more useful and more enjoyable. with a brand recognized in virtually every country around the world. Since that time. the Eastman Kodak Company has led the way with an abundance of new products and processes to make photography simpler.35 billion Kodak business includes: Printer-both industry and person Printing supplies Document image or information Film and television Aerial and industrial market Medical imaging (this was sold off). Key people of Kodak: Antonio M. entertainment and scientific applications." George Eastman put the first simple camera into the hands of a world of consumers in 1888.History of Kodak
With the slogan "you press the button.
To be the World Leader in Imaging
. but also for images used in a variety of leisure. Faraci (President and COO) Revenue US$ 6.67 billion Total equity US$ -2. we do the rest." Kodak continues to expand the ways images touch people's daily lives. In fact. Just as Eastman had a goal to make photography "as convenient as the pencil. commercial. Its reach increasingly involves the use of technology to combine images and information--creating the potential to profoundly change how people and businesses communicate.02 billion Operating income US$ -600 million Net income US$ -764 million Total assets US$ 4. Philip J. The company ranks as a premier multinational corporation. Perez Chairman and CEO. today's Kodak is known not only for photography.
They hung on to now obsolete assumptions about who took pictures. In other words. newcomers such as Sony were able to bypass one of Kodak’s massive strengths: its distribution network. With women giving way to men as primary users of cameras. their role had never been that of family archivists (a role reserved for women). Rather than being identified as a piece of purely photographic equipment. why and when. Kodak’s brand came to be associated with traditional photography rather than digital. phone or a PC without any need for hard prints. Every Picture Tells a Story With digital. women were no longer the main customers.The Demise of Kodak: Five Reasons
1. Kodak always thought that people would never part with hard prints and that people valued filmbased photos for their high quality. Similarly. 2. With digital devices. Instead. The implications of this shift were enormous. Back to the Future ―Digital‖ disrupted Kodak’s neat equilibrium in yet another important way.
. digital cameras became available in electronic retail outlets next to other gadgets. For Kodak. Caught in Time Kodak’s top management never fully grasped how the world around them was changing. digital cameras came to be seen as electronic gadgets. a significant shift in mind-set occurred in the meanings associated with cameras. but because they did not feel the need to. the severing of the link between taking photographs and hardcopy prints was a serious concern. With digital cameras. they saw digital as a direct substitute for film based photography. images could be viewed on the camera. Kodak was now playing on Sony’s and other entrants’ turf rather than its own. digital cameras came to dominate not because they offered higher quality or because everyone was able to or inclined to get a set of hard prints easily. 3. In the end. Hence they tended to take pictures that industry insiders called ―transient‖. While men took lots of pictures. It was interesting to see how little this mindset had shifted even 20 years later. Kodak—which excelled at marketing to women—lost its footing. men were.
too slow. they try to prolong the life of the existing technology by attempting to create synergies between the new technology and the old (like Photo CD). put them on paper through its printers. But doing digital from Rochester was always going to be a challenge. Kodak’s attempt to generate revenue from digital images. Kodak could not and it died trying. The best example is Kodakgallery. and consequently its strategy for revival never had much of a chance. always appeared to be under pressure to create synergies between film and digital. Then they deride it using various justifications (too expensive. Its digital imaging division. one based around sentimental images taken by women at family reunions and vacations. and edit them on in-store digital kiosks. it was: ―To make Kodak do for photos what Apple does for music: help people to organize and manage their personal library of images. Antonio Perez. Kodak’s attempts were at best half-hearted.‖ Trying to engulf the consumer in the Kodak universe was always unrealistic. consumers of the future will snap pictures on Kodak’s cameras.
. save them on its memory cards. they keep delaying any serious commitment to the new order of things. Unwilling to let go of the extremely lucrative (gross margins of nearly 70%) film business. it tried for many years to prolong the life of film through smaller cameras and digitally coded film and hybrid technologies such as Photo CD. too complicated etc). The Camera Never Lies Even when the writing was very much on the wall. In an ideal world. it kept trying to recreate the photography universe of yesteryear. they try to ignore the new technology hoping it would go away by itself.Kodak was in uncharted territory and rather than accepting it as the new reality. locked up in its headquarters in Rochester. First. As articulated by the current chairman and CEO. The site was essentially a digital version of its analogue offerings. In doing so. Lessons Learned Kodak followed a template used by many incumbents facing technological challenges to their hegemony. After that. Whereas a company like Apple could probably do it with its design and plug-and-play capabilities. Over-Exposed Kodak did not realize its own limitations.com. 5. 4. Digital’s potential was never fully realized at Kodak.
The important things were to avoid the attachment and weight of legacy assets onto new ventures. or current revenue sources. They would also have been at ease with empowering users and living with the unpredictability that it ushers in. most of all. Led by twenty-something’s on shoestring budgets these startups would have been led by people who get digital. The challenges Kodak faced were not unique. They would not have been hung up about brands.
. They would have been perfectly comfortable with the high mortality rate of digital business models. Kodak should have also invested in several start-ups based in Silicon Valley. These Valley-based companies would not have been encumbered by Kodak’s legacy assets.
Relaunch Kodak Products:
To relaunch KODAK products the company has to go through a long procedure. and would have been much more willing to allow a convergence between pictures and activities such as social networking or gaming. It should have embraced uncertainty and be prepared to be driven in unforeseen directions—a far cry from how the company had spent its life. its emotional attachment to the brand. to base strategy around users. and. unlike the people in Rochester. Finally. refrain from prolonging the life of existing product lines while trying to create false synergies between the old and the new.The truth is that when it was dabbling in digital versions of its analogue products. rather than the existing business model. The hole procedure is explained below. and its product-based mentality. In short. they would not have lived in a ―photographic universe‖. Kodak needed to let the new generation of users and entrepreneurs take charge.
technology.External environment analysis:
A company’s external environment include all relevant factor and influences outside the company boundaries.
An industry’s competitive environment tends to be attractive from a profit-making standpoint when Rivalry is moderate Entry barriers are high and no firm is likely to enter few threat from substitutes product Suppliers and customers are in a weak bargaining position
. people likes to spend much money buy this kind of products. objective. by relevant . strategy and business model. geographic dispersion. people trend etc. critical success factor. industry structure. External environment consists of five sectors: the macro environment sector. age of population. People like a camera which photo can be share electronically. competitor analysis. the demand of photography equipment will increase because women and children are main consumer of this equipment. demographic. A rapid technology change makes the traditional film business obsolete. Political /Legal: Government has a direct impact on the photography industry
Global: Kodak expand its business nearly every country around the world. no longer need to print and easy to carry. Socio-cultural: If women more are in workforce.means important enough to have a bearing on the decision the company ultimately makes about its direction. People tastes are always changing . strategic group mapping. political/legal social-culture.
Economic: If income of people increases.
The macro environment:
It’s consists of global. This all is for change of people taste and trend to digital technology Technology: The photography industry is based on technology. economic. New product innovation and huge investment in research and development in digital photography area create a new edge. We are going to discuss it Demographic: Demographic elements are population growth rates.People are no longer interested to purchase traditional camera when the digital camera are introduce. life span.
Potential new entrants: Without the main competitor of Kodak like Canon. Substitute products: Mobile and internet becomes substitute product of traditional film.Sony. The main competitor of the industry are Kodak.The secondary competitor are Konica. The bargaining power of buyers: 6|Page
. there are many opportunity for new entrance entering into this industry.Its does everything in its house.Competition and established rivals: Photography industries face a fiercer competition. The price of the competitor is low. but also add cost to the value since supplier can make or supply product at a reduce cost with added quality. So the industry is not attractive at this way.Sony. People are no longer need to print the photo.All competitors always releasing new version of product and innovations.HP etc and second level competitors. It’s a strength of a Kodak. The bargaining power of suppliers: Kodak does not rely on suppliers . It’s a technology driven based industry. health imaging document imaging or printing supplies equipment areas. Mobile phone with inbuilt digital camera makes easy to capture a picture and share through internet.Fuji.Olympus. New competitor can also enter in Kiosk.Xerox. LG and Panasonic are making inroads into digital camera market.Fuji.Hewlett-Packard(HP).
SWOT represents the first letter in
S trengths W eaknesses O pportunities T hreats For a company’s strategy to be well-conceived. Great detail of product features & uses. and (ii) its huge investment in R&D and the resulting innovations. Strong distribution channel. Good management staff.
Kodak’s core competencies are its large resource base and strong brand identity. 7|Page
. HP.HP have strong positions from which they can bargain and obtain service for their products. Strong brand image in cinematic film segment and in health imaging.Fuji.The major player in the industry –Kodak. Canon. Kodak has a worldwide iconic status in the traditional photography market.Sony. People buying capability increase for globalization and they can purchase any company product without considering price. and Olympus Optical. Kodak is Second in digital imaging. Its large resource base includes (i) its management team assembled from Kodak itself and from outside of traditional photography business: Lexmark. it must be Matched to its resource strengths and weaknesses Aimed at capturing its best market opportunities and defending against external threats to its well-being
Kodak Strengths Kodak is Iconic Brand in the world. Thirst for new technology can also ignore the price of the product.
Business level strategy is a plan of action which focuses on the direct utilization of resources. a joint venture with Hewlett Packard. If economic condition becomes downward. The traditional market is mature and has begun to decline. The Generic Business Strategy:
Cost leadership: being the lowest cost producer/suppliers in the industry. strengths and core competencies in the search of competitive advantage over rivals in a particular industry. consequently. reduce share price. Traditional markets are no longer attractive Huge Price sensitive Fierce competition in digital photography market Mobile with camera inbuilt reduces the demand of digital camera. is strongly motivated and well-resourced to defend its position. people do not attempt to purchase this type of products.
Kodak Threats Low profit earnings. Differentiation: the consumer perception of uniqueness in the product and service. Focus: Finding a market segment and concentrate activities there.Kodak Weaknesses Sales revenue are rapidly decrease EBIT are low to competitor Workforce has been cut. Hewlett Packard is the incumbent market leader in consumer inkjet printers and.
. Unprofitable product No E-Commerce
Kodak Opportunity Some technology can become obsolete even before marketing to market. Aggressive competition from traditional rivals and new entrants into the digital photography market. e. Phoenix.g.
http://articles. Kodak have had adopt strategic partnership with Motorola to supply digital cameras for that organization mobile phones.com. medical market and professional photography
. Also acquire many companies that are strategic aligned like Encad and Olympus to improve its strategic position. Corporate level strategy: Corporate level strategy is an action taken to gain a competitive advantage through the selection and management of a mix of business of business completing in several industry or product market.
Discontinue unprofitable products Investing in selective industries Improvements in products and services Brand name recognition in digital industry Innovation Improves communication and commerce Focus on high potential products Emphasize on niche market i. Another one is Kodak follow the related diversification on their product.e.Kodak follows the Cost leadership strategy but they became failure because they could not sell their products.marketwatch.