Fujifilm Holdings Corporation SWOT and PESTLE Analysis

Strength

1. Partnership with Xerox group: FujiFilm group had a strong FY 2015-2016, which also marks the second year of Vision 2016. The operating income grew at 10.9% year on year at ¥191.2 billion.In 2018, the photocopier pioneer announced the total takeover of Xerox and merge the U.S company into their joint venture Fuji Xerox in a record $6.1 billion deal. The takeover of Xerox group will create a global leader in innovative print technologies and intelligent work solutions with $18 billion in revenue, thus accelerating path to the revenue growth through a larger customer base and an enhanced global reach. The takeover will also provide flexibility and financial leverage for improved strategic growth investments and attractive capital returns. The combined company will have enhanced prospects for revenue growth and margin expansion. The transaction will also unlock a sunstiancial shareholder value and forming a formidable combined company will be significantly stronger and a more competitive company.

2. Strong Leadership: The company appointed Kenji Sukeno as the new President and the COO in June 2016, under whose leadership the company has carried out the Vision 2016 initiative which has given a profitable return. They will also start formulating the next medium-term management plan. This clear vision and goal setting will help the company to get a strategic position and deliver on its objectives. Kenji Sukeno has immense experience with the company and his 12-year tenure in the United Kingdom, as well as the United States, will be useful in the global expansion of the Company.Fujifilm Holdings featured on Forbes Lists of Top Regarded Companies - #204, Global 2000 -#447, World's Best Employers- #412 and America's Best Employers - #387 in 2017.

3. Increasing operating efficiency: One trend which has significantly improved over the past year couple of years is the operating income as a percentage of revenue. In the last three financial year when the revenue was more or less the same, the operating income surpassed each year from the previous year, improving from 5.8% in March 2014 to 6.9% in March 2015 to 7.7% in March 2016. This increasing trend clearly shows the improvement in efficiency and an overall reduction in the wastage of the products. This positive growth is significant because it depicts that the company is overall working on its inefficiencies and thus fine-tuning its operations to add to the bottom line of the company.

4. Strong focus on R&D and innovation: FujiFilm group has been consistent with their strong R&D expenditure, maintaining the expenditure at 6.5% of the revenue generated. With a continuous focus on innovation, Fujifilm is making steady progress in creating new values. In April 2016, the Company established an Informatics Research Laboratory to develop state-of-the-art technologies in the field of informatics science with a focus on IoT and Artificial Intelligence in the creation of the new products.The company has redefined and reinforced its innovation-based growth trajectory with the launch of the latest variety of its XP series its camera. A recent example is the launch of the FinePix XP130 which includes the recent bluetooth technology, and enables instant and automatic image transmission to tablet and smartphone devices over easy paring process. Notably, with the free FUJIFILM Camera Remote application, users would be able to sync location- and time-related information from the FinePix XP130 camera to the images.

5. Strong Financial Performance and Strategy: FujiFilm group had a strong FY 2017, marking strong successive years of Vision 2016. The operating income was up 20bps to 12.8% within the 12.5-13.5% range. The revenue for the same financial year stands at $9.6 billion for Fuji Xerox and $20 billion for the Fujifilm with an exchange of JPY114:$1. The company also has a combined R&D of $1 billion which shows a significant importance given to innovation. Majority of revenue (~46%) is generated by the document solution unit and Information Solutions providing around 39% revenue to the overall company.

Weakness

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Opportunity

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Threat

1. Digitization and Changing Technologies: There has been a sharp decline in demand for color films since its peak in 2001. Although the company has managed to successfully evolve and restructure its business to open up segments like document solutions which now contributes 47% to the overall revenues;however, disruptive technologies such as Big Data and Artificial intelligence pose a bigger challenge. The key to survival will be adapting and adoption of such upcoming technologies which could also open new ventures and profit pools for the organization.

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Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. Promoting the concept of RealGreen – Real Energy efficiency: The FujiFilm group is working on various activities which contribute sustainably to the environment. The company has developed a Sustainable Value Plan 2016 which focuses on four priority fields in which the company can take action and help the environment by solving the social issues involved. The concept RealGreen implies that in the product development stage itself by focusing on conservation of energy, the impact on the global environment is reduced. Thus by integrating social issues and business, new ventures could be opened like the Silver Amplification technology used for detection of influenza virus at an early stage, which aligns with the goal of resolving public health issues.

2. Undertaking initiatives for improved living: The focus of the company to solve social issues such as Extension of healthy life expectancy, Secure and robust infrastructure, Environment and address the consumer needs in these initiatives,is becoming a pillar of growth for the organization. The company needs to develop an environment of open innovation by synergizing its own core technologies and advanced technology outside the company, thus not limiting itself and proposing comprehensive solutions. Few key areas on which the company can focus are extension of healthy life expectancy, food, and agriculture and secure infrastructure.

3. Natural disasters impacting manufacturing operations: With relevance to the firm's manufacturing activities, natural or man-made disasters can affect its operating efficiency and given that the home country, Japan has a documented proof of natural disasters, it is imperative for the company to safeguard itself against such measures. The 2016 kumamoto earthquake which took place in April damages were inflicted on Fujifilm Kyushu which is one of the leading factories in Japan. Due to the damages, the production was halted for two weeks but the impact on the supply was minimum.