Kodak's 2004 strategy under CEO Daniel Carp had four pillars: 1) Slowly exiting the traditional film business, 2) Leading in distributed digital output like printing, 3) Growing the digital camera business, and 4) Expanding digital imaging services. However, this strategy failed because Kodak's core competencies in film became rigidities as the market shifted digital, they lacked market research, and were late entrants to digital photography. Under new CEO Antonio Perez, Kodak's current strategy focuses on outsourcing manufacturing, investing heavily in digital technologies, building a printer ink business, aggressive patent litigation, and brand licensing.

1. Case Presentation
Kodak’s Strategy
1

2. Group 4
Name ID
Md. Asif-Al-Noor 10364040
Monira Mahsharan 10264014
Marshal Richard 10364057
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3. Agenda
• Company Overview
• Product line
• External Factors Analysis
– Porter’s 5 Forces Model
– Industry Driving Forces
– Key Success Factors
– Strategic Group Mapping
• Internal Factors Analysis
– Core Competences
– SWOT Analysis
– Value Chain
• Kodak Strategy
– Based on Case
– Why Kodak’s 4-year Strategy failed
– Reasons for Failure
– Based on Current Situation
• Recommendations
• Conclusion
3

4. Company Overview
4

5. Company Overview…. Cont…
1879: George Eastman invented the dry-plate process
and filed patent for a machine that coated dry
photographic plates
1880: George Eastman established the Eastman Dry
Plate Company, at Rochester N.Y.
1884: Introduced paper roll film
1889: Invented perforated celluloid film
1900: The Brownie box camera went on the market
with a price of $1
1935: Introduced color film
1960: Brought the Instamatic camera to the market
1970: Major sales growth for Kodak. Concentrates on
film and basic cameras
5

6. Company Overview….
Cont…
1980: Fuji emerges as a serious competitor
1994: Kodak abandoned its non-imaging health-related
businesses began to invest in digital imaging
products for medical practice
1997: Kodak was a high-cost manufacturer with a
growing portfolio of digital products which was
losing hundreds of millions of dollars annually
1997: Restructuring that eliminated 19,000 jobs and cut
more than $1 billion from annual costs
1999: Kodak entered the digital radiography market
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7. Company Overview….
Cont…
2001: Kodak is pushing aggressively into China, an
important growth market
2003: Carp unveiled the plan to invest $3 billion in the
next three years in digital products by cutting
dividends by 72% - to 50 cents per share
2004: Kodak announced that it would stop selling
traditional film cameras in Europe and North
America, and cut up to 15,000 jobs
January 2005: The Kodak EasyShare-One Digital
Camera, the world’s first Wi-Fi consumer digital
camera capable of sending pictures by email, was
unveiled
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8. Company Overview….
Cont…
December 2010: Standard & Poor's removed
Kodak from its S&P 500 index
January 19, 2012: Kodak filed for Chapter 11
Bankruptcy Protection The company's stock was
delisted from NYSE and moved to OTC exchange.
Following the news it ended the day trading down
35% at $0.36 a share
February 9, 2012: Kodak announces it will exit the
digital image capture business
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9. Brand Logo Evolution
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10. Kodak Product
• Four distinct sub-product
– Digital cameras
– Home printing
– Online services
– Retail kiosks and mini-labs
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11. External Factors Analysis
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12. Porter’s 5 Forces Model
Question: How competitive
forces affect industry
attractiveness
To aid firms in analyzing competitive
forces in an industry environment.
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13. Porter’s 5 Forces: Digital
Camera
High
Numbers of digital
Technology,technolo
Threat of
Threat of New Numbers of digital
Competition, know
cameras ,trend of
how, economies of
gy driven,
digital market New
Entrants cameras ,trend of
scales, and high digital market
suppliers numbers
move fast,
investmentChina Entrants suppliers
worldwide,
of players, lower price worldwide, China
base
strategy.
o base
Bargaining Rivalry Among Bargaining
Power of Competing Firms in Power of
Suppliers Industry Buyers
--
- -
-
Few
substitutions, i.e. Threat of
Mobile Substitute
phone, Camcorder, Products o - --
Traditional
Low Moderate High 13
cameras

14. Porter’s 5 Force in terms of
photographic industry
Buyers bargaining power
• Have more choice
• Switching cost low
Strong bargaining power
Suppliers Bargaining Power is
• Out side the country from global market
moderate to weak
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15. Porter’s 5 Forces…
Cont..
Potential New Entrants
• Huge capital & specialized
• Not relay on any company
Strong entry barriers
Substitutes Products
Low switching cost
Low price of substitutes
High bargaining power
Strong threats
15

16. Porter’s 5 Forces…
Cont..
Rivalry among Competitor
• Intense competition among the rivals
Strong Competition
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17. Industry Analysis through 5-forces:
Answer Question 1
Strong entry barriers
Buyer in strong position
Moderate to weak position of
Supplier
Huge threat from substitute
Strong rivals
Apparently
Unattractive
Industry
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18. Industry Driving Forces: Answer
Question No2
• Rapid decline in demand for traditional
photography equipment in developed
economies
• Rapid growth in demand for digital cameras
in developed economies
• Steady decline in demand for film and photo
processing
• Development of new imaging technology
such as photo-enabled wireless telephones
and high-megapixel digital cameras
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19. Key Success Factors
• Technological capabilities
• Rapid design-to-market cycle times
• Reputation for producing high-quality consumer
electronics
• Reputation for producing high-quality optical
devices (cameras, binoculars, microscopes, medical
equipment)
• Distribution network that includes large electronics
chains and local camera retailers
• Involvement in multiple segments of the industry
value chain—camera production and sales, printing
supplies, professional photo processing
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20. Strategic Group mapping
Firm % Market Share Average Price
Canon 40% $220.00
Sony 15% $300.00
Samsung 10% $260.00
Nikon 10% $250.00
High Price Leica Sony
P Samsung
r
i Olympus Nikon
c
e
Kodak Cannon
Low Price
Low Market High Market
Share Share
Market share
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21. Internal Factors Analysis
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22. Kodak in terms of core competences
Not Core
Competence
Not s
valuable
Not able
to get
Not Rare competitiv
e
advantage
Not costly
to imitate
Not Non
substitutabl
e
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23. SWOT Analysis
Strength Weakness
• Existing Brand equity Rapidly decreasing sales
•Distribution Presence
revenue
•Competitive capabilities
•EBITDA are very low
• Market advantage
•Acquire many strategically •Work force has been cut
aligned companies off
• Corporate Culture
Opportunity Threat
• Digital Image •Competition in traditional
• New alliances • Demise of silver halide
•On line photo sharing and technology
storage •Photo capable mobile phone
•Price sensitive
•Economic health & terrorism
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24. Value chain pre digital age
Storage
Image Capture Processing
Printing
- Film Camera - Retailer
- Video Camera Processing
- All Retail Stores
- Reprints
Projection
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25. Value Chain post digital age
Retrieval
Image
Digitalization Storage
Capture
Transmission
-Digital Camera -Digital Cameras Software -Hard Disk
- Video Camera -Scanner at home -Floppy Disk/CD
-Online (email)
-Digital mini-labs -Removable
Storage Printing
- Kiosks at retailers
-Online Services
Manipulation
Projection
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26. Kodak Strategy based on
case
In 2003, CEO Daniel carp revealed 4
pillars Strategy:
1. Managing the traditional film business
2. Leading in distributed output
3. Growing the digital capture business;
and
4. Expanding digital imaging services
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27. Kodak Strategy….Cont..
1. Managing the Traditional Film
Business:
• Slow exit strategy from film business
• Looking forward to digital technology
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28. Kodak Strategy….Cont..
2. Leading The Distributed
Output
• Now a day digital photography much easer to
view & share photo(i.e. integrated display on
camera & sharing through electronic mail or
kiosks etc.) and its affecting the photography
industries.
• Then Kodak is able to bring fewer profit
through digital technology (i.e. digital print)
instead of traditional printing.
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29. Kodak Strategy….Cont..
3. Growing the digital capture business
• Profit much lower in digital photography than
traditional photography
• Success in this part of the business is
dramatically opposed to the traditional
photography business .
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30. Kodak Strategy….Cont..
4.Expanding digital imaging service
• Strategy take place by expanding product &
services. For example Kiosks that could print
image directly from mobile phone.
• In case of expanding service/online service
Kodak acquiring companies like Ofodo to
boost Kodak Easy Share Gallery.
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31. Low Cost Provider Strategy
• Introduced cheapest Inkjet printers Cost
$150-$300;Almost 50% less then
competitor, i.e. HP, Epson, Lexmark.
• Ink Cartridges sold $9.99 Black & $14.99
color. Competitor avg. price $ 30.
• Encourage more people to print at home.
Photo value pack will allows to print at
home for 10 cent, 60% cheaper then HP
system
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32. Reason For Failure
1.Core competency became core
rigidities
2.Lack of market research
3.Late mover of digital photography
4. Innovation and transformation Failure
5.Unwillingness to change
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33. Current Strategy
Current CEO Antonio Perez adopt new
strategy, such as_
1. Outsourcing Manufacturing
2. Huge invest in digital technology;
3. Spent hundreds of millions of dollars to build up a
high-margin printer ink business to replace
shriveling film sales
4. Aggressive patent litigation in order to generate
revenue;
5. Expand current brand licensing program
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34. Recommendation
• Discontinue unprofitable products
• Change middle to high-level management
• Launch new and innovative product
• Move to another business segment such as
movie and entertainment
• Focus on high potential products
– Kiosks and mini-lab
– Online services such as photo printing and sharing
• Emphasize on niche market i.e. medical market
and professional
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35. Conclusion
• Great example of strategic failure.
• Different models and theoretical concepts were
applied to identify key factors that have led the
company from where it was to where it stands
today.
• Lessons we can learn:
• External environment can be deceiving
• Change happens
• Greatest strength can be weakness
• Innovation is not the perfect solution
• Its not all over till its over
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36. Thank you
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37. Any Question
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