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Kevin Williams

horizontal integration.War On All Fronts      Traditional business under attack. Every link in value chain will change. New technology will displace old. Economics of value creation changing. . Vertical vs.

NI down from $1. Revenue flat for 15 years.Kodak Results      1999: Brand worth $14.8B. Stock < 50% of value in 2000.9B.900.5B to net losses. From 145.300 employees to 26. . now $3.

Kodak Stock Performance .

Kodak—Fundamental Questions      What are their core competencies? What is their strategic focus? How did they create value? What does the brand mean? Was there any way to stop Fuji? Would it have made sense to try?  What business are they in?  What business should they be in? .

Core Competency  Internal. adhesives.  Is hard to imitate. Microsoft—integrated OS and applications software for Intel-based PCs. specialized expertise that:  Provides access to a variety of markets. (SCA)  Examples:     3M—substrates. Black & Decker—small electric motors. . Honda—internal combustion engines. coatings.  Increases benefits to the customer.

Customer Intimacy . Market Niches.Strategic Focus Product Innovation/ Differentiation Infrastructure/ Operational Efficiency Relationships.

”  “Leadership came from marketing and relationships. Customer focus. Growth through continuous research.  “avoided anything risky or innovative”  “Quality [is] our fighting argument.”  Guiding principles:      Mass production at low cost.Kodak Focus  “Success came from user-friendly product…convenient…marketing. Extensive advertising.” . International distribution.

Money came from consumables.Value Chain Capture • Mechanical • Electronic Process • Chemistry • Software Storage • Shoebox • Digital Output • Lab/Paper • Disk/Paper Delivery • Retail • Online “Kodak was a film/chemical company.” .

know-how. Winner’s curse.Cognitive Traps       The lure of new technology. The threat of new technology. Inappropriate business definition. The infinite extensibility of brand.  2nd System Syndrome. competencies can change quickly. . processes. People. resources.

DEC. Google.  Brand extensions often sub-optimize value: Polaroid. Rolex. e. Marlboro. Southwest Airlines. Not Brand  Good marketing programs seek to dominate a category.Think Category.  As categories fade. so will the brand.  Examples: Starbucks. . not build a brand.  New categories need a new brand.g.  The best brands are narrow but deep. Coke. Kodak. Red Bull.

Samsung…in cameras! . Canon.Kodak Strategy Develop all new competencies to… Beat HP in printers! Beat Adobe at SW! Beat Nikon. Sony.

What Could Kodak Have Done?  Defend the film business!       Create a fun film brand to position against Fuji. Tap international markets.  Look for new opportunities in chemical processing markets. pros. prosumers). . Strong arm distributors. Own the high end (movies. Undercut Fuji in Asia. Slow the adoption of digital cameras.

values.  It may be easier to abandon a market for new opportunities. Chemicals. Tobacco.  Markets don’t end abruptly. processes.Additional Takeaway Points  You can’t survive if your entire business environment changes. know-how. brands. Computing. .  Photography. physical assets don’t change quickly or easily.  Core competencies can evolve but people.

Kodak Paper Plant .