The film company that saved itself with face cream
When digital cameras destroyed its core business, Fujifilm asked a better question than its rivals: not what do we sell, but what do we know?
In the year 2000, photographic film was one of the best businesses in the world. Every holiday, wedding and birthday ended with a roll being developed, and Fujifilm was one of the two global giants selling it. Photography made up around 60 per cent of its sales and two-thirds of its profits. Within a decade, that market had almost disappeared.
Born to make film
Fuji Photo Film was founded in 1934 with a national mission: to make photographic film in Japan, rather than importing it. Over the following decades it grew into a world leader, famous for its green boxes of film and, later, for challenging the American giant Kodak on its home turf. By the late 1990s, the two companies dominated the industry.
The fall of film
Digital cameras, and then phone cameras, did not just shrink demand for film; they erased it. Industry estimates suggest the market collapsed by more than 90 per cent in under ten years. For a company built on film, this was not a bad year. It was the end of its core product.
Kodak faced exactly the same moment. Ironically, one of its own engineers, Steve Sasson, had built one of the first digital cameras back in 1975. But the company struggled to move beyond the business it knew and in January 2012 filed for bankruptcy protection. Fujifilm took a different road.
The man who saw it coming
Shigetaka Komori became president of Fujifilm in 2000, just as the market peaked. He later described being gripped by "a strong sense of mission" as he watched the core business shrink at a spectacular rate. Rather than defend film for as long as possible, he decided to act while the company still had money to invest.
The first steps were painful. Fujifilm cut thousands of jobs and closed facilities connected to film. Then, in 2006, it dropped "Photo" from its name, reorganised as a holding company and opened new research laboratories. Komori called it a "second founding".
Kodak asked what it sold. Fujifilm asked what it knew.
What does a film company actually know?
Komori's team made a detailed map of every technology Fujifilm had built over 70 years and asked where each could be valuable outside photography. It turned out a film company knew a great deal. Making film requires deep expertise in chemistry: working with collagen (the gelatin in film comes from it), controlling light, preventing oxidation so photographs do not fade, and engineering incredibly thin layers of material at the nanoscale.
Those skills pointed in unexpected directions.
From photographs to skin
The most surprising move was skincare. Skin, like a photograph, is damaged by ultraviolet light and oxidation, and is full of collagen. Fujifilm applied its film chemistry to skin ageing and in 2007 launched Astalift, a skincare line built around astaxanthin, a powerful red antioxidant. It sounded like an odd move for a camera company. Astalift grew into an international brand.
The big bet: healthcare
The larger bet was medicine. Fujifilm already made X-ray film and medical imaging equipment, which gave it credibility with hospitals. It expanded into diagnostics and bought companies to move faster, including the drug maker Toyama Chemical in 2008, the ultrasound company SonoSite in 2012, and biotechnology manufacturing businesses that now produce medicines for pharmaceutical companies. It also became a major supplier of the specialist films used inside LCD screens.
Photography did not vanish from the company either. Its instax instant cameras became a hit with a new generation, and its digital cameras found a loyal following among enthusiasts. By its 2015 financial year, Fujifilm was reporting record profits, despite having lost most of the business it was founded on.
Why it worked
Most companies define themselves by their products. Fujifilm defined itself by its capabilities. That shift, from "we sell film" to "we are experts in chemistry, light and materials", opened markets that had nothing to do with photography. Three choices made the difference: it moved early, while the old business still funded the new; it was honest about what had to be cut; and it built on real strengths instead of chasing fashionable markets it knew nothing about.
The lesson
Reinvention is not free, and it is not quick. Fujifilm spent years and billions on research and acquisitions before the new businesses paid off, and thousands of employees lost their jobs along the way. But the alternative, as Kodak showed, can be far worse. Every company eventually faces its own "film moment", when the thing it sells stops being needed. The question is whether it has ever asked what it really knows.
What does your company really know how to do?
