Recording a history of the provision of photos and graphics, the Kodak companies is one of the pioneers of the photography industry. Their current bankruptcy case displays the brutality of the global market in terms of the long term sustainability. It is difficult to predict the performance of any company owing to the unpredictability of the market. One of the ways that is however being considered is the observation of the trends and their impact on the organizational strategy of a firm or an industry. The observation of trends is an essential aspect in the management of any business. Trends can be analyzed in terms of economic, social and political aspects (Katz, 2010).
A look at the concept of the global market showcases a shift of various policies, systems of governmental and social forces. One of the trends that continue to define the global market is the globalization. Globalization is the interaction between different economies and communities as a result of factors such as trade, technology, communication and immigration. Globalization changes the dynamics in which all companies perform. A study on the effect of technology on the market reflects on the performance on the Kodak situation. Globalization ensures that all economies are up to date with the latest inventions and innovations. The introduction of the cell phone in particular affected the sale and production of the companys products.
The sensitivity to the economy of the economy is another issue that determines the performance of a company in the future. The demands and preferences of the market influences the production of the goods supplied.
The present society demands for efficient products that reflect on their fast paced life. The sale of the Iphone, Blackberry, Ipads and Galaxy tabs are the latest technology fads to hit the market. All these products displayed superiority to the Kodak products which could not compete in the end. Adapting to the current trends is ideal for the viability of any company. The inability of the Kodak Company to cope with the production of the latest products that competes with their merchandise made it vulnerable to the competitive market (Grant, 2010).
Cultural diversity is vital for determining the organizational strategy in the global market. The variety of cultures has different preferences and regulations that should all be followed by companies. The Kodak Company failed to meet the demands of the various cultures in the market. Most of the products were geared towards the western market forgetting countries in different parts of the globe. This in turn, impacted greatly on their public image making them loose a large percentage of their customers (Grant, 2010).
Trends in society, technology reflects on the products purchased by customers. The companys products were not appealing to the modern society that demands multipurpose functions in their products. The change in the economy also reflects on the purchasing power of the market. The 2008 recession saw the demise of a number of companies that are yet to recover to date. Environmentalism concentrates on the treatment of the environment by the companies and economists. Companies that are not going green face a high chance of losing their position in the market. These factors are likely to create dramatic turns in the companys future companies study how to identify opportunities in the market (Katz, 2010).
Future trends continue to control the activities of the current market environment. Most companies have to keep up with the changing forces by changing their strategies. The case of Kodak Pioneer films is one of the examples of a causality of the changing global economy. It is thus ideal to learn for the occurrence so as to prevent the fall of another historical company.
References
Grant, R.M. (2010). Contemporary strategy analysis (7th ed.). West Sussex, UK: John Wiley & Sons.
Katz, J. S. (2010). Competing for global dominance: Survival in a changing world. Silicon Valley, California: Happy About.
The founder of Eastman Kodak is sometimes called a technical genius, but that is not entirely true. His undoubted virtue was his talent as a manager, who could see the future, believe in his product, and promote it. George Eastman did the main thing that all businessmen who think big strive for he brought his product closer to the consumer, made it inexpensive and accessible, easy to use, and attractive. Nevertheless, despite the genius of the initial idea, the company failed in 2012 due to managerial mistakes.
Kodaks failure is primarily due to a failure to identify new areas of business. Companies often see disruptive trends affecting their business and attract enough resources to participate in emerging markets (Bolo, 2017). Their failure tends to be an inability to embrace new business models truly. Kodak created the digital camera, invested in the technology, and even realized that photos would be available online. However, it failed to understand that sharing photos online was a new business, not just a way to expand the printing business.
Another management mistake was the high self-confidence of the management. Having taken a firm place in its niche, the organization stopped evaluating itself critically. Kodak was no longer coping with the digital revolution when Fuji started to do better with the old technology, the film business. Finally, Kodaks lack of strategic creativity led to a misinterpretation of the same field and type of industry in which it operated, which was subsequently destroyed by the fundamental shift toward the digital era.
Strategic problems were solved by tough means, and because mistakes in the production process were costly and high profitability, Kodak avoided risky decisions and instead developed procedures and policies to maintain the status quo. In analyzing Kodaks experience, several pieces of advice could be given to its management. Approaches to strategy, business models, and innovation management should be constantly reviewed. Moreover, one should be prepared to move from protecting the companys competitive advantages to radical and revolutionary changes. Besides, it is important to adopt flexibility as an organizational development strategy.
Reference
Bolo, B. (2017). Kodak Black: Flying High to Success, Weird and Interesting Facts on Dieuson Octave! CreateSpace Independent Publishing Platform.
The main reason for the failure of the Kodak strategy is the erroneous desire to maintain the existing business model in a rapidly changing market. The analysis led the company to have the necessary time to form the consumer preferences it needs. The main reason for the failure is that Kodak sought to continue selling cameras, as the film brought a significant share of profits for the company (Grant, 2015). Consequently, the transition to innovative solutions in the field of digital photography was not taken seriously by the company. In this case, it can also be noted that the problem lies in the dilemma of innovation. The company failed to properly assess the opportunities and trends that the use of digital photography offers people, which are cheaper and better.
This aspect is also emphasized by the fact that Kodak stood strictly on its traditional and well-established business model, not perceiving analysts warnings. Another mistake is a number of incorrectly made decisions by the companys management. They manifest themselves in the depletion of the financial capabilities of the company by acquiring small companies that could become a threat to it (Grant, 2015). The inability to stop the innovation process manually led to Kodaks not having enough funds to switch to new technologies successfully. Thus, the company entered the market, where certain players had already established themselves with much more financial and technological capabilities.
The company has spent much time not developing a detailed survival plan in conditions when the film will no longer be relevant but on researching ways to use digital technologies to improve film cameras. Thus, the company spent a significant amount of funds on developing and launching the Advantix camera. It allowed digital photographs to be taken, but only in order to capture the image on film later. Consequently, Kodak completely ignored the experience of competitors growing through innovation while striving to maintain its aging business model.
Reference
Grant, R. M. (2015). Eastman Kodaks quest for a digital future. Cases to Accompany Contemporary Strategy Analysis, 557575.
In terms of responding to the post on strategic errors made by Kodak since 1990, I tend to disagree with the students argument that this company paid much attention to boost the future of the shrinking film industry rather than identifying innovative changes.
In my opinion, I think Kodak was right when it applied a resource-based view approach to ensure that it utilizes available opportunity to save the shrinking future of the film market.
It is imperative to note that a company cannot employ innovative changes without having clearly defined strategy on its future performance (Hill & Jones 2012, p. 382). Therefore, I advocate that this was not an error and instead, Kodak was on the right track as opposed to the argument presented in the post.
In addition, despite the fact that the company missed a chance to be the first one to enter digital imaging market, it does not necessarily indicate that it lacked a competitive advantage amidst other film companies.
It is notable that there are film companies that could be leading in the digital market especially due to innovation but fail to succeed especially if the internal environment is not conducive. Contrastingly, industries which consider their market-based view to evaluate the external and internal environment of the business are likely to take off quite easily (Thompson et al 2012, p. 53).
Secondly, in as much as innovation is important as the student notes in the post, marketability of film products cannot be excluded since it can boost the performance of company in spite of minimal innovation (Thompson et al 2012, p. 53). Nevertheless, I agree with the students argument that innovative changes are essential since they enable a company to produce topnotch services to clients (Barney 2001, p. 44).
For this reason, I concur with the opinion that failure by Kodak to adopt digital technology in 1990s led to the emergence of other film industries that slowly took its position.
Therefore, despite the fact that Kodak has maintained its competitive advantage, other upcoming film companies have dominated the market and consequently low returns for Kodak.
Comments on the alternative strategic moves which Kodak could have made since 1990 to produce better outcomes for its stakeholders
It is definite that information provided by this post is a clear indicator that the main goal in an organization is to increase the profitability and better outcomes that will benefit the shareholders. Previous studies have revealed that there are strategies that can be applied in order boost share prices.
I tend to disagree with the students argument presented in this post that Kodak should abandon its profitable traditional business and embrace the digital one. In my opinion, I suggest that the company should incorporate both traditional and digital platform since it might take time before customers get used to the new changes.
Huang (2011, p.173) notes that changes should be effected gradually. Nevertheless, gradual elimination of ancient technology for modern one could be a vital strategic move for the company. In this case, I support the argument that highlights that technological diversification would finally save the company from being bankrupt and boost its potential to expand its sales.
Additionally, I own up the suggestion presented by the student that Kodak should gradually sell off the ancient business imaging, a factor that will save it from high operational cost. This will also enable the company to reshape and release its digital products to numerous niche markets and hence eliminate its historical competitors.
References
Barney, J.B 2001, Is the resource-based view a useful perspective for strategic management research? Yes. The Academy of Management Review, vol. 26 no. 1, pp. 41-55.
Hill, G & Jones, G 2012, Strategic Management: An Integrated Approach, Cengage Learning, Mason, USA.
Huang, K. 2011, Technology competencies in competitive environment. Journal of Business Research, vol.64 no. 2, pp. 172-179.
Thompson, A. et al 2012, Crafting and Executing Strategy, McGraw-Hill Companies Inc, New York.
The imaging and film industry has grown rapidly over the last five decades. Two of the major players in the industry include Kodak and Fujifilm. The two companies apply different management, and Corporate Social Responsibility (CSR) approaches that have varied influences on their profitability. Fujifilm has expanded to dominate the industry through innovation and diversification into different businesses. Kodak’s poor leadership and inability to adapt to change resulted in its bankruptcy in 2012. Fujifilm’s profitability is evident from its elaborate CSR approach and ability to innovate. In order to embrace innovation, Fujifilm invests in research and explores different sectors and businesses. In contrast, Kodak avoids diversification and instead forms partnerships with companies that produce related products.
Introduction
Kodak is an American technology company that provides services such as functional printing, packaging, digital printing, enterprise and graphics, commercial films, entertainment, and graphic communications (Hill & Jones, 2012). The company is famous for photographic film products that contributed to its domination of the film making and photography industries. On the other hand, Fujifilm is a Japanese photography and imaging company that sells products that include optical devices, printers, color paper, medical imaging equipment, photocopiers, photofinishing equipment, and high display materials (Hill & Jones, 2012). Both companies apply different management approaches that affect their willingness to innovate. In addition, they pursue different CSR approaches that have varied effects on their profitability.
History and core business of each company
Kodak was created in 1881 and was originally known as the Eastman Dry Plate Company (Hill & Jones, 2012). The company changed its name to Kodak after introducing a new type of camera that was branded with the name Kodak. The company initially focused on developing new methods of film development, printers, and imaging units (Muehlhausen, 2013). Later, the company decided to focus more of its resources on commercial markets. The history of Fujifilm dates back to 1934 when it was started (Peres, 2014).
It was the first producer of photographic films in Japan. As the company expanded, it incorporated innovation into business operations. Over the decades, Fujifilm has ventured into both consumer and commercial sectors of the film development and imaging industry. Its core businesses include the production of optical devices, printers, color paper, medical imaging equipment, photocopiers, photofinishing equipment, and high display materials (Muehlhausen, 2013). Fujifilm has been named the largest film and imaging company in the world based on its market capitalization and presence in different countries (Hill & Jones, 2012).
Management approaches that facilitate innovation
Kodak has sold many of its products and patents that had propelled it to world domination in the film and imaging sector. On the other hand, Fujifilm has continued to create more innovative products, improved their original products, and diversified their business ventures beyond film development (Muehlhausen, 2013). Today, Kodak focuses its business ventures in the fields of science and digital imaging.
The company embraced this approach after filing for bankruptcy. During that period, the company’s management implemented several measures that reduced costs of operation, business ventures, and the number of employees (Muehlhausen, 2013). It terminated its division of camera business for consumers and sold several patents to interested companies. In addition, it sold its online photo service and gave away its Personalized Imaging and Document Imaging business. This business venture was taken over by the United Kingdom Kodak Pension Plan (UKKPP) that was its greatest creditor (Muehlhausen, 2013).
After acquiring the business from Kodak, its name was changed to Kodak Alaris (Peres, 2014). After this incident, Kodak’s innovation efforts were thwarted. Reducing the rate of innovation was a good move that enabled Kodak to get back on its feet and continue operating despite filing for bankruptcy. In order to improve productivity and efficiency, the company reduced the number of its products in the market (Peres, 2014). This enabled the company to focus its resources and adapt to the rapidly changing technology that had been introduced into the film and imaging industry. Kodak decided to help photography enthusiasts by developing digital photo services to help customers manage personal image libraries effectively. This move was aimed at reinventing the company after its core businesses were affected by globalization and rapid technological shifts (Peres, 2014).
The innovative approaches applied by Fujifilm have certain similarities to those applied by Kodak. The company has numerous services and products that embrace innovation. For instance, its skincare and biotechnology products are based on the intensive application of innovation (Peres, 2014). The company offers its services in medical diagnostic systems, tablet devices, touch-sensitive screens for mobile phones, highly-improved lenses used in space exploration, and graphic systems used in streamlining the production of films (Hill & Jones, 2012).
Like Kodak, Fujifilm uses the management approach of diversification in order to embrace innovation. Its services in the production of cosmetics and pharmaceuticals show prove of this approach. In addition, contributing to pace exploration is another avenue for the company’s innovative products. Their innovative products are spread across six fields of business, namely digital imaging, healthcare, highly functional materials, graphic systems, document solutions, and optical devices (Peres, 2014).
Impact of other management practices to the company’s success
Kodak has adopted a new management approach that involves forming partnerships with other companies to expand the market for its products (Muehlhausen, 2013). In past years, Kodak did everything for itself and rarely formed partnerships with other companies. For instance, it entered into a partnership with Motorola to supply chips that would aid in operating cameras ingrained in Motorola phones (Peres, 2014). Kodak had to break away from its past principles in order to survive. On the other hand, Fujifilm invests heavily in research and development that enables them to create new products in diverse fields (Hill & Jones, 2012). For instance, the company makes Synapse Radiology PACS that are used in the medical field. Fujifilm explores any sector that has the potential for growth and innovation (Peres, 2014).
Approaches to ethics and social responsibility as well as their impact on profitability
As part of its social responsibility, Kodak is involved in the Electronic Industry Citizenship Coalition (EICC) that aims to improve the working conditions in various industries (Muehlhausen, 2013). This includes improving worker safety, enhancing the treatment of workers, and reducing the environmental impact posed by manufacturers.
On the other hand, the company has several sets of standards that its suppliers are required to follow in order to enhance environmental conservation. Only suppliers and manufacturers that meet Kodak’s environmental conservation standards are offered contracts. These approaches have greatly improved the company’s bottom line due to the increased number of customers who are pleased with its environmental conservation efforts. Fujifilm’s CSR approach is very elaborate. It is based on six policy areas that include biodiversity, social contribution, environment, occupational health, procurement, and safety (Muehlhausen, 2013).
Maintaining the trust of stakeholders and protecting the environment are core aspects of Fujifilm’s CSR approach. The company has an official Code of Conduct (COC) and the Charter for Corporate Behavior (CCB) that directs the activities and actions of all employees in order to ensure that they follow their CSR guidelines and goals. All employees are committed to the attainment of Fujifilm’s CSR goals in exciting their goals. Fujifilm’s approach is more profitable than Kodak’s because it takes care of the welfare of employees, the environment, and consumers
Adaptation of management to changing market conditions
Fujifilm is committed to synergistic management with all members of the Fujifilm group of companies in order to optimize growth and facilitate change (Peres, 2014). The company has a lean management structure that is integrated into the overall structure of Fujifilm Holdings Corporation. High investment in research and development facilitates the identification of opportunities and new technologies that are important for adapting to market changes (Hill & Jones, 2012).
The company is able to adapt easily to changing market conditions because its governance policies aim to increase corporate value and promote ethics as well as accountability among employees and other stakeholders (Muehlhausen, 2013). On the other hand, Kodak’s management is not well suited to changing market conditions. This is evident from past incidences of the adverse effects of emerging technologies on the companies’ competitiveness and sustainability efforts. Today, Kodak invests little in research and development (Peres, 2014). In addition, the company’s management is wary of diversification into other businesses. This has affected its profitability and ability to adapt to changing market conditions.
Recommendations
Three ways that companies can use to improve their ability to adapt to changing market conditions include investing in research and development, constantly improving the value of services and products, and implement change based on the needs and objectives of the company. Market research and development will ensure that companies invest in products that customers need and improve the value of their lives (Hill & Jones, 2012). Improving the value of products and services will ensure that a company gets rid of products that fail to satisfy the needs of customers. Customer satisfaction is critical to the sustainability of any company. Extensive analysis of problems and challenges ensures that a company is more flexible with regard to making decisions (Hill & Jones, 2012). Readiness to implement change is also very important.
Conclusion
Kodak was the pioneer in the film development and imaging industry. However, due to poor leadership and inability to adapt to change, the company filed for bankruptcy in 2012. On the other hand, Fujifilm embraced innovation, diversification, and good management practices to conquer the photography and film development industry. Kodak sold many of the products that had propelled it to world domination in the film and imaging sector. On the other hand, Fujifilm has continued to create more innovative products, improved their original products, and diversified their business ventures beyond film development into other fields.
Kodak’s CSR approach includes improving worker safety, encouraging better treatment of workers, and reducing the environmental impact of manufacturers. In contrast, Fujifilm’s CRS approach focuses on three main areas that include biodiversity, social contribution, environment, occupational health, procurement, and safety. Adapting to change is an integral aspect of enhancing a company’s ability to deal with changing market conditions. In order to accomplish that, companies should invest in research, link change to their future goals, and constantly improve the value of their products and services.
References
Hill, C., & Jones, G. (2012). Strategic Management: An Integrated Approach. New York: Cengage Learning.
Muehlhausen, J. (2013). Business models for Dummies. New York: John Wiley & Sons.
Peres, M. R. (2014). The Focal Encyclopedia of Photography. New York: Taylor & Francis.
Recording a history of the provision of photos and graphics, the Kodak companies is one of the pioneers of the photography industry. Their current bankruptcy case displays the brutality of the global market in terms of the long term sustainability. It is difficult to predict the performance of any company owing to the unpredictability of the market. One of the ways that is however being considered is the observation of the trends and their impact on the organizational strategy of a firm or an industry. The observation of trends is an essential aspect in the management of any business. Trends can be analyzed in terms of economic, social and political aspects (Katz, 2010).
A look at the concept of the global market showcases a shift of various policies, systems of governmental and social forces. One of the trends that continue to define the global market is the globalization. Globalization is the interaction between different economies and communities as a result of factors such as trade, technology, communication and immigration. Globalization changes the dynamics in which all companies perform. A study on the effect of technology on the market reflects on the performance on the Kodak situation. Globalization ensures that all economies are up to date with the latest inventions and innovations. The introduction of the cell phone in particular affected the sale and production of the company’s products.
The sensitivity to the economy of the economy is another issue that determines the performance of a company in the future. The demands and preferences of the market influences the production of the goods supplied.
The present society demands for efficient products that reflect on their fast paced life. The sale of the Iphone, Blackberry, Ipads and Galaxy tabs are the latest technology fads to hit the market. All these products displayed superiority to the Kodak products which could not compete in the end. Adapting to the current trends is ideal for the viability of any company. The inability of the Kodak Company to cope with the production of the latest products that competes with their merchandise made it vulnerable to the competitive market (Grant, 2010).
Cultural diversity is vital for determining the organizational strategy in the global market. The variety of cultures has different preferences and regulations that should all be followed by companies. The Kodak Company failed to meet the demands of the various cultures in the market. Most of the products were geared towards the western market forgetting countries in different parts of the globe. This in turn, impacted greatly on their public image making them loose a large percentage of their customers (Grant, 2010).
Trends in society, technology reflects on the products purchased by customers. The company’s products were not appealing to the modern society that demands multipurpose functions in their products. The change in the economy also reflects on the purchasing power of the market. The 2008 recession saw the demise of a number of companies that are yet to recover to date. Environmentalism concentrates on the treatment of the environment by the companies and economists. Companies that are not going green face a high chance of losing their position in the market. These factors are likely to create dramatic turns in the company’s future companies study how to identify opportunities in the market (Katz, 2010).
Future trends continue to control the activities of the current market environment. Most companies have to keep up with the changing forces by changing their strategies. The case of Kodak Pioneer films is one of the examples of a causality of the changing global economy. It is thus ideal to learn for the occurrence so as to prevent the fall of another historical company.
References
Grant, R.M. (2010). Contemporary strategy analysis (7th ed.). West Sussex, UK: John Wiley & Sons.
Katz, J. S. (2010). Competing for global dominance: Survival in a changing world. Silicon Valley, California: Happy About.
Kodak has undergone some difficult changes in the last couple of years. The company built a strong brand before the digital age came along even with stiff competition from the likes Fuji Photo Film Co. Outgoing chairman of Eastman Kodak George M. C. Fisher spent his entire five- and half-year tenure trying to push this company into the digital age When he was stepping down, Fisher declared that his digital strategy has worked and the company’s financial woes due to sluggish sales would be a thing of the past. His various strategic initiatives into the digital world predicted a boost in overall sales by 8-12% a year for the next 5 years.
Fisher claimed, “We have finally turned the corner; even though we do not have the results to prove it yet.” Certainly, analysts beg to differ. With companies like Sony Corp and Fuji Photo Film all fighting for a piece of the digital world market, Kodak will need some divine intervention to return to its former glories. (1999)
A Ray of Hope
The company’s hope now lies in the hands of Daniel A. Carp, a 29-year Kodak veteran. His new mission would be to rebuild consumer confidence in digital products; the same kind of trust the company has been enjoying in the film industry. This would certainly be a tall order. First of all, success in the digital market requires constant innovation, something a big company like Kodak is not known for.
Carp has built a reputation as a brand builder and the initiatives he’s undertaking appear to be directed towards brand building instead of revenue generation. This is a risky initiative since prices for digital technology have been predicted to reduce and this will expose the company to new competitors. However, the company must cut a niche in the digital world since it provides a direct threat to its core 35mm film business.
New Strategies
Kodak has pinned its core business on coming up with a strategy that bridges the old and new worlds of photography. Quoting Daniel Carp “We see digitization creating a film and a photo-finishing aftermarket that should fuel an explosion of pictures and use” While the company is still hoping for improved sales of its digital cameras, “the cash gold mine lies in the uploading of traditional pictures onto the internet, expanding its share in the market for reprints and photo editing software”(1999) Most industry analysts still criticize these projects saying they are long term projects and they won’t provide the “short-term sales jolt that the company badly needs.”(1999)
Nevertheless, Daniel Carp has continued with his ambitious plans and the crown jewel of his initiative is a joint digital venture with AOL which would give the company a strong internet identity. The venture which is called, You’ve Got Pictures, involves consumers uploading their 35mm film into their AOL accounts. For $6 a consumer will get a roll of 24 pictures digitally. From their AOL accounts, consumers will be able to Email their images to family and friends. Kodak has also been offering a nationwide service called a Picture CD. For ten dollars a roll, consumers can upload images from 35 mm onto a compact disk. The final strategy involves installing 19000 Picture Maker kiosks that print both digital and traditional film.
Are they working?
Most of these strategies are still built around brand development and they will not generate short-term revenue. Looking at You’ve Got Pictures Kodak will probably get 40% of the upload charge. Even if every AOL subscriber uses this service, Kodak’s revenue will amount to $41 million and this won’t solve its short-term problems since the service will take time before it hits its maximum potential. The picture CD will barely generate $10 million a quarter and this is still not enough. The only venture that is showing promise is the Picture Maker kiosks which have proved to be cash cows generating close to $200 million in sales. With a customer return rate of 95%, the revenue is bound to increase steadily.
Summary
Kodak should stick to what it has always been good at. Its sales in high-end cameras, though facing stiff competition from the likes of Sony have generated steady revenue. The Picture Maker kiosks underline the core strengths of the Kodak brand; producing photos! The picture CD or You’ve Got Pictures venture through innovative will only work with a small mid–sized company that can quickly re-invent its products to appeal to the consumer; not a brand like Kodak. (Monks, p 239)
Works Cited
Business Week online, “Film vs. Digital: Can Kodak Build a Bridge?” 1999. Web.
Monks Robert A G, Minnow Nell, Corporate Governance, Wiley Blackwell, 4th Edition, 2008, pp 236-239.
Successful companies take the concept of strategy seriously and implement the relevant changes to provide services and products that resonate with the demands of their respective customers. From the late 19th century, Kodak emerged and developed to become one of the biggest players in the photography industry. However, the company would become bankrupt in 2012. This discussion uses the video file “The Decline of Kodak…What Happened?” to describe how the leaders at this company failed to focus on disruptive technologies and how they could affect organizational performance.
Challenges of Technological Change
The studied article has exposed some of the realities that Kodak had to wrestle with in an effort to remain a market leader. When digital cameras emerged in the industry, this company was on the frontline and focused on the best approaches to delivering high-quality devices. However, the leaders examined the past of the company and realized that their cameras were not the primary source of profits (Company Man, 2018). Instead, photo film had changed the game for this company, thereby making it one of the most successful in the industry. Most of the partners at this company were convinced that Kodak was not going to benefit from digital cameras.
The company chose to ignore the emerging disruptive digital technologies despite the fact that it possessed some of the ideas and ideas in the industry. The leaders failed to consider and implement the most appropriate technological change that could help make it through the new century (Company Man, 2018). The absence of a contingency plan to keep pace and continue competing in the changing technological environment would affect the recorded profits, thereby forcing the organization to file for bankruptcy in 2012.
Kodak’s Competencies
The presented case study reveals that Kodak has had historical periods with divergent results and profits. Before its demise, the company was a leading innovator and producer of quality products and photography services that we’re capable of meeting the demands of more customers. Several competencies are evident from the company’s situation at the time. First, the leaders and followers were conversant with the requirements in the industry. Consequently, they were able to produce high-quality photo film and paper that delivered the best experiences to the customers. Second, the organization had developed and implemented an effective business model and taglines that appeared to attract more clients. For instance, the “Kodak moment” concept encouraged more people to rely on Kodak’s products to keep their memories. These practices will maximize the recorded profits and revenues.
Third, a proper culture existed that encouraged all the workers to engage in research and development (R&D) and produce superior products for different markets. Fourth, the company would succeed in innovating, developing, and marketing digital cameras. Finally, the able leadership of different managers contributed to the company’s success spanning over a hundred years (Company Man, 2018). These competencies explain how and why Kodak was able to overcome most of the challenges experienced in the industry and transform the overall experiences of most of its customers.
Imaging vs. Chemical Company
The analyzed video describes how the managers at Kodak chose to brand the company as an imaging corporation. Such a move made the company would not be concentrating primarily on its chemical segment. However, the leaders erred because the production and use of photo film could only be studied and understood from the chemical perspective. Such a move was wrong since the company was not entirely a photography organization. This decision ignored that the company’s central role or industry was that of chemicals (Company Man, 2018). With such a decision, the emergence and proliferation of digital cameras would make it impossible for the organization to break even since they were unable to compete directly.
From the nature of this scenario, it is evident that most of the emerging producers and designers of digital cameras would seize such an opportunity and focus on the best ways to meet the demands of more customers. If the company would have taken the area of chemicals seriously, chances are quite high that they would be able to focus on emerging chemicals that are demanded in different sectors today (Grant, 2019). Such an approach would have transformed the business model and supported the realization of the intended business aims. Consequently, such a mistake is to blame for the company’s failure and inability to achieve its objectives or profits.
Evaluating Kodak’s Approaches
The success of Kodak in the late 19th century could be attributable to the company’s ability to remain focused and examine the demands of its customers. Through constant research and innovation, Kodak was in a position to develop its quality photo film that would become the talk of the century. However, the emergence of modern technologies presented a new reality that all the professionals and entrepreneurs in different sectors had to take into consideration (Grant, 2019). Unfortunately, the company’s top leadership became obsessed with its success and competencies that had maximized profitability for more than a century.
The new developments called for organizational strategic change if Kodak was to maintain its competitiveness in the industry. Unfortunately, the leaders failed in the manner in which they managed such a transformation. First, the failure to consider the trends recorded in the external environment. Second, the company’s strategies were unable to monitor the expectations and demands of 21st-century customers (Company Man, 2018). These gaps made it impossible for the managers to introduce and implement an organizational-wide change that would result in a totally new business model.
The professionals failed to take the concept of organizational ambidexterity seriously. This concept means that the company was unable to introduce the right change, segregate modern units from traditional ones, and focus on new processes ad structures that would help transform organizational performance. The organizational leaders failed to analyze the trends associated with digital cameras and the changing factors in the external business environment (Grant, 2019). Consequently, the company would realize that it was facing a possible crisis.
When new challenges began to emerge, including the loss of revenues and reduced sales, the relevant leaders were reluctant to implement the most appropriate crisis management strategy. This gap would make it impossible for Kodak to develop or follow a contingency plan that would have helped transform the situation (Grant, 2019). Additionally, the company failed to capitalize on the available capacities ad develop them accordingly. With modern technologies presenting additional dynamic capabilities, the leaders remained reluctant and chose to ignore the digital camera that had already been patented successfully.
Kodak chose not to give the digital cameras they required. According to some of the professionals, the company had relied on its traditional performance to predict how cameras would only be intended to capture images that would then have to be printed on its photo paper (Company Man, 2018). While the relevant leaders were aware of the available information, they failed to embrace the power of knowledge management and make timely decisions that could have helped improve organizational performance.
Kodak’s Failure and Different Approach
The available evidence shows conclusively that Kodak’s failure was inevitable since it had failed to give digital cameras the attention they required. The time had come for corporations and businesses to get rid of traditional photography procedures and focus on the best ways to capitalize on modern technologies. Additionally, the choice to promote and support Kodak as an imaging company would make it less competitive when other players entered the industry in the later 1990s. From these facts, it is agreeable that Kodak should have focused on the best ways to produce and market digital cameras. This approach would have benefited from a new approach or business model that was not influenced by traditional performance (Grant, 2019). The leaders should have implemented the right change, consider the changing demands of more customers, and taken the issue of disruptive technology seriously. With such a different approach in place, Kodak would still be a recognizable and profitable company today.
Conclusion
The completed discussion has identified Kodak as a company whose demise is attributable to the leaders’ failure to remain prepared for possible changes and disruptions in the external market. The organization would eventually file for bankruptcy due to its ineffectiveness in knowledge management, strategic implementation, and crisis management. The identified alternative approaches could have helped the company stay afloat and meet the demands of most of the targeted customers.
The founder of Eastman Kodak is sometimes called a technical genius, but that is not entirely true. His undoubted virtue was his talent as a manager, who could see the future, believe in his product, and promote it. George Eastman did the main thing that all businessmen who think big strive for – he brought his product closer to the consumer, made it inexpensive and accessible, easy to use, and attractive. Nevertheless, despite the genius of the initial idea, the company failed in 2012 due to managerial mistakes.
Kodak’s failure is primarily due to a failure to identify new areas of business. Companies often see disruptive trends affecting their business and attract enough resources to participate in emerging markets (Bolo, 2017). Their failure tends to be an inability to embrace new business models truly. Kodak created the digital camera, invested in the technology, and even realized that photos would be available online. However, it failed to understand that sharing photos online was a new business, not just a way to expand the printing business.
Another management mistake was the high self-confidence of the management. Having taken a firm place in its niche, the organization stopped evaluating itself critically. Kodak was no longer coping with the digital revolution when Fuji started to do better with the old technology, the film business. Finally, Kodak’s lack of strategic creativity led to a misinterpretation of the same field and type of industry in which it operated, which was subsequently destroyed by the fundamental shift toward the digital era.
Strategic problems were solved by tough means, and because mistakes in the production process were costly and high profitability, Kodak avoided risky decisions and instead developed procedures and policies to maintain the status quo. In analyzing Kodak’s experience, several pieces of advice could be given to its management. Approaches to strategy, business models, and innovation management should be constantly reviewed. Moreover, one should be prepared to move from protecting the company’s competitive advantages to radical and revolutionary changes. Besides, it is important to adopt flexibility as an organizational development strategy.
Reference
Bolo, B. (2017). Kodak Black: Flying High to Success, Weird and Interesting Facts on Dieuson Octave! CreateSpace Independent Publishing Platform.
The main reason for the failure of the Kodak strategy is the erroneous desire to maintain the existing business model in a rapidly changing market. The analysis led the company to have the necessary time to form the consumer preferences it needs. The main reason for the failure is that Kodak sought to continue selling cameras, as the film brought a significant share of profits for the company (Grant, 2015). Consequently, the transition to innovative solutions in the field of digital photography was not taken seriously by the company. In this case, it can also be noted that the problem lies in the dilemma of innovation. The company failed to properly assess the opportunities and trends that the use of digital photography offers people, which are cheaper and better.
This aspect is also emphasized by the fact that Kodak stood strictly on its traditional and well-established business model, not perceiving analysts’ warnings. Another mistake is a number of incorrectly made decisions by the company’s management. They manifest themselves in the depletion of the financial capabilities of the company by acquiring small companies that could become a threat to it (Grant, 2015). The inability to stop the innovation process manually led to Kodak’s not having enough funds to switch to new technologies successfully. Thus, the company entered the market, where certain players had already established themselves with much more financial and technological capabilities.
The company has spent much time not developing a detailed survival plan in conditions when the film will no longer be relevant but on researching ways to use digital technologies to improve film cameras. Thus, the company spent a significant amount of funds on developing and launching the Advantix camera. It allowed digital photographs to be taken, but only in order to capture the image on film later. Consequently, Kodak completely ignored the experience of competitors growing through innovation while striving to maintain its aging business model.
Reference
Grant, R. M. (2015). Eastman Kodak’s quest for a digital future. Cases to Accompany Contemporary Strategy Analysis, 557–575.