EASTMAN KODAK CASE STUDY
Eastman Kodak Case Study Name Institutional Affiliation
Introduction
In the changing world of technology, change is the only constant. The business The business which lacks the capacity to embrace change cannot succeed in the competitive world. Precedences show that change and innovation in technology challenge the success of the market leaders. Right strategy plays a critical role, and many leaders lost their market leadership without it (Jackson, !"#. $odak, based on an innovative idea and product of that time, was a market leader in the film based photography photography products. In "%&', the business business invested and launched launched the first digital camera. The business was the primary innovator of the digital technology with appro approima imatel tely y ).* billion billion worth patients patients..
+fter +fter touching touching the new heights heights of succes success, s, the
company filed a bankruptcy suit in !" (ucas -oh, !"/#. The assignment aims to analy0e the $odak1s digital imaging strategy critically, the reason behind its failure, and identifying alternative strategies. In the end, some logical and rational recommendations will be presented to regain lost success in the future. Q1. What was Kodak's diital imain stratey durin 1!!"#"$1"%
$odak is one of the pioneers of the digital revolution, but was not bale to keep pace with the fast changing customer2s needs. The competitors were following $odak, but the market dynamics were changing drastically. $odak, then ventured a 3iche strategy offering the product for a selected market. The business uses this strategy to limit the threat of substitute $odak was the market leader in film4based photography which dominated the market for decades. The
EASTMAN KODAK CASE STUDY
business known for its innovative and creative approach was unable to meet the changing needs of the market. The company employed cost leadership which has shown its limits in this case. $odak used ra0or4blade model where the products were offered at the lowest price. The business was unable to sustain as the competitors such as 5u6i soon imitated the cost leadership. The sales volume volume determine determined d the profi profitt margin margin which which was practiced practiced by a ma6ori ma6ority ty of the opp opponen onent, t, resulting in reducing customers and commoditi0ing of their profit. The client started perceiving the product offered as the low 7uality which adversely affected the product and brand image (8$odak 3et8, !"*#. $odak is one of the pioneers of the digital revolution, but was not bale to keep pace with the fast changing customer2s needs. The competitors were following $odak, but the market dynamics were changing drastically. $odak, then ventured a 3iche strategy offering the product for a selected market. The business uses this strategy to limit the threat of substitutes. The company wanted to present a broad range of product to the customers, but the real challenge was how successful successful the business business could switch to new focused strategy. strategy. It needed competencies, competencies, marketing, and technology (8$odak 3et8, !"*#. The net strategic landmark was the development and implementation of the 9igital :trategy, which focused on the imaging industry (8$odak 3et8, !"*#. The strategy was based on the following three themes; ".
+n incremental approach based on building a presence by developing and offering offering services
and product according to technological changes and advancements. $odak provided a hybrid camera with a combination of traditional and digital photography.
EASTMAN KODAK CASE STUDY
.
9ifferentiation strategy was employed to offer different product and services to commercial commercial
and customer markets. The product and services provided to various segments reflected price differentials as well. /.
$odak $odak enter entered ed into into partner partnershi ships ps and and alli alliance ancess to to add add compe competit titive ive advant advantage. age. The
partnerships included leading hardware and software business to add competitive advantage. Q". Why did the stratey fail &e s(ecific offerin an in#de(th analysis)
+fter the success of :ony 9igital
e made a risky, but a rewarding choice to switch to film and later by investing in the color film. +pparently, these two options options were risky, risky, but it was essential essential to prepare the business business for the future. This time, time, even after accurately forecasting future trends, $odak was unable to respond to future needs. The core business competency of low4cost leadership became the core rigidities. The decision was delayed, and when the company decided to take the native and diversify? it took years to make the first first ac7uisition. ac7uisition. $odak was etremely etremely slow in embracing embracing change. change. The perfect product product mentality resulted in the slow transition into digital photography, and innovation failure. The business didn2t fail because it missed the digital revolution. In fact, it was the first one to identify it, but it held back as it feared to lose lose the lucrative film business. $odak played ignorant to the fact that the new digital market was reshaping the whole industry (8=astman $odak
EASTMAN KODAK CASE STUDY
Q*. Was there a etter alternati+e% &,e s(ecific with them and identification of s(ecific strateies)
Today, the success of any business depends on its ability to change and innovation. The business seeks success should keep a critical eye on the changing market and respond the to changing needs more vigilantly. $odak was able to identify what was coming, but lost the opportunity as it never prepared itself for the digital revolution. Instead of persisting with low cost leadership strategy in traditional photography, the business should have diversified to the digital photography taking the risk as it was taken by eorge =astman in the past (an0olla+nderson, !"!#. @y using diversifying strategy, the business can escape the declining industry. The growth should sho uld focus the stakehold stakeholder er intere interest st and not only the management management.. The business can, also effectively reduce the variance in the profit flows ($enny, !!%#. Q-. It is summer "$1" what ad+ice you would i+e to the Kodak oard aout Kodak's ne/t ste(s &once aain you must offer s(ecific strateies # y name # and 0ustification on why your (ro(osed strateies are est).
It is important that $odak should discontinue the unprofitable products and invest in resear research ch and develop developmen mentt of more more innovat innovative ive digita digitall product productss which which custom customer er need. need. The business should employ creativity, research, and development in order to come up with new and innovative products to inspire and attract the customers. $odak should also move to the other
EASTMAN KODAK CASE STUDY
segments of the market such ass entertainment and movies to regain the lost market share. $eeping the primary focus on the high potential product, $odak should concentrate on the 3iche markets in the beginning. Therefore, the use diversification strategy and offer customer new and innovative product, initially targeting 3iche markets ($enny, !!%#. Conclusion
$odak, once a market leader, touched the sea bottom in !" because of its rigid approac approach h toward towardss change change and innovat innovation ion.. In the world world of compet competiti itive ve world world of bus busine iness ss dominated by technology, innovation, and globali0ation, the business success depends on the company2s potential to identify changing market dynamics, competition, customer2s needs, and future trends. $odak was the pioneer of the digital revolution, but was not bale to keep pace with the changing market. The competitors were following $odak, but the market dynamics were changing drastically. 3ow $odak should diversification strategy and offer customer new and innovative product, initially targeting 3iche markets. +t the same time, $odak should aim to attain attain and retain the economies economies of scale. scale. + >igher level of diversifi diversification cation is not a guarantee guarantee of higher performance and success will mainly will depend on market research, potential to identify and respond to change.
EASTMAN KODAK CASE STUDY
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