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Introduction

The Eastman Kodak Company, which commonly known as Kodak is an American company
which focuses on imaging, photographic and equipment. Kodak Eastman was founded in
1888 and that time KODAK camera was launched into market in that time with their slogan
You press the button, we do the rest, as the same time Kodak become very well-known and
successful since they invented roll film from glass photographic in 1888 which have been
widely used across the glove (Kodak, 2016).
In early 1976, Kodak able to monopolized films industry in United States because of its as it
used to have the highest percentage share which is 90% in film market and 85% of camera
sales. (The Economist, 2012). But eventually, Kodak was starting to struggle when
globalization came with the new type of photography which is digital at that time. Although
its strange, at that time Kodak already foreseen that digital is the future of photograph but
failed to change for the upcoming technology. The one who invented digital camera for the
first time is Steve Sasson which is one of the Kodaks employee in 1973 that introduce it to
Kodaks high executives, business, marketing and technical development that later (The
Australian Financial Review, 2015) and the camera. Yet, Kodak did not want to invest the
digital camera because they consider that if they place the digital camera in the market, it
would kill their films sales which can reduce their sales. Kodaks unwillingness to change
and adopt to the environment pace is the main reason why they filed for their bankruptcy in
2012. (The Australian Financial Review, 2015).
This essays will cover about Kodaks strategic decision failure towards the environment
changing which led them to bankruptcy. Some concepts and theories will also be
implemented to describe how Kodak respond to change, which later followed by
recommendation and conclusion.

Kodaks Challenges and Obstacles


Kodak was ahead of the others in that time since Kodak invested heavily in R&D and in 1963
Kodak has become the first choice of customers by creating a strong brand image
(Athukorala, 2013). Kodak became so successful it surpassed their sales by 10 billion dollars
in 1981 (Kodak, 2016). According to Athukorala (2013) and Mendes (n.d), Eastman have
guiding principle that identified as the core principles they become successful by Focusing on
customers value expectation, Invest heavily in advertising, Worldwide distribution, Mass
production at low cost and observing customer growth through research.
In the 1990s, Kodak face a lot of struggle and strategic mistakes. There are three obstacles
that Kodak faced or having tough time to overcome. Edwin Land, the founder of Polaroid
who invented instant camera that developed pictures within one minute. Kodak feels
threatened that Polaroid might be taking profit from Kodaks chemicals and film, so Kodak
develop their own instant camera to fight Polaroid. Instead getting back all their market
shares, Kodak was sued and lost $ 909 million dollars to Polaroid in court because of instant
camera patent belong to Polaroid (Athukorala, 2013).
Second challenge that Kodak was facing that Kodak was losing their customers back in 1984
to Fuji in term of roll of films. The main reason why Kodaks customers in United States
switched to Fujis product after launching a colour film that was 20% cheaper than Kodaks
(Mendes, n.d.). Kodak was stunned to accept that a company was able to take Kodaks
customers would be foreign Company. Fuji managed to achieve this because of Fuji was
willing lower the price to sell high volume of films to rapidly growing merchandiser such as
Wal-Mart at that time (Athukorala, 2013). Customers that turned back from Kodak also aware
of Fujis presence because Fuji sponsored big event such as L.A Olympics back at 1984. Fuji
gain the market share so much that it took Kodak to lost $1.2 billion sales and need to layoff
as many as 19,900 workers.
Third challenge that Kodak faced was the incoming digital-era of photography.

Digital photography
o Digital photography offered consumers a better value but one wiped out a
decent way for Kodak to make money.

o Digital film Flash Memory was allow margin proposition even if you had
the huge gaps needed to produce it. And even though Kodak was number two
in digital cameras by 1999, it lost $60 on each one it sold.
o In one of many bids to replicate its silver halide business model In digital
photography, Kodak offered a photo cd film-based digital imaging product
but since it was priced at $500 per player and 20 dollar per disc it did not
attract many customers.

Kodak Resisting to Change


The transition from analog to digital imaging brought several challenge which are:

Digital imaging was based on general purpose semiconductor technology platform


that had nothing todo with film manufacturing it had its own scale and learning

curves.
Digital technology is modular which means that a good engineer can buy all the parts
that are needed and create a camera by it own. It does not need sp`ecialized skill or
experience to do it.

Semiconductor technology is outside Kodaks core and organizational capabilities.

Kodaks struggling to changes


According to (Reger, 1994) Globalization, increased competition, and global recession are
forcing companies to make major changes.
This apply to Kodak because globalization the future of photos are digital, Kodak foresee this
coming but they did not handle it very well.

In the past managers had two choices for implementing fundamental change, they

could use either incremental or revolutionary processes.


Tectonic implementation mode
Incremental change processes introduce minor adjustments that are most suitable for
firms in stable environments
o However, many organizations have found that incremental solutions are
inadequate to keep pace with today;s complex and dynamic business
environment
o Firms that attempt fundamental change through incremental processes are
likely to encounter drift
Strategic drift is when environmental conditions are shifting faster than
organizational responses
o Results increasing gap between the firm and its environment.
Unlikely allow a firm to remain competitive in todays face-paced

environment
Revolutionary change process
o Generate significant internal conflict because they challenge employees basic
assumption about the very nature of the firm
o Need to create from blank page, companies are not blank page, they are full

and rich of cultures and history which resist emptying


o Managers face a dilemma

Recommendation
Conclusion
(Reger, 1994)
Bibliography
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Available at: http://www.thesundayleader.lk/2013/05/05/how-did-kodak-kill-itself/
Cohan, P., 2011. How Success killed Eastman Kodak. [Online]
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[Accessed 11 September 2016].
Kodak, 2016. Kodak. [Online]
Available at: http://www.kodak.com/country/US/en/corp/kodakHistory/1980_1989.shtml
[Accessed 11 September 2016].
Kodak, 2016. Kodak.com Milestones. [Online]
Available at: http://www.kodak.com/ek/us/en/corp/aboutus/heritage/milestones/default.htm
[Accessed 11 September 2016].
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mindsets". The Academy of Management Executiive, 8(4), p. 31.
The Australian Financial Review, 2015. In 1975, this Kodak employee invented the digital
camera. His bosses made him hide it.. [Online]

Available at: http://www.afr.com/technology/in-1975-this-kodak-employee-invented-thedigital-camera-his-bosses-made-him-hide-it-20150813-k9zo8


[Accessed 13 September 2016].
The Economist, 2012. The last Kodak moment?. [Online]
Available at: http://www.economist.com/node/21542796
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Reger, R.K., Mullane, J.V., Gustafson, L.T., DeMarie, S.M. & al, e. 1994, "Creating
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Retrieved

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killed-eastman-kodak/#52e5508e4d86
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The Economist. 2012. Retrieved: http://www.economist.com/node/21542796


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