Eastman kodak case study

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 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, 2012). Kodak, based on an innovative idea and product of that time, was a market
leader in the film based photography products. In 1975, the business invested and launched the
first digital camera. The business was the primary innovator of the digital technology with
approximately $2.6 billion worth patients. After touching the new heights of success, the
company filed a bankruptcy suit in 2012 (Lucas &Goh, 2013). The assignment aims to analyze
the Kodak's 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 digital imaging strategy during 1992-2012?
Kodak is one of the pioneers of the digital revolution, but was not bale to keep pace with
the fast changing customer’s needs. The competitors were following Kodak, but the market
dynamics were changing drastically. Kodak, then ventured a Niche strategy offering the product
for a selected market. The business uses this strategy to limit the threat of substitute Kodak was

the market leader in film-based photography which dominated the market for decades. The
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.
Kodak used razor-blade model where the products were offered at the lowest price. The business
was unable to sustain as the competitors such as Fuji soon imitated the cost leadership. The sales
volume determined the profit margin which was practiced by a majority of the opponent,
resulting in reducing customers and commoditizing of their profit. The client started perceiving
the product offered as the low quality which adversely affected the product and brand image
("Kodak Next", 2016).
Kodak is one of the pioneers of the digital revolution, but was not bale to keep pace with
the fast changing customer’s needs. The competitors were following Kodak, but the market
dynamics were changing drastically. Kodak, then ventured a Niche 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 the business could switch to new focused strategy. It needed competencies,
marketing, and technology ("Kodak Next", 2016).
The next strategic landmark was the development and implementation of the Digital
Strategy, which focused on the imaging industry ("Kodak Next", 2016). The strategy was based
on the following three themes:
1. An incremental approach based on building a presence by developing and offering services
and product according to technological changes and advancements. Kodak provided a hybrid
camera with a combination of traditional and digital photography.

2. Differentiation strategy was employed to offer different product and services to commercial
and customer markets. The product and services provided to various segments reflected price
differentials as well.
3. Kodak entered into partnerships and alliances to add competitive advantage. The
partnerships included leading hardware and software business to add competitive advantage.
Q2. Why did the strategy fail (be specific offering an in-depth analysis)
After the success of Sony Digital Camera, Kodak conducted a detailed market research
which revealed that the digital revolution cannot threaten the business shortly as it required
structural, technological, and market transformation. The market research proved accurate with
time, but Kodak failed to prepare for the future digital revolution. The business made the mistake
which its founder George Eastman avoided in the past when the past. He made a risky, but a
rewarding choice to switch to film and later by investing in the color film. Apparently, these two
options were risky, but it was essential to prepare the business for the future. This time, even
after accurately forecasting future trends, Kodak was unable to respond to future needs. The core
business competency of low-cost 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 acquisition. Kodak was extremely slow in embracing change. The perfect product
mentality resulted in the slow transition into digital photography, and innovation failure. The
business didn’t 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 the lucrative film business. Kodak played ignorant to the
fact that the new digital market was reshaping the whole industry ("Eastman Kodak Co.", 2016).

Q3. Was there a better alternative? (Be specific with them and identification of specific
strategies)
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. Kodak 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 George Eastman in the past (Lanzolla&
Anderson, 2010).
By using diversifying strategy, the business can escape the declining industry. The
growth should focus the stakeholder interest and not only the management. The business can,
also effectively reduce the variance in the profit flows (Kenny, 2009).
Q4. It is summer 2012, what advice you would give to the Kodak board about Kodak's next
steps (once again, you must offer specific strategies - by name - and justification on why
your proposed strategies are best).
It is important that Kodak should discontinue the unprofitable products and invest in
research and development of more innovative digital products which customer 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. Kodak should also move to the other

segments of the market such ass entertainment and movies to regain the lost market share.
Keeping the primary focus on the high potential product, Kodak should concentrate on the Niche
markets in the beginning. Therefore, the use diversification strategy and offer customer new and
innovative product, initially targeting Niche markets (Kenny, 2009).
Conclusion
Kodak, once a market leader, touched the sea bottom in 2012 because of its rigid
approach towards change and innovation. In the world of competitive world of business
dominated by technology, innovation, and globalization, the business success depends on the
company’s potential to identify changing market dynamics, competition, customer’s needs, and
future trends. Kodak was the pioneer of the digital revolution, but was not bale to keep pace with
the changing market. The competitors were following Kodak, but the market dynamics were
changing drastically. Now Kodak should diversification strategy and offer customer new and
innovative product, initially targeting Niche markets. At the same time, Kodak should aim to
attain and retain the economies of scale. A Higher level of diversification is not a guarantee of
higher performance and success will mainly will depend on market research, potential to identify
and respond to change.

References
Eastman Kodak Co..(2016). UPF. Retrieved 4 August 2016, from
http://www.econ.upf.edu/docs/case_studies/61en.pdf
Jackson, S. (2012). Five secrets to success in business strategy.Journal Of Business Strategy,
33(2). http://dx.doi.org/10.1108/jbs.2012.28833baa.003
Kenny, G. (2009). Diversification strategy. London: Kogan Page.
Kodak Next.(2016). Democrat and Chronicle. Retrieved 4 August 2016, from
http://media.democratandchronicle.com/kodaknext/pdf/KodakNext.pdf
Lanzolla, G. & Anderson, J. (2010). THE DIGITAL REVOLUTION IS OVER. LONG LIVE
THE DIGITAL REVOLUTION!.Business Strategy Review, 21(1), 74-77.
http://dx.doi.org/10.1111/j.1467-8616.2010.00650.x
Lucas, H. &Goh, J. (2013). Disruptive technology: how Kodak missed the digital photography
revolution. IEEE Engineering Management Review, 41(4), 81-93.
http://dx.doi.org/10.1109/emr.2013.6693939

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