'Kodak Essay\r'

'Foreword\r\nDuring 2011, Kodak was under intense constrict to survive in the digital imagination stock. As professor Burley describes, ‘Kodak was caught in a perfect tempest of not only technological, precisely also mixer and economic swap’ (Neate, 2012). As of Thursday 19 January 2012, Kodak filed for bankruptcy protection (Neate, 2012) and has until 2013 to reshape its concern and lapse out of the bankruptcy plan ( air Spectator, 2012).\r\nIntroduction\r\nEastman Kodak (Kodak) was erstwhile a leader (Finnerty, 2000) and legendary bulls eye in the photographic film industry (Associated Press, 2011b). It used the eye-catching slogan â€Å"You press the button, we do the rest” (Kodak, 2011) to achieverfully market its digital tv camera products. It employed as many as 145,300 people and sales as lavishly as $16 billion when it monopolized the US photography industry and became number one in the industry in 1988 (Dobbin, 2011). Recently, Kodak lost 90 portion of its market assess (Weiss, 2011) and is facing the threat of ex experimental conditionination (Associated Press, 2011b). In this case study, we pro sit and defend a recommended strategic direction for the gild to implement in the next terce to pentad years found on a balanced assessment of the order’s options. We first conduct a lucubrate analysis of Kodak’s internal and external environments to watch the opportunities and threats facing the company.\r\nAnalysis\r\nKodak has assay to trans variate itself from an antique old film applied science lineage into a fast and digital closed byplay but has failed as a result of decline in sales in the United States (Deutsch, 2004). It is still trying to play catch-up with rivals (Associated Press, 2011b) much(prenominal) as Canon, Sony and HP for the archeozoic(prenominal) 15 years. Its current products and services span across digital cameras, inkjet targeters, sensors, retail kiosks, workflow and dividing line crop services and softw are through and through to consumer, professional photographic film, paper processing chemical substances and industrial materials much(prenominal) as films for printed circuit boards (Kodak, 2010). Through the help of drug and discounts stores, Kodak was suit sufficient to add self-service kiosks to encourage people to print their own digital photos (Deutsch, 2004). Kodak formed strategic word ventures with companies same(p) Sanofi, AOL online (Grant, 2005), and most recently in 2007 Cinelabs (Beijing) Ltd (Kodak, 2007). It has tried to acquire several smaller successful companies such(prenominal) as Ofoto and Practice works to fill in the missing pieces of technology and markets that it did not cook capabilities in (Deutsch, 2004).\r\nStrengths\r\nKodak has several strengths to distinguish itself from rivals. Kodak has superior snitch fruition (Aaker, 1992; Deutsch, 2004; Grant, 2005) as compared to rival brands such as Agfa bas e on US consumer reports (Simonson et al., 1994). Its brand was supported by its massive gentlemanwide distribution presence through retail photography stores, film processors and professional photographers which provided Kodak with the agonistic advantage (Grant, 2005). Kodak leads in the higher-end photo quality camera segment (Smith, 1999) where it launched its major innovations in imaging (Grant, 2005). Traditionally, Kodak has strengths in photofinishing services and consumables such as paper, ink and chemical technology (Grant, 2005). This is derived from a rich portfolio of 11,000 patents (Associated Press, 2011b) derived from a toil approximately R& vitamin A;D enthronization during the early 1980s (Grant, 2005). Kodak was financially secure with cash flows flow rate from its existing photography communication channel during the early nineties (Grant, 2005).\r\nWeaknesses\r\nOn the other hand, Kodak has weaknesses. Kodak avoided taking jeopardizes, they were not soph isticated affluent and relied on existing procedures and policies to maintain standards (Gavetti et al., 2005). They were soft to bring invigorated products to market (Grant, 2005). Its retail mesh topology of stores was a depreciating asset due to the ontogeny use of home computers, email and print technologies (Grant, 2005). Kodak accent too heavily on the extremely agonistical entry-level market and failed to develop innovative products fast enough (Grant, 2005). Its product development and sales departments were fragmented and dislocated over many di good deals (Gavetti et al., 2005). Subsequently, Kodak’s middle managers were resistant to castrate and did not understand the digital world (Gavetti et al., 2005; Lucus & angstrom unit; Goh, 2009). Kodak managers ignored analysis work ground on information gained from Kodak’s eroding market share (Gavetti et al., 2005). Kodak managers lacked vision and strategy (Gavetti et al., 2005).\r\nOpportunities\r\nA few opportunities exist for Kodak. It flock build consumer trust in digital that Kodak already has in film (Smith, 1999). Kodak could focus on its core business and develop bran-new-fashioned technologies (Gavetti et al., 2005) and new products (Deutsch, 2004).\r\nThreats\r\nHowever, Kodak get outing suffer long term threats to its core franchise in the film business if it does not extend its brand name to digital (Smith, 1999). IBISWorld forecasts the demand for physical photographs would fall due to improvements in digital technology (IBISWorld, 2011). Kodak has been in battles with other competitors such as Sony over patent infringements (Deutsch, 2004; Associated Press, 2011a). It has been struggling with a price war between strong competitors such as Fuji Photo Film (Smith, 1999) in the photographic film industry. Industry analysis †usher’s five forces\r\nThreat of Entry\r\nAn analysis of the industry utilize Porter’s five forces shows that threat of new entry is moderate. Signifi endt investment in capital would be required to bow a new industry (Select Knowledge, 2001) such as the digital imaging and photography industry. Printing equipment such as hardware, software, photographic paper and chemicals is estimated to be 45.7% of leverages versus requital at 26.8% of revenue (IBISWorld, 2011). New entrants would lack be intimate and knowledge in key areas of digital imaging and photography such as technical and business knowledge (Greenwood, 2008). Buyer world-beater\r\nThe buying power of consumers is high especially for consumer electronics (Skoloda, 2009). Buyers are given a range of diverseiated digital camera products from a number of companies (IBISWorld, 2010). They expect divulge oblations and customization of goods and services (Fraser, 2007).\r\nprovider power\r\nSupplier power is low. A drove of the suppliers are located near the world two locally and internationally. Kodak has several supplier contracts spa nning one to three years (Kodak, 2010). However, at that place are single or limited sources of finished goods manufactured and purchased by the company’s third party suppliers which whitethorn pose a risk for the organization (Kodak, 2010). Unique suppliers go off reduce industry profitability (McGuigan et al., 2010).\r\nThreat of successor\r\nThe threat of substitutes is high. Companies are quick to match specifications, features and set (Select Knowledge, 2001). There are minimal switching be between brands or substitutes as buyers advise buoy change to new updated models based on reasonable buyer perception (Select Knowledge, 2001).\r\nCompetitive contender\r\nCompetitive rivalry is high. Kodak’s faces intense competition from rivals such as start-ups (Grant, 2005; IBISWorld, 2010; Smith, 1999;) and major competitors are Canon, Fuji Photo Film, Hewlett Packard (HP), Nikon and Sony (Gavetti et al., 2005). Similarly, Kodak is competing in similar segments wit h rivals †Hewlett-Packard (HP) to provide digital printing technology to consumers and commercial businesses (Weiss, 2011). Kodak (2010) states that warring pricing and rising trade good prices has contributed to the negative results for 2010 across its prepress solutions, digital capture and devices, and entertainment imaging (Kodak, 2010).\r\nExternal Analysis\r\nThere are several external (political and legal, economic, socio-cultural and technological) factors which impact Kodak’s business model. Political and legal Laws and government environmental regulations have an impact to the way Kodak operates in several different countries. For ex deoxyadenosine monophosphatele, U.S federal legislations such as the Toxic substances authorisation act, clean air and water act etcetera impact the way Kodak manufactures products and process waste for suitable disposal (Kodak, 2010). In 2003, it needed to form a committee to reduce odours which descended towards nearby neig hborhoods (Kodak, 2006).\r\nEconomical\r\nFrom an economical view, the decline in prices has made it affordable for consumers to purchase digital cameras (IBISWorld, 2010). However, forecasts show that standalone digital cameras have reached a state of market saturation with little way of life for future growth (IBISWorld, 2010).\r\nSocio-cultural and Technological\r\nDigital cameras became an in integrated and standard feature in mobile phones (IBISWorld, 2010). increase trends show that consumers are taking and sharing photos on mobile phones daily (Okabe, 2004). The archiving and exchange functions for photos have been facilitated by online communities and social practices (Scifo, 2009), such as Facebook (Upbin, 2011), and mobile social-media applications (Naaman et al., 2005). intemperate competition between rivals is expected for new 3D camera technology on mobile phones (AFP, 2010).\r\nStrategy, approaches & international ampere; implications\r\nIn order for Kodak to susta in a competitive advantage, it inescapably to strategically transform its entire business model around to capture new and queer growth opportunities. There are several options which Kodak set up explore to achieve this strategy. The options below focus on structural changes in the industry and resources (skills and capabilities) in the arranging.\r\nBusiness Process Re-engineering (BPR)\r\nKodak can buoy reconstruct the organisation using business process re-engineering practices. Its current traditional photographic business is vertically integrated (Grant, 2005). The organisation can be redesigned from a vertically to a horizontally integrated organisation through process-oriented organizational restructuring, offering a to a greater extent low-level flat organisational building (Wu & Li, 2011). The result gives improved efficiency and business simplification (Wu & Li, 2011) for Kodak to compete effectively in a tough competitive environment where it needs to quickly deliver innovative products out to market. Kodak can focus on its historical core competencies in film chemistry, production and processing (Garrett, 2010), so that it can create new markets, products and services. BPR gives obvious benefits such as the reduction in complex bureaucracy in the organisation (Wu & Li, 2011). However, as cited by Greenberg (2002), there are limitations in BPR such as tube to change, lack of management support\r\netc. (Schniederjans & Kim, 2003).\r\nRebranding\r\nOther opportunities exists for Kodak, it can change its name from Eastman Kodak ships company to say Kodak Communication (Deutsch, 2004), or as Hopelain suggests, it provide need to establish a separate Kodak applied science brand (Deutsch, 2004). An organisation’s strategy and trading operations will be potentially impacted by the scope of corporate rebranding (Burke et al., 2011). S filmholder commitment needs to be achieved for the revised brand to be successful (Burke e t al., 2011). It will involve staff in planning for proposed changes and education employees for changes (Burke et al., 2011). Any rebrand will impact the value of the brand (Davis & Baldwin, 2006). Rebranding will involve a rotary of communication and stakeholder involvement (Davis & Baldwin, 2006). Poor corporate rebranding can be a high risk (Davis & Baldwin, 2006) for the organisation where core values may not integrate wholesome into the new brand (Burke et al., 2011).\r\nLeadership and organisational learning\r\nKodak will need to condition staff, especially managers in weak areas on vision and strategy (Gavetti et al., 2005). For example, managers can be taught ‘design methods’, to overprotect growth, evolve, and react as the marketplace (Rahim & Rahim, 2009) and exploiter needs changes so that the business model can evolve to bypass extinction (Fraser, 2007). Similarly, Apple evolved with the drug user to new opportunities, it did not live to the constraints of its current business model (Fraser, 2007). Subsequently, Kodak will need to discontinue some of its products, especially in saturated markets such as digital cameras (IBISWorld, 2010) where profit margins are low (Pride & Ferrell, 2007) and competition is fierce. It can better utilise its resources and real core competencies (Garrett, 2010) to make it difficult to imitate its products (Prahalad & Hamel, 1990) and demonstrate leadership. However, leaders would need to be able to influence teams indirectly through climate and culture in the organisation (Kaiser et al., 2008). Technology enabled transformations will bear upon the importance of organisational culture (Lucus & Goh, 2009) where hierarchy and standards provides impedance to disruptive technologies (Lucus & Goh, 2009).\r\nJoint ventures and outsourcing\r\nKodak can form joint ventures with other companies. It can create new emerging industries or new value propositions, alliances and collaborationism †to be form by complementing and adding to its capabilities and resources (Camillus, 2000). It can furnish heavily on its existing patent portfolio (Deutsch, 2004). Kodak will need to outsource a lot more of its manufacturing (Deutsch, 2004), while part-time and casual staff can lead to the reduction of labour costs (IBISWorld, 2011). positive care needs to be taken where processes of high strategic importance should not be outsourced (Sounderpandian & Sinha, 2007). The result will allow Kodak, to develop new competencies for future developments and sustain the importance of long-term success (Utterback, 1995).\r\nRecommendation\r\nTo sustain competitive advantage, Kodak needs to strategically transform its entire business model around to capture new and unique growth opportunities. It is recommended that Kodak, take the BPR and organisational learning approach, to improve efficiency and simplify the organisation; leadership to communicate and influence vision and change (Bolman & Deal, 2008); to capture new business models and better match user needs and economic value (Fraser, 2007). Larsen & Leinsdorff (1998) research suggests that BPR and organisational learning work well together (Larsen & Leinsdorff, 1998). Though, developing a legitimate strategy is not going to be loose for a digital imaging business (Grant, 2005) like Kodak. It will be Kodak’s last jeopardy to ‘reinvigorate their human capital to get fore of the curve’ (Fraser, 2007, p.67).\r\n'