We need to deliver these to customers in a way that’s easy for them.”

The Xerox Phaser 6270 printer (a product of Fuji Xerox Co., Ltd., a subsidiary of Fujifilm Holdings Corporation) enables retailers to make cards, books and other creative products right in their stores. And their wide-format inkjet printers can easily be adapted to the photo specialty environment. “We’ve found that in most cases, even small retailers have an ROI on our wide-format inkjet printing equipment of somewhere between three to six months,” Almeida noted.

But printing is now only part of the story for Fujifilm.

“We’ve been in the digital camera business since 1988 when Fujifilm introduced the first digital camera with removable media, but while we had been out of the pro DSLR business for a few years, our brand name among pros continued to be strong—due not only to our camera heritage but to our film heritage as well.”

With the decline in the print market, the company knew they couldn’t just stand on their laurels, or make enough profit on the low end of digital cameras to keep it a viable business. Hence, the FinePix X100 was born.

I told Almeida that when I saw the X100 at photokina in 2010, I just didn’t get it. Yes, it was a beautiful, high-end pro camera, but it seemed like a one-off for Fujifilm in a market they had left years earlier.

“I had the same questions at first,” he responded, “but I knew the road map, and I realized this was not just a ‘brand statement’ for Fujifilm. This was a strategic shift in our product portfolio that made perfect sense.”

Fujifilm saw an opening in the professional and advanced amateur markets for a product that could be a high-end companion to a digital SLR. “We didn’t just make a retro camera for retro’s sake. Pros and advanced amateurs are looking for high-performance cameras that fit into their workflow. So we put knobs and dials on the camera so they didn’t have to go through on-screen menu options. We gave them a camera that could shoot silently during a wedding.”

And, most important, they gave them exceptional image quality. “We went out of our way to match our own developed sensor to our highly acclaimed Fujinon lenses, so the image is incredibly sharp, from edge to edge.”

They also realized that smaller, lighter cameras would be welcomed to a certain niche in the market. “Many new photographers coming into the market now are women,” he said. According to PPA (Professional Photographers of America) statistics, the ratio of men to women in the pro market used to be around 70/30. Now that ratio has shifted to almost 70% women. “The market still demands the highest image quality, but something easier to carry around is a welcome addition.”

So, Fujifilm once again entered the pro and advanced amateur markets, and their welcome was gratifying. “Our volume exploded; we vastly underestimated the market. Our sales reaffirmed we still had a strong brand cache within the professional market.”

Since then, Fujifilm has expanded with the lower priced FinePix X10 ($599) and at CES impressed the market with the X-Pro1, which received rave reviews (including a Photo Industry Reporter Best of the Best Award).

And, of course, Fujifilm continues to be a strong player in the point-and-shoot digital camera market as well. Their high-quality F-series cameras and long-zoom S-series models focus on segments of the market who are looking for higher quality features. “We continue to see an expansion of the mid-range cameras. As people are looking for their second and third cameras, they’re looking for higher quality and expanded features. We’re going to continue to deliver those products as well,” Almeida said.

So what does all of this mean for Fujifilm? It demonstrates impressive business acumen to recognize a shifting market and to use the company’s brand strength and core technologies to innovate new products and services to adapt and lead. As the market has shifted, Fujifilm has set a new course for success. fujifilmusa.com

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