Fujifilm’s Masterclass in Corporate Rebirth: The Second Foundation

Faced with a collapsing market, Kodak planned its way into bankruptcy. Here is why Fujifilm’s Shigetaka Komori abandoned the traditional PDCA cycle to save his company.

Every conversation with a chatbot, every image a model generates, runs on chips polished flat by a chemical slurry applied in layers measured in atoms. The company with the world’s largest market share in that slurry for copper wiring is not a chemicals giant you have heard of. It is Fujifilm, which twenty years ago sold photographic film in green boxes in every pharmacy in Japan.

Its closest rival, Eastman Kodak, had invented the digital camera in 1975 and still led the American market in 2005. On 19 January 2012 Kodak filed for Chapter 11, listing debts of $6.75 billion. Fujifilm, from almost the same starting point, did not. Both companies saw digital photography coming. Kodak kept planning around the business it had always run. Fujifilm, under CEO Shigetaka Komori, chose to look at what it actually knew how to do.

Six months

For most of the 1990s the digital threat seemed to recede. Fujifilm’s first fully digital camera came out in 1988, but digital stayed the preserve of professionals, and film kept selling. Sales peaked around 2000. Then, in 2003, the decline arrived not as a gradual fade but as a sudden discontinuity. According to the documentary Fujifilm: A Century of Innovation and Survival, within six months Japanese photo-processing shops went from handling close to 5,000 rolls of film per day to fewer than 1,000. A market that had produced nearly 70 percent of Fujifilm’s profit had effectively ceased to exist. Komori later described it as an earth-shattering event that arrived in the blink of an eye.

The 2006 decision

Komori’s New Year message to staff, as recorded in the same documentary, left little room for comfort: “We can’t wait any longer. Now is the time to ruthlessly cut production and manufacturing, and spare only what is essential.” Film plants closed, thousands of jobs went. In a normal corporate crisis, that would be the whole story. What made Fujifilm different was that while closing plants, Komori simultaneously spent $400 million building a new research facility — a building dedicated entirely to new business development. The cuts and the investment ran together, and the message to the organisation was not one of retreat.

Inside that facility, scientists were given a specific brief: find commercial uses for the chemical expertise accumulated over nine decades of film research. Precision thin-film coating, antioxidation chemistry, collagen science, nanoparticle dispersion — the toolkit of photographic film turned out to have applications far beyond photography. Fujifilm called the strategy “intellectual fusion” and the broader project the Second Foundation, a name Komori chose deliberately, framing the company’s survival as a second founding rather than a restructuring.

See before you plan

Central to Komori’s thinking was a critique of how most companies handle disruption. The standard corporate improvement cycle, Plan-Do-Check-Act (PDCA), works on the assumption that past experience provides a useful foundation for planning. In a collapsing market, that assumption becomes a trap: the plan is built from the logic of a business that no longer exists, which means the more carefully you execute it, the further you travel in the wrong direction.

Komori’s replacement was STPD, or See-Think-Plan-Do, a framework that puts observation before analysis. Fujifilm’s own governance documentation describes the shift: “With the growing speed of social change, our previous business experience and accumulated knowledge no longer apply to a growing range of our business activities. For this reason, the Fujifilm Group has upgraded its existing approach to PDCA and established STPD independently to facilitate action from new perspectives.”

The documentary captures Kodak’s failure in a single exchange: company leadership knew it needed to become a digital company but could not define what that meant. Fujifilm asked a prior question: what does this company actually know how to do?

What the answer produced

In Bengaluru, in 2021, Fujifilm India and Dr. Kutty’s Healthcare opened a health-screening center called NURA. A patient walks in, undergoes imaging across multiple organs, and receives results within two hours. Fujifilm’s REiLI platform, running on its Pixel Shine low-dose CT imaging, analyses those scans using image science developed across ninety years of understanding how light resolves and how signal separates from noise. Fujifilm chose India as its first market because the five-year cancer survival rate there is roughly 30 percent, against 70 percent in Japan, and the company traces that gap largely to the near-absence of routine screening. The network now covers four Indian cities, Mongolia, and Vietnam, with plans to set up 100 centers globally by 2030.

NURA is one line of descent from the film laboratory. The same precision coating underpins Fujifilm’s position as the world’s leading manufacturer of data-storage tape. The antioxidation chemistry that stopped color prints from fading became the active science in its AstraLift skincare range. The thin-film coating built for photographic emulsion is now a core material in manufacturing the semiconductors that power generative AI.

What the story does not fully tell

Not all of Fujifilm’s current scale comes from intellectual fusion. Its biologics contract-manufacturing business, now a major growth engine, originated in 2011 with the purchase of Merck’s biomanufacturing network and has grown largely through further acquisition, absorbing more than $8 billion in investment.

There is a difference between redirecting what you know into new fields and buying capability in fields you do not yet know. Fujifilm has done both, and the distinction matters when deciding which part of the story is the lesson.

What it teaches

The companies that failed alongside Kodak had access to the same data on digital adoption. What trapped them was a planning process anchored to the assumptions of a market that was already disappearing. STPD treats observation as the discipline that determines which questions are even worth asking, before any plan is formed.

Fujifilm’s Second Foundation started with an inventory: the compounds, the coatings, the science accumulated over nine decades, and the question of where else those capabilities might be worth something. Ninety years after it was founded to make Japan’s first home-grown photographic film, Fujifilm polishes AI chips, reads chest scans in Bengaluru, and stores the world’s data on coated tape. The throughline is a company that, at the moment of maximum discomfort, asked what it actually knew how to do rather than what it had always sold.