Global Linkages

1
Global Linkages
Management Linkages
Country A
Country B
Policy Linkages
Trade and Investment Linkages
2
Kodak vs. Fujifilm
Kodaks strategy Fujis strategy
Sect. 301 filing
U.S.
Japan
WTO hearing
Asymmetric market penetration
3
Importance of Japanese Market

• Stand-alone Attractiveness
• 3 ranked global market
• 9.0 billion

• Strategic Importance
• Fuji 70 share of Japanese market
• Fuji 14 of US market (1996)

4
Kodaks 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 Kodaks promotional efforts
• Large Store Law
• Kodak cuts prices, no market share gains
• Fuji has profit sanctuary to use in US market
  attacks

5
Wheres 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 B Kodak vs. Fuji (ROS)
8
Exhibit C Reciprocal Market Penetration
9
Exhibit D Yen 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
Kodaks Actions

• 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

12
Kodak-Fuji Policy Timeline

• May 1995 -- Kodak files 301 claim with USTR
• Sept. 1996 -- US takes Kodak case to WTO
• Jan. 1997 -- USTRs 301 authority expires
• Dec. 1997 -- WTO rules in Fujis favor
• Feb. 1998 -- WTO rejects USTR appeal
• Mar. 1999 -- Clinton reinstates 301 authority