George Eastman founded Eastman Kodak Co. in 1892 for offering imaging products that support leisure, Commercial, entertainment, and scientific purposes. The Company also traded on the New York Stock Exchange and in 2008 reported over $9 billion in revenue and $9 billion in assets.
Introduction
George Eastman founded Eastman Kodak Co. in 1892 for offering imaging products that support leisure, Commercial, entertainment, and scientific purposes. The Company also traded on the New York Stock Exchange and in 2008 reported over $9 billion in revenue and $9 billion in assets. Kodak has an organization, along three segments:
- Graphic Communications Group (GCG)
- Film, Photofinishing, and Entertainment Group (FPEG)
- Consumer Digital Imaging Group (CDG)
The history of Kodak is marked by its innovation. However, it has struggled to maintain its legacy since it was slow in reacting to the digital revolution.
Key Objectives:
A leader of innovation while it lasted, Kodak needs to develop new objectives that will include all the necessary business functions as like human resource function, the finance function and the operational functions. The five key objectives that the company should develop are as follows:
1. Focus on communicating a clearer message, a differentiating guarantee, and products that convene such a promise.
2. The marketing promotions to deliver one path within the imaging process, which will allow the processing of the company‘s offerings by the customers.
3. Additional emphasis on digital cameras along with the products like photo frames, printers, and Kodak gallery.
4. BPR (Business Process Reengineering) and organizational learning approach, for improving competence and abridge the organization; for capturing new business models and create economic value: promote leadership that exchanges and implements the vision and change.
5. Joint Venture and Outsourcing
Kodak in the recent times fails in the positioning of itself as the undeniable solution bridging today’s customers and their needs of the association. In this scenario, Kodak’s objective of delivering a clear message will help it better position itself. The example could be Kodak is the premier provider of imaging solutions that bring your loved ones within arm’s reach.
All these objectives will help Eastman Kodak to achieve some success in the cloud service industry. With the entry of new cloud service companies like Instagram, Picassa, and Flickr, the Kodak will have to face competitive rivalry with these companies. By focusing on the clear differentiating message and differentiated message, Kodak can rebuild its confidence in the consumers as Kodak has been one of the most-preferred brands in the past. So, unlike for Instagram and Picassa, it will be easy for Kodak to develop a strong customer base in cloud service industry. In addition to that, development of new products likes digital photo frames and Kodak gallery with high-end features like instant editing if photo, sharing in social medias, storing it in the cloud database, accessibility for a different purpose from anywhere in the world will attract more customers.These features will increase the competitiveness of Kodak, and it will be the threat for existing cloud service companies.
BPR (Business Process Reengineering) and organizational learning approach, for improving competence and abridge the organization to capture new business model and identify the leader with vision is very important for success in the cloud service industry. With a visionary leader in the company, the company will be able to visualize its future beforehand and develop its strategy. Kodak, being the industry leader, never thought that people want a service like Instagram, Picassa and Flickr. It was the unexpected product that entered the industry and got success. So, to get success in the cloud service industry, it is very important to reengineer the business process and identify the product that will be trendy in the future. By reengineering the existing business process, Kodak can enter into cloud service industry with an aggressive strategy developed by the visionary leader. In this case, if Kodak is not competent to enter the cloud service industry alone, then it can look for outsourcing companies that will add the competitiveness in the products of Kodak. Joint venture with the companies that will strengthen the business process in the cloud service industry and create synergy will be fruitful to achieve the success in the cloud service industry.
Moreover, the one image process marketing objective will help Kodak to prioritize its marketing efforts according to different processes. The idea is to focus on the message of one product at a time rather than overloading target customers with the Kodak options.
Changing the vertically integrated company into a horizontally integrated organization with the use of BPR can help deliver improved efficiency and business simplification. Delivering innovative products into the market to cater the needs of today’s target customers, Kodak needs an effective organizational integration.
Kodak can create new-emerging business and create new value propositions, alliances and corporations through joint ventures and outsourcing.
The focus of Kodak should be on digital cameras as well as equipment supporting digital cameras as complementary products. This focus creates value as the all-round digital imaging experience. This strategy is lent by 120-year history of Kodak as the premier provider of photographic products.
Kodak Integration Systems
The integration can be of two types:
- Vertical Integration at Kodak:
If a company operated at more than one level of the distribution channel, the Company is said to be using a vertical integration strategy. In this orientation, the distribution channel begins with the manufacturer that produces the product. The manufacturer then sells the product to a wholesaler. The wholesaler then sells to retailers, who will eventually sell it to end customers. It is called forward vertical integration when a manufacturer sells directly to end customers. Conversely, it is said to be backward vertical integration when a wholesaler or retailer manufacturers the same.
The advantages of Vertical Integration for Kodak could be:
- More Control
- Differentiation
- Cost Control
- Competitive advantages
- Horizontal Integration at Kodak
The type of integration strategy adopted by the company in order to reinforce its position in the industry is the horizontal integration strategy. A Company that implements horizontal integration strategy has merged or acquires a new company that is in the same production stage. The purpose of this integration is growth in company size, increased product differentiation, economies of scale achieved, reduction in competition or accessibility of new markets.
The advantages of Horizontal Integration for Kodak could be:
- Increased market power
- Reduced Competition
- Lower costs
- Heightened differentiation
- New market accessibility
The corporate level strategy that Kodak should embrace shall be well analyzed as these decisions affect the whole organization. The corporate level strategy that is best suitable for Kodak comprises of Differentiation and change in the corporate culture of the Company.
Diversification in medical and commercial sectors and diversification in the digital imaging sector are the corporate strategies of Kodak, and it should still form the part of its overall business strategy.
The culture of the Company is outdated and needs reorganization. If the same old culture is continued, it could hamper the decline in its sales further whereas reorganization would give a fresh start to the Company’s activities.
This diversification strategy will help the company to achieve success in the cloud service industry. With the trend of digital photography, the film based photography is outdated. Diversification in the digital imaging is very important for the success. Gone are the days when people used to take selected photos using the camera films. Now, it is becoming a trend, fashion, and interest that people capture their memories in every minute. With the evolution of social media sites like Facebook and twitter, people want to share their picture with their friends and families. How can this be possible with the film based photography? Apart from this, people do not want to print their photos and keep it in photo albums rather they prefer storing it in digital form in a cloud server. With the modernization, people love to capture their every moment in the photos and share it with their friends and families instantly while they also store those photos in a cloud server. In this respect, Kodak must diversify from its analog film based photography to the digital photography to stay in the market and achieve success. For the digital photography, joint venture, outsourcing, and business process reengineering should be done to make the diversification strategy successful which will eventually make the company successful in the cloud service industry.
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- Quote paper
- Bharat Koirala (Author), 2016, The rise and fall of Eastman Kodak. Will it survive beyond 2012?, Munich, GRIN Verlag, https://www.grin.com/document/382951
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