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Global Linkages

Global Linkages. Management Linkages. Country A. Country B. Policy Linkages. Trade and Investment Linkages. Kodak vs. Fujifilm. Kodak’s strategy Fuji’s strategy. Sect. 301 filing. U.S. Japan. WTO hearing. Asymmetric market penetration. Stand-alone Attractiveness

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Global Linkages

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  1. Global Linkages Management Linkages Country A Country B Policy Linkages Trade and Investment Linkages

  2. Kodak vs. Fujifilm Kodak’s strategy Fuji’s strategy Sect. 301 filing U.S. Japan WTO hearing Asymmetric market penetration

  3. Stand-alone Attractiveness #3 ranked global market $9.0 billion Strategic Importance Fuji 70% share of Japanese market Fuji 14 % of US market (1996) Importance of Japanese Market

  4. Kodak’s Section 301 Claims: • Fuji and 4 wholesalers collude to keep Kodak out • Japan Fair Trade Commission ignores anti-trust laws; permits progressive rebates to wholesalers • JFTC & MITI limit Kodak’s promotional efforts • Large Store Law • Kodak cuts prices, no market share gains • Fuji has profit sanctuary to use in US market attacks

  5. Where’s the Evidence? Objective Data: • Sales growth • Profits • Market Share • Yen appreciation Subjective Data: • Policy obstacles? • Access to wholesalers, kiosks?

  6. Exhibit AKodak vs. Fuji (Sales in $ billions)

  7. Exhibit BKodak vs. Fuji (ROS%)

  8. Exhibit CReciprocal Market Penetration

  9. Exhibit DYen vs. Dollar

  10. Integrated Political and Market Strategies WTO Japan MITI U.S. USTR, Congress Non-market Strategies Rules of Competition Rules of Competition Japanese Market Fuji Dominant U.S. Market Kodak Dominant Market Strategies

  11. Market Actions: Price cuts? Promotions (Hawaii) Imitative innovation Co-branded film Distribution center 1998 Nagano Olympics Kodak blimp Non-market Actions: §301 Filing Lobbying US Congress PR campaign Press releases Kodak’s Actions

  12. Kodak-Fuji Policy Timeline • May 1995 -- Kodak files §301 claim with USTR • Sept. 1996 -- US takes Kodak case to WTO • Jan. 1997 -- USTR’s §301 authority expires • Dec. 1997 -- WTO rules in Fuji’s favor • Feb. 1998 -- WTO rejects USTR appeal • Mar. 1999 -- Clinton reinstates §301 authority

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