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