Kodak Company Position in the Digital Revolution

The current performance of Eastman Kodak

Kodak declared its bankruptcy in 2012 and since that time, this company sold many of its divisions to other enterprises. Moreover, they had to transfer some of their patents because in this way, they tried to repay their debts. Currently, this organization passes through a period of dramatic change. At present, Kodak delivers services and goods mostly to commercial customers (Lilien & Grewal, 2012, p. 223). So, it can be described as a B2B company (Lilien & Grewal, 2012, p. 223).

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The products of the company are related to such areas as digital printing, TV production, or flexography. One can say that this enterprise provides its clients with advanced technologies that can give these businesses a competitive advantage over others. So, current activities of Kodak are not oriented to the needs of consumer markets. These are some of the main aspects that should be considered.

In 2013, the net income of this corporation was $1,99 billion dollar while its net losses were $155 million. Apart from that, this organization successfully implements the policy of cost reduction, and this task is critical for the sustainability of this organization. For instance, this business was able to cut its administrative costs from $148 million to $ 93 million (Kodak, 2013). This example is important for showing that the management of this corporation has become more efficient.

The company has been also involved in a number of scandals and law suits. For instance, in 2004, a number of former employees of Kodak sued the company charging it with “continued systematic discrimination against African Americans” (Marable, 2006, p. 11). Apart from such accusations, some employees have sued the company charging it with numerous violations of their rights. Admittedly, these legal issues have also contributed to the company’s decline.

Thus, it is important to remember that the company has to spend capital on its restructuring after bankruptcy. Overall, the main priority for the management of Kodak is to retain and attract clients. Moreover, this enterprise is vulnerable to the fluctuations in demand. Furthermore, the bankruptcy made many people unwilling to support this enterprise. Finally, the company has to develop human resources management strategies. Recent staff reduction has also caused changes in the company which have to be taken into account. The staff should be motivated to achieve goals set. The old management strategies have become outdated. These are some of the factors that hinder the performance of Kodak.

The closest competitors of Kodak

There are several important competitors that can create significant challenges for Kodak. For instance, one can mention Canon that manufactures computer printers and photocopiers that can be used by commercial clients (Hill & Jones, 2008, p. 497). So, this corporation can erode the market share of Kodak. For instance, Canon produces wide format printers that are purchased primarily by organizations, rather than individuals (Hill & Jones, 2008, p. 497). Additionally, one can speak about scanners because such products are often purchased by enterprises.

These products are usually less expensive that the technological solutions developed Kodak. The main difference is that Kodak is much more focused on the needs of corporate clients; therefore, it can better meet the needs of these enterprises. As a rule, these organizations want to use technologies that can improve their operational and financial performance. However, Canon has financial resources in order to win a price competition (Hill & Jones, 2008, p. 497). This is one of the details that should be taken into account by senior executives since it is important for developing the most effective policies.

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Moreover, much attention should be paid to Fujifilm. This corporation provides such products as photofinishing equipment, photocopiers, color paper, and other technological solutions that can be used by businesses. Fujifilm is one of the businesses that contributed to the decline of Kodak. It is necessary to note that Fujifilm took over Kodak in1980s. At that time, consumers saw the two companies as providers of products of the same quality class (Mizrahi, 2011). Moreover, Fujifilm won the race for sponsorship of the Olympic Games in 1984. This had a considerable negative impact on the development of Kodak (Mizrahi, 2011).

Success of Fujifilm can be, in part, explained by Kodak officials’ inability to properly estimate the threats as Kodak top managers did not really believe Fujifilm can gain popularity especially in the US market (Gavetti, Henderson & Giorgi, 2005). Mizrahi (2011) also notes that Kodak lost the race for digitalization as Fujifilm started moving in that direction earlier. Kodak officials were reluctant to diversify their production as they wanted to focus on “old-style film” as it was their dominating product (Lynch, 2009, 132). This inability to be flexible also contributed to the decline of the company.

Admittedly, the management of Kodak should be aware of the threats that his competitors can pose. However, Fujifilm does not position itself a B2B company at present. Unlike Kodak, it does not try to develop some sophisticated products that are oriented toward the activities of businesses. This is one of the distinctions that should be considered by the senior management of Kodak. Therefore, one should not suppose that Kodak is not able to operate in the markets dominated by corporations like Fuji.

Finally, it is important to remember about Hewlett-Packard. This corporation manufactures a wide range of inkjets and laser printers that can be used by businesses, especially those one that work with a great number of documents. Moreover, one should pay attention to such a product as Officejet. These technological solutions can print, scan, and fax documents (Price, 2004, p. 112). Furthermore, one should mention that there are other corporations that sell similar products. These technologies can be purchased by a wide range of businesses. This is one of the details that should be considered.

This discussion shows that Kodak should be aware of the strategies adopted by their competitors. These organizations occupy a prominent place in mass consumer markets, while Kodak is able to consider the needs of these businesses and their competitive environment. Moreover, Kodak is a company that attaches importance to R&D, and it is famous for its innovative products. Certainly, this organization cannot win a price competition, but it can retain its competitive positions by offering breakthrough products to clients. For instance, it is necessary to keep in mind recent innovations and products (as well as services) provided to customers in such areas as photography, digital photography, medical imaging, etc.

However, Kodak can remain sustainable in this competitive environment if it remains cost-efficient. Secondly, they need to develop an effective marketing campaign. This is the main tasks that should be the top priority for the senior executives. It should be kept in mind that the absence of clear marketing strategies is one of the reasons why this business failed in the past (Lynch, 2009, p. 133). Despite financial difficulties faced by Kodak, this organization can survive in this competitive environment.

Strategic vision

These questions discussed in the previous sections can be used for developing a strategic vision of Kodak. In particular, this organization should try to become a leading manufacturer of digital printing technologies which are designed primarily for commercial clients. As has been mentioned above, this niche has not been occupied by the company’s competitors and there are numerous opportunities for Kodak to use. One of the major reasons why Kodak should focus on commercial clients is the company’s pricing policy.

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Admittedly, the company’s products are not attractive for consumers due to high prices. It is also necessary to note that the prices can hardly be reduced as the quality of products and services is likely to decrease. At the same time, the quality of products and services provided is well acknowledged. Kodak is famous for its high quality. Therefore, commercial clients will be able to pay higher prices for better quality. Clearly, Kodak should include this aspect into its advertising campaign.

It is also necessary to remember that Kodak is one of the most renowned brands in the world. The company should incorporate its long history in its new strategy and its advertising campaigns. The company’s new vision should be based on the principles and values articulated by its creator. Obviously, the world has changed dramatically since the end of the nineteenth century. However, it is possible to trace major similarities. Thus, people of the twenty-first century value innovation and development. However, they also appreciate traditions.

It is also possible to employ the idea of being American and the essence of the American dream. Admittedly, the American dream has transformed into a brand-new idea. Thus, it is possible to incorporate the idea of diversity, tolerance, creativity into the company’s vision. Kodak should create an image of a company that has a long history and cherishes universal values. However, this company is also constituted by creative people who have different backgrounds but committed to make a difference.

Moreover, this company should become the main innovator that can successfully market its products. Again, the company has been famous for its R&D successful strategy. More so, Kodak has always been associated with innovation and development of new trends in the field. However, Kodak should develop a new strategy to maintain the image of an innovative company. Thus, the failure to understand the potential of digital technologies led to the company’s decline. This can be a good lesson to learn. The company should diversify production and should develop innovations in different fields. It can be beneficial to continue developing new products for medical filming as medicine is rapidly developing now. This is one of the most profitable businesses nowadays.

Apart from this, the company should focus on human resources management. As has been mentioned above, it was able to reduce its expenditure though it meant considerable staff reduction. Thus, fewer employees have to address old issues and be able to find solution for new ones. More so, numerous law suits show inefficiency of the company’s human resources management. It can be effective to reconsider the company’s culture and vision. It is necessary to invest in the employees’ training and development. The company should make employees motivated and committed. These are the main objectives that Kodak should achieve in the future. If they can cope with this task, they can eventually overcome their financial difficulties and become profitable. This is one of the points that can be made.

Certainly, there are some possible alternatives to this strategic vision. For example, this business may try to enter mass consumer markets. However, this goal can be attained only if Kodak offers products at a low cost. Moreover, this strategy will not enable Kodak to distinguish itself among its competitors such as Canon or Fujifilm. So, in the long term, it can be ruinous. This is one of the main arguments that can be put forward. Additionally, at present, this business cannot introduce new products very often. Nevertheless, this business should achieve cost-efficiency by reducing operational costs. On the whole, this enterprise should avoid the pitfalls that contributed to its downfall in the past. For example, the lack of well-developed marketing strategies is one of such flaws.

At present, Kodak undergoes dramatic changes in order to respond to financial difficulties. The proposed strategic vision is based on the main strengths of this corporation. Besides, the new strategy also corresponds to the new trends which are apparent in the contemporary society. Moreover, this vision can enable Kodak avoid mistakes that they made in the past. The new vision will make the company competitive within a short period of time. More so, it can make the company a leader in the world of innovation, in the long run.

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Reference List

Gavetti, G., Henderson, R., & Giorgi, S. (2005). Kodak and the digital revolution (A). Harvard Business School, Web.

Hill, C., & Jones, G. (2008). Strategic management: An integrated approach. New York, NY: Cengage Learning.

Kodak. (2013). Kodak shows continuing improvement in third quarter results. Web.

Lilien, G., & Grewal, R. (2012). Handbook on business to business marketing. New York, NY: Edward Elgar Publishing.

Lynch, G. (2009). Single point of failure: The 10 essential laws of supply chain risk management. New York, NY: John Wiley and Sons.

Marable, M. (2006). Living black history: How reimagining theAfrican-American past can remake America’s racial future. New York, NY: Basic Books.

Mizrahi, C.S. (2011). Getting started in value investing. Hoboken, NJ: John Wiley and Sons.

Price, C. (2004). Use business technology. New York, NY: Max Johnson.

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