Marketing Strategy of The Eastman Kodak Company - Coursework Example

You Press the button, we do the rest”. This was the promise that George Eastman made in 1888 with the creation of his Kodak camera. This came as a result of technological development in the form of rolled photography film. This film revolutionized the way cameras were used among the masses. Photography was simplified when the first Kodak camera entered the market. This easy to use, hand-held camera could take up to one hundred photos. Once the reel was exhausted, the camera would be returned to the Kodak company based in New York, where the reel within in would be developed, and the camera itself would be replenished with new reel and ready to be returned to the customer. In the early and mid nineties, Kodak grew as a company and started developing new and improved models of their cameras. They developed the ‘Kodacolor range’ which included motion picture films, camera and projectors. These were sold for affordable prices. They also provided cameras to the U.S. Government for aerial photography during the First World War They didn’t stop there. They then introduced the ‘Instamatic camera’ which revolutionized the way people used cameras. It became a household item for amateur photographers because of its versatility and affordability. The Eastman Kodak company operated through three segments: 1. The Digital & Film Imaging Segment This segment provides digital and traditional products such as film, photofinishing services and supplies, and digital cameras. 2. The Health Group. The Health Group provides medical films, digital medical products such as digital x-rays and relevant hardware supplies, along with medical film, chemicals etc 3. The Graphics Communications Segment This segment is more relevant today. It provides inkjet printers, high-speed production document scanners, digital imaging systems and products aimed at the commercial print market. Today, however, the iconic brand is on its knees. This is because of the digital age. Kodak was slow in adapting to new-age digital technology, unlike the predecessors who were drivers of technology in the industry with their wide array of innovative patents. Where did Kodak go wrong? Well there’s a couple of contributing factors. First off, Kodak used a high velocity revenue model which entailed making profits off complimentary products to their cameras, i.e. the reel used by the camera. Their strategy was typically to sell cameras at a low cost, and let the film reel fuel its growth and profits. This meant the business was heavily dependant on this particular rigid model. Kodak were to pay the price for this rigidity soon enough. This came in the form of competition from overseas. The Japanese firm Fuji Film came into America and caught Kodak napping. They introduced reel that was one-fifth cheaper than Kodak’s offering. The result was devastating for Kodak, and even then their lack of market agility was evident by their slow reaction to the market. Even with this immanent threat to their business, they stuck their heads into the earth and stuck to their age old model, showing absolutely dismal strategic planning. Further proof of the business’ inability to adapt to changing technology in the industry came in the early eighties, when Sony Corporation ushered in the digital age with the release of the ‘Mavica’, a filmless digital camera that displayed photos directly on the user’s television sets. Pictures could also be printed if desired. Kodak’s reaction was sluggish to this mortal threat to the century-old business. And even so, they believed in sticking to the silver-halide film that they had been using through the ages, only difference was that they planned to incorporate new technologies into it. This was an utterly ignorant take to the whole situation. Ultimately, after years and years of downfall, the company decided to shrink its film business and reinvest its resources into developing digital technologies for their cameras. SWOT Analysis: Strengths The strengths evident in this new age scenario included their mastery in film and chemicals. This means that they find hope in catering to companies like HP, Canon, Dell etc for meeting their printing needs for inkjet printers for starters. They could become leading suppliers to kiosks perhaps? Weaknesses Their lack of attention to the digital paradigm has cost them an arm and a leg in competitiveness in the market, setting them back greatly. They cannot compete on equal footing with the market leaders of today because of all the lost time. Now the question is, should they go for the digital band wagon and accept themselves as minnows, or stick to their core competencies and relegate themselves to suppliers of supplementary products rather than once market giants in photography? Opportunities They could utilize the shrinkage of their film division into reinvesting their cash flows towards major research and development in their digital segment. They could also position themselves as leading photo finishers and developers, because after all that’s said and done, photos still need to be printed don’t they? Even if users today use their own printers to get hard copies of their photos, the paper used for that is different. Kodak could grab a hold of that market. Threats Threats include an overwhelming shift in paradigm which would render Kodak’s core competencies completely obsolete. The digital market has a few market leaders, but a dozen or so competitors which makes competition the most challenging aspect of Kodak’s move into the digital front. Recommendation: Based on the SWOT analysis conducted subsequent to reviewing the conditions Kodak finds itself in, a strategic position and action matrix would assist in solidifying an informed recommendation. The defensive strategic posture comes as a result of low competitive advantage in a strong industry and low financial clout. This posture includes using their core competencies in film and chemical works as a secondary product to printers which are becoming increasing popular for home printing these days, and maintaining their dominance in photo finishing and printing services, while doing away with obsolete silver-halide camera equipment and the likes. A more offensive alternative would be going gung-ho into the digital camera market! But with low financial clout and competitive advantage, this would be like running into a brick wall with the kind of competition in the market today And of course they could divest from all business segments except the Health Group and establish a steady share over there. But that would not be progressive at all. Works Cited Keenan, Faith. "Kodaks Digital Dilemma ." 23 March 2003. Business Week. 02 May 2011 . Mendes, George. "What Went Wrong at Eastman Kodak?" A Stregic Analysis. n.d. Murat, James Kara. The History of Kodak, How it All Started and Evolved. 2 5 2011 . Utterback, James M. "Developing technologies- The Eastman Kodak story." February 1995. Mckinsey Quarterly. 2 May 2011 . Read More