Eastman Kodak Company, commonly known as Kodak is an American innovation organization that focuses on creating pictures. Kodak’s main segment is digital printing and graphics as well as commercials film. In the 20th century, it had a very competitive position in digital printing. The company has been operating for more than a century and has expanded its market from the US to all regions across the globe. The company was started by George Eastman.
Description of the company
The company was established in the year 1888 by George Eastman in the US. The company has managed to grow over the years and has been in the market for more than twelve decades. As at the end of 2014 to 2015 financial year, the company had total assets amounting to $2.556 billion and total equity of $227 million. The company has more than 6,500 employees spread across its branches in the US, Europe, Africa, and Asia. The Eastman Kodak Company is publicly traded and operates within the Digital Imaging Photography Mobile Devises industry. The Headquarters of the company is in New York and it currently occupies almost 20% of the global film market (Eastman Kodak Company par. 14).
The Eastman Kodak Company has diversified its business and has products such as digital imaging, digital services, digital equipment, and photographic materials. The primary business segments for Kodak products are Entertainment, Graphics, Digital Printing, and Enterprise. The product comes with applications such as commercial print, packaging, publishing, and direct mail. Besides, the product can support short-run printing, corporate documentation, and personalized printing packages. The company also has customized products such as flexo printing and functional printing. Besides, Kodak is credited for its high-end consumer inkjet cartridges that come in different shapes, colors, and usage.
Management, Marketing, and Main Marketing Problems
In the face of increasing competition and market saturation, the company is faced with the dilemma of the best strategies to adopt to sustain market dominance and increase market share. As a prerequisite for sustainable organization performance, the strategic issues that Kodak is currently facing pivot around the most appropriate market that the company should focus on or neglect in order to survive the competition. Therefore, what should management do to increase market share for Kodak against digital cameras? In order to respond to this question, the following sub-questions will be answered.
- Should the Eastman Kodak Company re-brand or introduce more brands to its current product line?
- What strategy will be necessary to properly differentiate the Eastman Kodak Company’s brand in the market to increase product acceptance?
The Eastman Kodak Company has a number of resources that have contributed to its success in the global market over the years. In order to ensure business sustainability, Kodak has concentrated the focused strategy through a clear definition and targeting of the specific market segment. Despite the success of these strategies, The Eastman Kodak Company is threatened by its competitors with a more or less similar approach in doing business within the same industry.
Therefore, there is a need to examine the factors that describe the preferences of consumers towards Kodak in order to create sustainable and effective marketing communication strategies in the short and long-term. In order to establish strategic answers to the marketing problem that is currently facing the company, the following sub-questions will be answered.
- What criteria do photographers use to evaluate professional cameras?
- What is the photographer’s evaluation of competing for professional cameras such as, HP, Fujifilm, and Sony on the factors of the choice criteria?
- What is the demographic and psychographic profile of photographers who prefers Kodak over other professional cameras?
Secondary Data Analysis
Macro Environment Analysis
The cultural setup and the population are a major key to social concerns. The Eastman Kodak Company is set against a social background with a population of dynamic social and cultural orientation. For instance, the US, Canadian, European, and Asian markets consist of highly stratified cultures that the company must satisfy in its lines of film and photography products (Eastman Kodak Company par. 15). The main advantage that the company relies on is that the targeted population has a big following and innovative photograph technology. In achieving this goal, its products have been customized to be culturally sensitive and be able to be used across the global environment.
The global market cycles have a great impact on business operations both in the present and the future. The economic boom, recession, and any kind of inflation cause the business to take drastic measures to withstand the challenges of existence. Predictions of these economic factors are very difficult to estimate since their studies vary a lot based on the school of thought. With continued economic stability in the primary markets, the Eastman Kodak Company poised to grow and expand even more as many investors are assured of safety in the event that they decide to put their money into the venture (Eastman Kodak Company par. 15).
Technological and Regulatory Systems
Technological macro-environmental factors are designed to affect business operatives in the global sphere. The type of machinery that a company opts to use in the production of its products and offer its services, the strategic measures it takes in the marketing process and its accessibility has a lot of impact on the market. Companies with innovative skills in their production lines and those using online marketing strategies are highly likely to have a higher number of customers (Cheverton 45). These technological advances have attracted more customers from diverse sports backgrounds due to the improved product orientation as evident in the success of the film product in the US and European markets. The company is accredited for use of latest technologies such as laser, chrome, and photogenic films.
The Eastman Kodak Company is based in New York and it operates within the confines of the State’s laws. The company operates within the business structural laws that govern the business operatives in the state of New York. Since the Eastman Kodak Company also operates in international markets such as Japan, UK, Germany, Canada, and France, it has to adhere to the other laws that govern companies that operative across the globe in order to facilitate smooth operations (Eastman Kodak Company par. 8). Since the Eastman Kodak Company is a registered local and international business with no record of unethical practices, the legal factors are not intense towards the operation of the business and have minimal impacts.
Micro Environment Analysis
The Digital Imaging Photography Mobile Devises industry has experienced steady growth as more customers embrace renowned brands such as Canon, Sony, Nikon, Samsung, and Fuji film among others. The global Digital Imaging Photography Mobile Devises industry has an estimated market value of over $700 billion. The US and Europe represent 30% of the market share. Despite the economic swing of 2007-2008 financial years, the players in this industry managed to recover and are currently experiencing an average growth of 20% annually.
At present, the Digital Imaging Photography Mobile Devises industry commands 3% of the total market value of the consumer purchases across the globe. The market share is anticipated to expand further to 15% by the year 2030. The Digital Imaging Photography Mobile Devises industry at present is controlled by Canon at 20%, Sony at 17%, Nikon at 14%, and Kodak at 8.5% ((Eastman Kodak Company par. 12). Based on the annual growth and market share, the incumbents are positioned to benefit in the future because the industry is highly attractive, especially in the emerging markets in Asia and Africa.
The Eastman Kodak Company faces very strong competition from established photographs and film companies in the global market such as Nikon, Canon, and Sony among others. Moreover, there are still more local companies entering the global market. Given in Table 1 below are some of the key competitors in the Eastman Kodak Company.
Table 1: The Eastman Kodak Company main competitors.
|Name||Establishment and Operations||Products Targets and Products||Competitive advantage|
|Nikon||Established in 1917 in Tokyo and currently operates globally||Deals in digital cameras and film |
Targets customers of all ages interested in the digital camera and related products
|Diverse products, affordable prices, a household name, and global operation|
|Sony||Established in Japan in 1946 and operates in the global market.||Deals in digital devises accessories |
Targets customers of all ages interested in digital cameras and other accessories
|Specialized and diverse digital camera products that are affordable and associated with quality|
|Canon||Founded in 1937 in Japan and has global market coverage||Capitalizes on optical and imaging products such as cameras, photocopies, and medical equipment||Diverse designs and ability to offer a series of products to different groups of potential customers|
The market share of the above competitors against the Eastman Kodak Company is summarized in the table below.
|Name||Market share||Main markets|
|Sony||The company has a market share of 17% across the globe||Asia, the US, and Europe|
|Canon||The company has a market share of 20% across the globe||Asia, the US, and Europe|
|Nikon||The company has a market share of 14% across the globe||Asia and Europe|
|Others||Shares 49% of the global market|
The Eastman Kodak Company is focused on supplying its consumers with premium products that suit their needs and experiences. As a global company, the Eastman Kodak Company management considers standardized and system supported supply and production process as success factors. A minority of the company’s full line products are supplied by independent and commissioned producers while the majority are produced by the company’s own factories (Eastman Kodak Company par. 8). As opposed to its competitors which produce their products from central points, the strategy to spread production points around the world consolidates its supply networks and strengthens its long-term partnerships. Moreover, the spread of the sourcing volume across the global network of suppliers spreads risks and makes the company independent of any single-sourcing location and manufacturer.
The Eastman Kodak Company also enjoys a wide network with over 45 countries and subsidiaries in the US and several representative offices in different regions outside the US. This is important in attracting more customers in those regions where the company is yet to reach full potential. Besides, the numerous branches have improved the visibility and accessibility of its products (Eastman Kodak Company par. 11). The strong brand image that has been enhanced by the recent redesign of the company logo and extensive image campaigns has worked for the company.
The Eastman Kodak Company has more presence in the US and Europe than other parts of the globe. Specifically, unlike its main competitors, the Eastman Kodak Company has few branches outside the US and Europe markets. The Eastman Kodak Company has high inventory costs since it has many stores across the globe. Managing these stores may not be sustainable in the long-run if the annual turnover reduces. As a result of these weaknesses, the Eastman Kodak Company has not been able to efficiently penetrate the small business segment in the US within its Business-to-Business model of operation. The Eastman Kodak Company’s focus on quality products has compromised its ability to incorporate views of a section of its consumers. A section of the potential consumers feels that the company should produce reasonably priced and quality products for the low-end market (Eastman Kodak Company par. 8).
The Eastman Kodak Company has an opportunity to expand its opportunity to cater for the expanded digital market since its asset base is strong enough to sustain this market by focusing more on action cameras. Therefore, by increasing its focus on an action camera, it would be easy to offer customized services to customers. As a result, the Eastman Kodak Company will be in a position to double its current revenues and increase the customer base.
The company’s global presence and strong performance in most regions demonstrate that it can be successful in nearly all countries of the world if the company invests more in the packaging and printing markets. The current market outlook for packaging and printing is positive in the next decade and beyond. It is on this ground that the Eastman Kodak Company should plan entry into the regions where its presence is not yet felt, especially to trade printing and packaging products. Therefore, working in collaboration with subsidiary companies will enable ease of entry into new markets (Cheverton 42).
The constant change in technology is another major threat facing the Eastman Kodak Company. The fast development of hardware and digital technology induces the prosperity of the Smartphone market. Based on the analysis of the year of 2015, the Smartphone has already dominated the camera and film market. Therefore, some of the traditional camera and film manufacturers such as Kodak experience a hard time in maintaining a competitive advantage. As a result of poor market prediction and the less competitive technology platform as compared to IOS and Android, the traditional manufacturers such as Kodak are gradually becoming obsolete (Rhim and Lee 168).
The result of the SWOT analysis for the Eastman Kodak Company is summarized in the table below.
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Political: Governmental regulation, taxes, and trade barriers
The company operates in many markets with different government regulations and tax regimes. In order to smoothly operate in these markets, the Eastman Kodak Company operates a business model that is tax complaints in all the regions it operates in. Besides, the business functions on the pillar of ethical business practices that are aligned with the local regulations. In order to minimize trade barriers, the company has utilized its global coverage to negotiate for a fair business environment with different economies (Weinstein 45).
Economic: A decrease in the price of digital cameras
The current pricing wars in the digital camera have put the Eastman Kodak Company in a defensive position. At present, there are many companies across the globe that retails digital cameras from as low as $50. These companies have gained from economies of scale due to high sales volume, especially in Africa and Asian markets. However, in order to survive this pricing onslaught, the Eastman Kodak Company has integrated the aspect of quality, large discounts, and the ability to customize the digital cameras as the primary selling points. Besides, the Eastman Kodak Company has created digital cameras that appeal to different customer classes on the basis of premium pricing, standard pricing, and economy pricing (Cheverton 23).
Socio-cultural: Cultural trends where buyers now prefer high-tech devices
The global Digital Imaging Photography Mobile Devises industry has been steadily shifting from simple to high-tech devices as customer knowledge and usability of technology become the determinants of product competitiveness. At present, there are many companies, both primary and secondary competitors of the Eastman Kodak Company, that offer high-tech devices demanded by customers. In order to stay competitive and fulfill the demands of these customers, the Eastman Kodak Company has embarked on an ambitious overhaul in the production line to incorporate the latest high-tech devices in its digital cameras, films, and packaging products (Weinstein 34).
Technological: Innovation and advancement such as smartphones
The growth in the global Digital Imaging Photography Mobile Devises industry has been spurred by innovation and advancements such as smartphones that are threatening traditional cameras and films retailed by the Eastman Kodak Company. For instance, high-tech mobile giants such as Samsung and Apple have created smartphones that can perform the same functions as the Kodak cameras. In order to sustain competitive advantage in the digital camera market, the Eastman Kodak Company has differentiated its products for their high quality, ability to be customized and low prices tag as compared to the smartphones within this product category. However, the company needs to come up with a new strategy for long-term survival through innovative technological research and application (Cheverton 43).
Environmental: Reducing emissions and wastes
Environmental issues are some of the factors that the Eastman Kodak Company has been forced to deal with within the market. The environmental bodies have accused the company and many other electronic firms of massive environmental pollution. As a strategy to guarantee business sustainability and respond to the above concerns, all aspects of the firm such as sales, purchases, marketing, management, and operations at the Eastman Kodak Company have been aligned to appropriate and sustainable technology to suit the global standards on reducing emissions and wastes (Rhim and Lee 168).
Legal: Patent and copyright infringement
The Eastman Kodak Company has patent all its products and has never been embroiled in any major legal suit for ant copyright infringement as the accused. The company has successfully won a legal suit against Sony for copyright infringement of the laser film product (Rhim and Lee 166). At present, the company has strengthened its patent and copyright of its products to protect itself from unethical players in the global Digital Imaging Photography Mobile Devises industry.
Since the proposed research study is focused, dynamic, and subjective, the researcher opted for qualitative analysis since it is flexible to accommodate different tools of data analysis, within different margins of error. The research will be carried through a primary survey targeting 78 respondents through filling questionnaires. The respondents consist of potential customers of the products traded by the Kodak Company. The sample space consists of male and female adults. The questionnaires will be subjected to transcription to identify relevant responses from each respondent in order to identify converging and diverging responses for special treatment.
The respondents will be chosen randomly within the department. The rationale for targeting this category of the respondent was informed by the need to collect information from potential customers of the Kodak Company. The sample space of 78 respondents is adequate to study the subject topic as representing the actual situation. In picking the respondents, the researcher will adopt the random snowballing strategy to ensure that all dynamics in this group such as gender and age are reviewed.
Cost leadership strategy is vital in business management, especially in an industry with stiff competition, such as the Eastman Kodak Company. The company may penetrate the African and Asian markets further through the introduction of customized digital cameras that use the latest technology but relatively affordable. The objective of this strategy is to adopt the market leadership strategy to improve Eastman Kodak Company’s product quality and appearance to compete with Nikon, Canon, and other companies. The above objective is achievable through the creation of different high-quality products and distinctive brands by embracing the latest technology to suit the demand of the modern customer (Kotler and Keller 24). The key performance indicator for this strategy is the ability to create a new product, thus an increased number of customer ratings by 3% after the first year of implementation.
An improved approach to product management through diversification will improve the visibility of the Eastman Kodak Company brands. The buyer will make an effort to learn the Eastman Kodak Company’s values, vision, challenges, and operating environment. A spirit of collaboration established will offer a positive contribution to the partnering businesses when different products are launched. Such cooperation will turn new brands into a competitive advantage instead of a cost for the Eastman Kodak Company.
The objective is to improve the current product brands into an efficient product that is diversified (Bowden 69). Towards implementing marketing function, the product diversification strategy should constantly employ elements of the marketing mix to appropriate plans on how to achieve popularity in the market place. These strategies are aimed at promoting positive consumer behavior by introducing more brands. The key performance indicator for this strategy would be increased sales by 3% as a result of improved product brands.
Research limitations and conclusion
The research methodology can be improved by increasing the sample to more than 100 to improve on accuracy in representing the position of the entire population. Besides, there is a need to carry out a pilot study to minimize the degree of bias that might exist in the findings.
The Eastman Kodak Company has been in the market for more than a century. The company has managed to survive competition through product differentiation, strong brand, global coverage, and innovative approach. However, the company is facing stiff competition as technology advances each day. From the primary survey, it is apparent that the respondents are aware of Kodak’s products but they want efficient products that use the latest technology and very affordable. The Eastman Kodak Company can achieve this through technology innovation in product development and concentric diversification. These recommendations will enable the company to survive the competition and expand its revenues through increased market share.
Bowden, John. “The Process of Customer Engagement: A Conceptual Framework.” Journal of Marketing Theory & Practice, 17.1 (2009): 63-74. Print.
Cheverton, Philip. Key marketing skills: Strategies, tools, and techniques for marketing success, London, UK: Kogan Page, 2009. Print.
Eastman Kodak Company. Product Innovation. 2016. Web.
Kotler, Philip, and Kevin Keller. Marketing Management, New Jersey, NJ: Pearson Prentice Hall, 2012. Print.
Weinstein, Art. Handbook of Market Segmentation: Strategic Targeting for Business and Technology Firms, New York: Routledge, 2013. Print.
Rhim, Hosus, and Chan Lee. “Assessing Potential Threats to Incumbent Brands: New Product Positioning Under Price Competition in a Multi Segmented Markets.” International Journal of Research in Marketing, 22.1 (2009): 159-182. Print.