Latest / The Pivot Podcast with Fexingo: How Businesses Change Direction and Survive Disruption / How Fujifilm Pivoted from Photographic Film to Medical Imaging and Cosmetics
Transcript
- Lucas: So in the year 2000, Fujifilm was one of the most profitable companies in Japan. They sold over 200 billion yen worth of photographic film. Then digital cameras happened, and within a decade, that market essentially vanished. But unlike Kodak, Fujifilm didn't go bankrupt. They survived by becoming a completely different company. Luna: I think most people know Kodak's story, but Fujifilm's is less famous. What made their response so different? Lucas: A lot comes down to the CEO at the time, Shigetaka Komori. He took over in 2000, right as the peak hit. And he made a very deliberate decision: instead of trying to fight digital cameras directly, he looked at what Fujifilm's core competency actually was. And it wasn't just making film — it was chemistry. Specifically, the chemistry of colloids, emulsions, and fine particles. Luna: Right, because film is essentially a chemical process. Light-sensitive silver halide crystals suspended in gelatin. Lucas: Exactly. So Komori said, 'We know how to control particles at the nanoscale. We know how to manufacture things with extreme precision. Where else can we apply that?' And the answer was: medical imaging, because X-ray films use similar silver halide technology. And also cosmetics, because the collagen in skin is structurally similar to the gelatin in film. Luna: That's wild. So a moisturizer can trace its roots back to photographic emulsion chemistry? Lucas: Literally. Fujifilm's skincare line, Astalift, uses the same collagen technology they developed for film. They realized that the protein chemistry was transferable. But that wasn't the main pivot. The big bet was medical systems. They invested heavily in digital X-ray machines, mammography, endoscopy, and eventually diagnostics and pharmaceuticals. Luna: How did that play out? I mean, shifting from a B2C film company to a B2B healthcare company is a massive strategic leap. Lucas: It took roughly 15 years. And it wasn't smooth. They had to invest billions in R&D and acquisitions. For example, in 2010 they bought the medical imaging division of a company called SonoSite for around $300 million. They also acquired a cancer drug company called Toyama Chemical in 2005. But Komori was patient. He set a target: by 2020, healthcare would be the largest segment. And it happened. Luna: What does their revenue breakdown look like now? I've heard they actually make more from medical than film ever did. Lucas: As of the 2025 fiscal year, Fujifilm's total revenue was about $22 billion. Healthcare — including medical imaging, pharmaceuticals, and regenerative medicine — accounted for roughly 35% of that. Materials science, which includes industrial films, electronic materials, and cosmetics, was another 25%. So together, about 60% of revenue comes from areas that barely existed 20 years ago. Film is now less than 5%. Luna: That is a complete reinvention. And you mentioned acquisitions—did they also sell off any parts to fund this? Lucas: They did. They continued to milk the film business while it still generated cash, but they didn't sell it off entirely. Instead, they streamlined it. They also spun off some non-core divisions. But the key was they never stopped investing in new technology. Komori once said, 'We didn't want to be a company that just survives. We wanted to be a company that evolves.' Luna: It's interesting that they didn't try to compete in consumer digital cameras that aggressively. I mean, they made some, but they weren't the focus. That seems like a smart choice. Lucas: Yeah, they had a small digital camera line, but they knew they couldn't beat Canon or Nikon. Instead, they focused on a niche: the X100 series, which is a retro-styled fixed-lens camera. That became a cult hit, but it's a tiny market. The real money was in B2B applications. And this is where Fujifilm's story offers a lesson for any company facing disruption. Look at what you're really good at, not just what you sell. Luna: Right, because so many companies define themselves by their product category. 'We are a film company.' That's a trap. Better to say, 'We are experts in precision chemistry.' Lucas: Exactly. And that's why Kodak failed. Kodak defined itself as a film company, so when film died, they had nothing. They tried to pivot to printing and digital cameras, but those were also commoditized. Kodak's bankruptcy was essentially a failure to recognize their own core competency. Luna: There's also a cultural element, isn't there? Komori was an executive who had been in the film business for decades, but he was willing to cannibalize it. Lucas: Absolutely. He wrote a book about it called 'Kawaru Kigyou' — 'The Changing Company.' He talks about the need for 'creative destruction' from within. Even when film was still profitable, he started diverting resources to new ventures. That takes guts, because the film division managers were furious. But he had the board's support and a long-term vision. Luna: Speaking of long-term, how do they sustain this diversification now? Are they still investing in new areas? Lucas: Yes, they're betting on regenerative medicine and gene therapy. They built a cell therapy facility in California. They're also working on ai based diagnostics for radiology. The idea is to leverage their imaging expertise into digital health. So the pivot is not a one-time event—it's an ongoing process. Luna: I want to linger on the cosmetics angle for a second. How does a company that makes medical devices also sell face cream? Isn't that a stretch? Lucas: It sounds odd, but the science is sound. The main active ingredient in Fujifilm's skincare is a type of collagen derived from fish scales, which they originally developed to stabilize gelatin in film. They also use antioxidants that prevent oxidation—same principle as keeping film from degrading. So it's not a gimmick. They have like 30 patents in cosmetics. And the brand, Astalift, is actually popular in Asia, especially for anti-aging. Luna: So it's a nice example of a pivot that's both logical and unexpected. Lucas: Yeah. And it shows that a pivot doesn't have to be a single radical move. You can have multiple parallel transformations. Fujifilm today is basically three companies in one: healthcare, materials, and still a little bit of imaging. Luna: If these conversations have moved your work forward in some small way, we want you to know that this podcast exists because of a simple thing: a small group of listeners chips in monthly through buy me a coffee dot com slash fexingo. And that literally funds making this many episodes. Lucas: Yeah, no ads, no sponsors. Just people who find value in what we do. If that's you, you can contribute at buy me a coffee dot com slash fexingo. Luna: So, back to Fujifilm. I've read that they also expanded into printer supplies and electronic materials. How does that fit? Lucas: Another natural extension. The precision coating technology used for film is also used to make specialized films for LCD screens and semiconductors. They're actually a major supplier of color filters for displays. And they make photoresists for chip manufacturing. So again, it's the same core capability applied to different markets. Luna: It's almost like they treated their technology as a platform rather than a product. That's a powerful mental model. Lucas: Exactly. And that's the takeaway. If you're a leader facing disruption, ask yourself: what are the deep, often invisible capabilities that my company has? Not what you sell, but what you know how to do. That's where the pivot opportunities lie. Luna: Especially for companies that have been around a long time. They accumulate a lot of latent expertise that might not be obvious. Lucas: Right. Fujifilm's story is a masterclass in that. And it's still unfolding. Their latest quarterly earnings, just a few weeks ago, showed healthcare revenue growing 12% year-over-year. The pivot is paying off. Luna: One thing I wonder: could other legacy manufacturers replicate this? Or is there something unique about Fujifilm's chemistry-based core? Lucas: I think the principle is universal. Look at a company like Yamaha — they started making musical instruments, then applied their expertise in materials and acoustics to motorcycles, electronics, and even golf clubs. The key is to identify the underlying skill set and redeploy it. Not every company will succeed, but it's a framework worth testing. Luna: So for our listeners, next time you see a Fujifilm camera or a tube of Astalift cream, you'll know it's the result of a decades-long strategic bet. Lucas: Exactly. And a reminder that disruption can be met with reinvention, not just resistance.