Kodak zooms in on Asia

newsmaker COO and President Philip J. Faraci wants to learn to better operate and partner companies in the region, as well as ensure continuing growth and innovation.
Written by Kevin Kwang, Contributor
Philip Faraci

newsmaker Once teetering on the brink of being irrelevant at the turn of the 21st century, former film giant Eastman Kodak has adopted and continues to develop, the digital technology that nearly brought the company to its knees.

Thanks to this refocus, Kodak's digital business is now worth US$5 billion to US$6 billion "and growing", according to the company's president and COO Philip J. Faraci.

Together with chairman and CEO Antonio Perez, Faraci can take heart from having turned the company around and revitalizing one of the world's most recognizable brands. The two former Hewlett-Packard alums were key drivers of Kodak's move into digital technology. Faraci joined the company in 2004, and was appointed COO in September 2007.

In an interview with ZDNet Asia during his recent visit to Singapore, Faraci touched on his top three concerns as the company's president. He also highlighted Kodak's partnership with the Philippine government to introduce e-voting, and explained why Asia is important to him and the company.

Eastman Kodak has made a major leap to become a significant player in the digital business realm. What role did you play in this transformation?
Faraci: I'm the leader and driver of our digital strategy, portfolio and product line so I would say I've got a pretty extensive role.

One of the more innovative technologies introduced during my time as president is our stream inkjet technology, Prosper. This is a print technology that offers offset class functionality in a conventional direct-print technology, with print speeds of up to 4,000 pages a minute. What this means is we shoot drops of ink on paper that approaches up to 1 million drops per second across thousands across multiple pages.

As a result, this speed, together with screen resolution and cost per print, is comparable to offset printing, which I think is a pretty big contribution to the printing world today.

The company has also made a shift from being product-focused to becoming more solutions- and people-centric.

With the technology available today providing us the ability to do more with digital print and communicate more effective through print media, companies will have to transform their workflows and processes. We see this need in the industry, which is why we are providing our resources and expertise for them to make the transition.

So how would you measure success for your leadership and the company's development?
My definition of success would be when our customers tell me: "Kodak is my best partner to help me grow." We conduct a survey every year, and this is one of the key questions we always ask.

For me, I want to see Kodak viewed as the best partner and supplier that these companies have--100 percent of the time.

How is Kodak leveraging emerging technologies to better reach out to its customers?
Let me illustrate this with the example of our partnership with the Philippine government to provide electronic balloting cards to every voter in the nation for the upcoming presidential elections this year.

We had provided them printing equipment (five Kodak VersaMark VL 4000 printers) and are working closely with the Commission on Elections (Comelec) to ensure 52 million personalized balloting cards are printed out and sent to every voter before polling begins in April.

Since the printers were only switched on in February, this means our printers would have to print over 50 million cards in just a little more than a month. This equates to an output of about 1 million votes per day.

Compared with traditional offset printing technology, this project would have been impossible to accomplish. Even with laser printers, you will have to line up a 100 of these machines and print at all hours, and yet, still require a year before all the votes are printed.

How aboout social media? What's your view on it as a marketing and communication tool?
We already make use of social media in limited geographies, particularly in our marketing communications in North America, Mexico and Latin America. Our database in the Asia-Pacific region, however, is not strong.

We use this primarily to track our customers and how they engage us with their activities worldwide, and we continually refine our process to make sure we know their needs.

But, I personally think blended advertizing campaigns are more effective than single-platform campaigns.

For example, if I use print to communicate my advertizing pitch, I can expect a double-digit percentage return in consumer response. If I use the Internet, it will be difficult to get over 1 percent return, while television or radio campaigns will bring slightly more than 2 percent.

However, if I makes use of all three in a single campaign, my e-mail response rate from consumers will go up by a factor of 10, which would boost the overall response rate for my blended campaign above any single-platform advertizing model.

Is there any update on your lawsuits with Apple and Research In Motion (RIM)?
We have a number of licensing for our intellectual property, and we really don't comment on cases that are still in court proceedings. I can only say that the process we have chosen to embark on has a very tight time-clock on it and starting a lawsuit forces us to get to a resolution.

We were not making progress over a very long period of time, and we view that these companies were utilizing key technologies we had developed without any way for us to get compensation, which is why we are forcing the process. But, I'm sure we will get to a resolution as we go through the next year.

What are your top three concerns as president of Kodak in today's business climate?
The company's primary goals drive my concerns, I would say.

With that in mind, my first priority would be to move the company away from being very protective over the past 18 months and to drive customer value, which in turn would drive the culture of growth.

Second, it would be to embrace Asia. As a company, we have not put as much focus on Asia as we need to. This means finding out how to learn from the companies in the region and partner these companies more effectively. What are the top companies to work in the region? What are the cultural norms of doing business here? There's a lot of learning we need to do.

We need to be much more open and focused on this region, and we need to change our cultural and management thinking.

Taking this point one step further, I think we also need to pay more attention to the emerging countries of the world, which is the economic development of the future.

Third, it is to keep up the rate of innovation, whether it is in key technologies, business models or solving operational problems.

Zooming in on your point of embracing Asia, could you share more of the company's strategy for the region?
We are growing dramatically and seeing significant uptake in packaging solutions, and we have seen the region leapfrogging technologies and jumping to digital printing solutions, even pioneering some of these solutions.

Again, the Philippines election comes to mind. It's the first time we have seen a government take such a bold stance to direct ballot communications for everybody. Most countries, the United States included, have been talking about e-voting but it will be a few years before they embark on such a project.

Last year, we grew our development capabilities in the region by 20 to 25 percent, and we continue to be in expansion mode in Asia. We are also focusing on our go-to-market strategies, whether through our subsidiaries or through distributors, such as we do in Singapore and hope to equip our distributors better through focused training.

In terms of consumer products such as digital cameras, we are really small here.

We were the ones that invented the first digital camera in 1975, but we have not developed the focus or portfolio in the region. I guess this is probably because there are so many Asian manufacturers that have chosen this as their area of focus, even though we have always been in the top 3 [digital camera manufacturers] worldwide.

We're strong in North America, Latin America and parts of Europe, but we're typically not very strong in Asia, and never have been, it's just the way it is.

This is probably something that we will address over time, but it's not something that is as much a priority for us as our enterprise business.

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