Kodak Company’s Management Strategies

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Table of Contents

Introduction
Discussion
Conclusion
References
Appendices

Introduction

Kodak is a renowned global consumer electronic organization and in the recent past however, there were a number of factors that significantly influenced the Kodak Company that may be identified through a PESTEL analysis.

PESTEL is an environmental scanning tool which stands for political, economic, sociological and technological, environmental and legal factors (Macher & Richman 2004,p. 39). Technological changes over time have enormously influenced the Kodak Company in terms of changing as well as altering the company’s organizational customs and structure.

The biggest challenge faced by Kodak Company was the fact that in several markets, digital technologies had greatly advanced while Kodak looked on and did nothing. By the time the company attempted to catch up with these technologies, it suffered a major setback since it was too much at the rear to be able to catch up with the rapidly changing technology.

In addition, the strategy used by the company in an effort to fit in the changing technological times was nevertheless, unsuccessful.

This could be attributed to the fact that pursuing a joint venture with another organization caused conflicting situations, and Kodak could not match up easily with the already established performer. Consequently, the only viable option for Kodak was to split up the joint venture and work independent of each other.

Discussion

PESTEL Analysis

As earlier stated, there were a number of factors that significantly influenced the Kodak Company’s organizational change, and these factors can be identified through a PESTEL Analysis.

Beginning with the political factors, Kodak was greatly influenced by the political climate which caused considerable organizational change in the company.

Globalization as part of political development had a vital role in influencing the performance of Kodak. It is worth noting that besides politics, there were other factors that contributed significantly to the performance of the company. (Cooke 2002. p. 23).

Changes in the economic environment also played a significant role in the company. With the advent of globalization, there were more opportunities opening up in the global market, and this meant that more competitor companies infiltrated in the industry to compete for consumers.

According to an analysis undertaken by Tan & Tiong (2005, p. 27), the number of consumers Kodak served, changed significantly as a result of the company’s social economic consideration.

The increase in the amount of disposable income among the global population, as well as the rapid changes witnessed in terms of technological advancement allowed people to access new technologies that Kodak could not develop.

For these reasons, Kodak lost a significant market segment that it had controlled in the past. At attempt by Kodak to introduce changes to be at par with the rapidly changing technology made it much easier for the competitor companies to outshine the company.

In addition, social changes played a vital role in influencing organizational changes and performance of Kodak. There was a tremendous change in the consumer preferences and needs, and this called for changes to meet these needs as well as achieve the desired targets of consumers.

The consumers demanded high tech products for purposes of imaging and also to meet the needs of their status in the society. The circumstances as they were, practically forced Kodak to effect organizational changes in an effort to accommodate the changing needs of the consumers.

Pettinger (2004, p. 44) argues that due to globalization, the need to act swiftly and fast in respond to the consumer needs became the order of the day. Thus, there was a tremendous increase in the number of competing organizations each making an effort to outdo the other and win a bigger share of the market segment.

According to Henderson (1996, p. 36), the technological advancement in the imaging industry unlike any other, had witness rapid and sophisticated technological changes.

This rapid technological advancement had forced the already established players in the industry as well as the new entrants to device quick and viable means for purposes of responding to the consumers need and keep up with the technological trends.

Even though for a number of decades Kodak enjoyed international leadership in the field of imaging, the company was a little hesitant to engage itself in embracing and developing the new digital technologies for fear of the impacts that could emanate from such engagement.

Kodak further, failed to foresee the possibility of its products being outmoded by the emergence of the digital technology. Furthermore, the company failed to design a viable strategy to deal with the emerging competitors in other regions.

It should, therefore, be noted that by the time Kodak ventured into the development of the emerging technologies in the imaging sector, other competitors were far ahead of the company.

Further more, environmental factors also played a significant role in influencing organizational changes in the Kodak Company. Throughout the history of the company production process, there has been a big challenge particularly in terms of disposing off products from the company.

Tan & Tiong (2005, p.44), note that the chemicals used by the company to produce its product are very unfriendly to the environment. In addition, most of the products produced by the company do not decompose after disposal, thus, posing an environmental threat.

Developing and adapting a technology that would not compromise the status of environment posed a big challenge to Kodak, and in a way contributed to the sluggish performance of the company.

In the legal context, Kodak had to deal with different legal requirements of different countries in which it had established its subsidiaries, a factor that significantly affected the operation of the company. In an effort to mitigate this challenge,

Kodak decided to enter into joint venture with other organizations which were technologically advanced in different countries. As such, it could be able to meet the needs of consumers, as well as keep a significant market share.

Nonetheless, there emerged organizational conflicts within the joint ventures that obstructed the vibrancy of the company (Johnson & Scholes 2002, p. 13).

SWOT Analysis

SWOT Analysis involves identification of the pertinent factor and assessing the significance of each one of these factors. The factors are both internal (strengths and weaknesses) as well as external (opportunities and threat) as presented in the table below:

Analytical factor	Relevance
Strength (Internal)	Kodak has a reputation of producing product of high quality for its clients, thus, the company is able to entice a significant number of customers to purchase its products. The company also has a wide range of consumers for it products such as the professional in the photography, film, as well as ordinary people who are fascinated by the company’s rewards and advertisement drives (Geary 1995, p. 32). The products produced by the company are also very user friendly as they are simple and easy to operate.
Weakness (Internal)	It is a known fact that Kodak has been very slow in responding to the rapidly changing needs of the customers in terms of developing technologically sophisticated products, and this affected the profit margins of the company. It should also be noted that Kodak failed to foresee the possibility of its products being outmoded by the emergence of the digital technologies. Kodak also failed to design a viable strategy to deal with the emerging competitors in other regions, thus, losing a substantial market segment to its competitors in other regions (Booch 1996, p. 16).
Opportunity (External)	Even though there are numerous competitors in the film industry, all is not gone for Kodak since the company has a long standing reputation that can be used to capture a significant segment of the market. Moreover, the consumers as well as the suppliers in the film industry may not be able to entirely direct the market forces. As such, producers such as Kodak do have the opportunity to determine the prices for their products, thus, keeping up with the speed of other competitors. In addition, Kodak has a well established relationship within Non Governmental Organization as well as various governments across the globe. By using such links, the company can be able to keep up with the market trends (Graetz et al 2002, p. 65).
Threat (External)	The massively growing demand for technologically advanced products in the imaging industry poses a major threat to Kodak in the sense that there several other players in the industry that are well established, such as, Sony and other which have successfully developed high tech digital products that have out modeled products from Kodak. Additionally, with the rapid growth of the internet technology, as well as the emergence of cellular phones which come with cameras on them, create a situation that may phase out players such as Kodak in the film industry (Taylor & Cooper 1988, p. 57).

Conclusion

The operation of Kodak in an industry that has experienced massive evolution particularly in the context of digital technologies presented the company with challenges that saw the decline of the company in the recent past. Through PESTEL Analysis, one can be able to identify a number of factors that influenced the performance of Kodak.

PESTEL Analysis engages an assessment of issues such as political, economic, sociological and technological, environmental and legal factors, and their impacts on the company.

SWOT analysis, on the other hand, involves identifying the factors that are relevant to the company, and examining their significance. These factors in the SWOT analysis include the internal strength and weaknesses of the company and the external opportunities and threat of the company as discussed above.

References

Booch, G (1996), Object Solutions: Managing the Object Oriented Project, Addison- Wesley, London UK.

Cooke, FL (2002), Maintenance Work, Maintenance Skills, Blackwell, Oxford UK.

Graetz, F. et al (2002), Managing Organisational Change, John Wiley, London.

Geary, J (1995), Work Practices: the Structure of Work, in Edwards, P. (ed) Industrial Relations: Theory and Practice in Britain, Blackwell, Oxford UK.

Henderson, RM (1996), Technological Change and the Management of Architectural Knowledge, Sage Publications, Thousand Oaks, USA.

Johnson, G., & Scholes, K (2002), Exploring Corporate Strategy, FT Prentice Hall, London.

Macher, JT., & Richman, BD (2004), Organisational Response to Discontinuous Innovation: a Case Study Approach, International Journal of Innovation Management, Vol. 8 no. 1, pp. 37-52.

Pettinger, R (2004), Contemporary Strategic Management, Palgrave Macmillan, Basingstoke.

Tan, V., & Tiong, NT (2005), Change Management in Times of Economic Uncertainty, journal of UK Management Review, Vol. 27, no.1, pp 23-40.

Taylor, H., & Cooper, CL (1998), Organizational Change: Threat or Challenge? The

Role of Individual Differences in the Managing of Stress, Journal of Organizational Change Management, Vol.1, no. 1, pp 56-72.

Appendices

Analytical factor	Relevance
Strength (Internal)	Kodak has a wide range of consumers for it products, such as professional in the photography, film industry, as well as ordinary people who are fascinated by the company’s rewards and advertisement drives.
Weakness (Internal)	Kodak has been very sluggish in developing digital technologies which other companies have embraced and developed.
Opportunity (External)	The company has had a long standing reputation for its quality products.
Threat (External)	Kodak products were out modeled by other organizations that had developed and advanced digital technologies.

PESTEL- Political, Economic, Sociological and Technological, Environmental and Legal Factors

SWOT- Strength, Weaknesses, Opportunities, and Threat.

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