Eastman Kodak's Quest for a Digital Future

Management 10 Influencing organizational strategy 7/31/2019 Case 12 Eastman Kodak's Quest for a Digital Future Contents Introduction 2 Overview of company 2 Kodak’s digital imaging strategy during 1992-2012 3 Porter’s five forces 3 Kodak’s digital imaging strategy fails 5 SWOT analysis 6 Better alternative to the strategy 9 Other companies facing disruptive change in their core business learn from experience of Kodak 10 Conclusion 12 References 13 Appendix 15 Appendix 1 15 Appendix 2 15 Appendix 3 16 Appendix 4 17 Introduction The aim of

Influencing organizational strategy
7/31/2019
Case 12 Eastman Kodak's Quest for a Digital Future

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Contents
Introduction......................................................................................................................................2
Overview of company..................................................................................................................2
Kodak’s digital imaging strategy during 1992-2012.......................................................................3
Porter’s five forces.......................................................................................................................3
Kodak’s digital imaging strategy fails.............................................................................................5
SWOT analysis............................................................................................................................6
Better alternative to the strategy......................................................................................................9
Other companies facing disruptive change in their core business learn from experience of Kodak
.......................................................................................................................................................10
Conclusion.....................................................................................................................................12
References......................................................................................................................................13
Appendix........................................................................................................................................15
Appendix 1.................................................................................................................................15
Appendix 2.................................................................................................................................15
Appendix 3.................................................................................................................................16
Appendix 4.................................................................................................................................17

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Introduction
The aim of the report is to analyse the case study of the Eastman Kodak Quest for a Digital
Future. This report reflects the knowledge of strategy and management of strategic that can be
implemented by company with the influence on organisational strategy development. Along with
this, it includes the strategies of organisation that take cognisance of the internal and external
influences and knowledge the ambiguities and complexities surrounded with major decisions.
The associated questions from the case study that are evidence include Kodak’s digital imaging
strategy during 1992-2012 and the reasons behind the failure of strategy. In addition, the better
alternative to the strategy of Kodak are explained. It has been witnessed that other companies are
facing disruptive change in their core business that are majorly leant from the experience of
Eastman Kodak.
Overview of company
Eastman Kodak Company came into existence in the year 1901 that offers a full range of
products and services for the amateur photographer. After the Second World War, Kodak entered
into the phase of growth with an expansion of core business and diversification majorly into
chemicals as well as in Health care.

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Kodak’s digital imaging strategy during 1992-2012
The company Kodak commitment to the digital imaging strategy was majorly scaled with the
recruitment of the George Fisher as CEO of company. The major focus Kodak’s effort on the
digital challenge, the fisher’s prior move was to make the divest in Eastman Chemical Company
and most of Kodaks healthcare businesses with the motive to form the single digital imaging
division that is controlled by the newly appointed Carl Gustin (Grant, 2016). Kodak formed the
digital strategy with the motive to convert the traditional photographic company to the digital
imaging. During the year 1993-2011, the strategy of Kodak is embodied with major four themes:
-
 An approach of incremental to manage the transition to digital imaging
 Diverse strategies for consumer market also for professional and commercial markets
 Sourcing of knowledge from external market through hiring, acquisitions and alliances
 Focus on printed images
 Harvesting the outdated photography business
Porter’s five forces
The digital strategy of the company can be understood best with the help of the Porter’s five
forces model, which talks about the evolving industry, as well as adoption of the technology by
most of the players in the market (Baker, 2014). This model is selected for the evaluating the
strategy because this helps in analysing the competitive nature of industry.
Industry rivalry: - It has been found that Kodak has brought the revolutionary change in order
to form the strong position in digital technology. The business of Kodak shifted entire from

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completely chemical based technology to digital technology that took pictures, downloaded them
onto their computers and many others. It has been found that not only would the new digital
value chain make the dismissed most of the core competitive advantage (Dawson, 2014). Fisher
identified the potential and pushed Kodak to form the high competitive market. The company
found the high competition from Fuji Photo Film who is known for the aggressive strategy for
the international expansion. In addition, another company that offered the high competition
include Xerox that led the new field of electrostatic plain-paper copying that gives the
competition in the field of Focus on printed images. Thus, this can be said that industry rivalry
for the Kodak is Moderate.
The consistent feature of the digital strategy of Kodak from the year 1993 to 2012 was belief that
digital technology would never eliminate any sort of printed image and this reinforced its
capabilities (Grant, 2016). (Refer Appendix 1)
New entrants: - In the field of the digital technology, there is possibility of the high new entrants
in the market. There is emergence of the new technology like Polaroid pioneered instant
photography, plain-paper copying, digital cameras and many others. These new technologies
lead to the rise in the high threat of competitors in market (David, 2011).
Bargaining power of customers: - The digital strategy of Kodak reflects that they have adopted
diverse approach to customers and professional/commercial market. These customers provided
the test-bed for the company has advanced digital technologies that major focuses on customer
segment to maintain the position as leader by offering quality, simplicity, and value (Frynas and
Mellahi, 2015). The company incremental strategy is majorly evident in the market of customer
because through this they can provide the easy way to customer in order to transition to digital

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photography. Thus, this strategy left the customer with the low bargaining power because Kodak
becomes effective in offering services. (Refer Appendix 2)
Commercial and professional markets are essential for the customers for many of Kodak cutting-
edge digital technologies that include news photographers that are adopters of digital cameras.
Bargaining power of suppliers: - Kodak Company has also followed the strategy of sourcing of
knowledge from external market through hiring, acquisitions, and alliances. Kodak formed the
commercial building business on acquisitions and developed technologies that are notable
Heidelberg's Nexpress and Digimaster businesses, and Scitex, which is majorly supplier of
Versamark high-speed inkjet printers. Kodak Company is able to form the presence in pre-press
as well as workflow systems that are used by the commercial printers. This shows that there is
low bargaining power of the suppliers in the market.
Threat of substitutes: - In the case, it is witnessed that there is low threat of substitutes because
the customers and professional/commercial market prefer to avail the digital services that helps
them to remain on demand. There is lack of availability of product that work as substitute of
digital technology (Hollensen, 2015).
Kodak’s digital imaging strategy fails
In the case, this has been found that Perez’s brave words made the observer to see the little
likelihood of Kodak that would emerge as one of the significant player in the imaging sector.
However, the reality related linked to the digital strategy shows that after the billions of dollars
investment in the new technologies as well as in the new products the company failed to form a
viable digital imaging business (Kotler, 2015). The financial performance of Kodak reflects that

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there strategy failed in terms of the technical and market achievement. It has found that Perez
and its two predecessors include George Fisher and Dan Carp were unable to form the financial
viable digital imaging business. (Refer appendix 3) However, this strategy of the business was
not successful and failed which is explained with the SWOT analysis of strategic management.
SWOT analysis
The analysis of SWOT includes strengths, weaknesses, threats, and opportunities for Kodak in
the market (Chernev, 2018). The application of this model helps in analysing the reason behind
the strategy of Kodak that is given below -
Strengths
 The major traditional resource strength of Kodak includes its brand image in the market
along with the distribution of product across the global area. This has been witnessed
when in 2011; MPP consulting had ranked Kodak in the 77th most valuable brand of US.
 Technology is considered as one of the strength of company as Kodak has maintained the
world’s biggest research efforts majorly in imaging. At the time of year 2000-2005, the
research labs in UK, US, Japan, China, Australia, and other had employed more than
5000 engineers and scientists that include more than 600 PhDs (Grant, 2016).
 Kodak’s strength in basic and applied research that is evident from the long successful
history of the company that involves the launching of the new products.
Weaknesses
 The decline as well as wrenching technological changes has leads to the weakness for the
company in terms of brand image (Grant, 2016). From the year 2011, the issue was extent

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to which it majorly adds the value and appeal to market to Kodak’s consumer as well as
the commercial products.
 The major weaknesses of the company that lead to the failure of the strategy include the
emphasis on the wrong markets as well as products. Kodak losses had been in the market
of consumer with the traditional stronghold.
Opportunity
 The initial opportunity of the Kodak’s is its proprietary inkjet technology that majorly
includes the technically superior inks.
 The leadership opportunity of Kodak includes the variable-data printing that allows the
individual person to customize the output.
 In the high-tech world, there was a stampeding to attain a piece of the action calling the
digital imaging perhaps the greatest growth opportunity in the world of computer
(Rothaermel, 2015).
 In the case, it has been found that the Kodak opportunity was to exploit the transition
from the traditional offset of printing to the digital mode that include full color, variable
printing and many others.
 The less competitive price pressure leads to the opportunity for Kodak in the market
majorly in consumer sector to bring the differentiation in its offering with the help of
packaging software, hardware and many other services that are used to customized the
user solutions.
Threats

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 The digital strategy of the company was failed because Kodak found it difficult that too
slow or that it had failure to determine the threat in terms of digital market as early as
1979.
 The company failed in terms of being a laggard in forming the capabilities that are
required to compete with the digital imagining strategy. The market leadership of the
company in context of the digital cameras pointed out the ability to form the technology
and apply in order to develop the new range of attractive products and market those
products in the fiercely competitive digital markets.
 The rise in the competition and rivalry also become the leading threat for the company
due to which there was possibility of the failure of digital strategy of the company for
which they made huge investment.
In the case, the overall weaknesses and threats reflects the major reasons behind the failure of the
digital strategy implemented by the Kodak in the market. However, this has been found that
company was in support of resources and capabilities that work as the strength for the company
in the market. Along with this, the opportunities of company made them to work and grab the
business opportunities in related to the digital strategy. These opportunities leads to strengths but
also improved the threats as well as weakness that lead to the failure of the strategy of the
company.
Overall, the analysis shows that Kodak deals with the difficulty to identify the threat related to
the digital and to instaure a digital strategy. In addition, Kodak Company majorly focuses on the
wrong products as well as on markets, which leads to failure of the digital strategy of the
company. The company was not able to focus enough on the new trends as well as on innovation
due to which their digital strategy failed.

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Better alternative to the strategy
In the case, this has been clearly witnessed that the Kodak’s digital strategy was failed in the
market. This has been found that on basis that the transition to digital photography would be
gradual that Kodak supposed that the transition period would give it the opportunity to generate
the cash flows from its legacy film business while investing in digital imaging products and
technologies. The prediction of Kodak’s gradual transition from the film to digital imaging that
was largely correct. However, this has been found that in 1990s, the sales of film continue to
grow in the market of US, which is reaching a peak of over than 800 million rolls in the year
1999. The decline began in 2000 that is accelerated at the first time of 21st century. By the 2004,
revenue had halved to under 400 million and by 2011, the revenue had declined to below
100,000. The forecasting of Kodak proved to be wrong in relation to developing market demand.
The acquisition of the Chinese photographic film manufacturers were majorly founded on
assumption of revenue of roll film that would continue to improve in 21st industry (Grant, 2016).
The better alternative to strategy includes investment in market with growth opportunities that
leads to change and innovation in the business. The business has ability to bring the change as
well as innovation that helps Kodak to deal with the needs and demand of the customers (Ansoff,
et al, 2018). The company need to grab the opportunities as it never prepared from begin of
digital revolution. The company traditional photography shows that they implement cost
leadership strategy (Wada, 2018). The alternative strategy of the business includes the
diversification to the digital photography. The diversification strategy of the business shows that
Kodak manages the business diversity (Wilson and Gilligan, 2012).
The reason behind the diversification strategy is that on the competitor of company that is
Fujifilm achieved the success when they were in the same condition like Kodak, both the

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companies were heavily dependent on the imagining technologies. However, this has been found
in the case that both the companies have adopted the different strategies that lead to the diverse
results in terms of financial (Betz, 2016). The similarity that has been found in both the
companies includes implication of the digital imaging strategy to support its core business but
they struggle to adapt the same. The major difference that occurs in both the companies include
that Fuji’s recognition found that digital imaging alone will not be able to offer the full support
due to which they majorly focus on diversification. The diversification was done by the company
in their business which is witnessed with the three segments that include Imaging solutions
(14.8% of total sales) Information solutions (40.5% of total sales) and Document solutions
(44.8% of total sales). Thus, diversification strategy is the reason due to which they attained the
high profit and achieved the success in the market (Wiersema and Beck, 2017). (Refer appendix
4)
Considering the situation of Kodak, they majorly focused on cost leadership and improved
quality with service that affected the success of business. In addition, the business has done
investment on technology that was all failed because they were not able to form the effective
digital strategy. It has been witnessed Kodak alternative strategy is diversification, with the
implementation of which the company might be able to achieve the success.
Companies facing disruptive change in their core business learn from
experience of Kodak
In dynamic environment, companies are performing their businesses in which they are facing the
disruptive changes in their core business with the emergence of technology. The case of Eastman
Kodak has taught a lesson to the companies like Microsoft, Sony, and Walt Disney. The case

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clearly shows that the resources and capabilities of the company can be strength of the company
for achieving the success and continuing with the strategy (Teece, 2019). However, the
companies need to ensure that they are able to achieve the success in the market. The technologic
factors have brought numerous changes and this is the reason they are depended on this factor.
The experience of Kodak shows that companies like Microsoft, Sony, and Walt Disney need to
make the strong strategy with not only the single strategy but also with more than one strategy
that is required for the success of business. the business need different units and segments from
which they can attain the profit so the companies should not focus on single segment of business
but rather they can bring the diversification that helps them to bring more than one segment
which leads to their success and prevent them to deal with any failure in the strategy (Holloway,
2018).
Along with this, the companies should focus on the product development with innovation that
contributes effectively in improving the business. The new product development will open the
opportunity for the company for the high sales and revenue in the market (Makadok, Burton, and
Barney, 2018). Moreover, it is essential for these companies to have a clear vision in the market
that shows how they will be able to achieve the success.

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Conclusion
In the end, this can be concluded that Kodak case study shows the steps taken by the company
towards the digital strategy during 1992-2012. This digital strategy is understood with the help of
porter’s five forces because this has been witnessed that market is competitive and industry
evolution is taking place. However, after the efforts of the company it has been found that their
strategy failed which is explained with the help of SWOT analysis that include weakness and
threats that become the reason behind the failure. Considering the entire case, this can be said
that the company should have adopted the diversification strategy that helps them in achieving
the success in the market. Along with this, the experience of Kodak helps the other companies to
take the required steps for their own strategy.

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References
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strategic management. Springer.
Baker, M. J. (2014) Marketing strategy and management. London: Palgrave Macmillan.
Betz, F. (2016) Diversification Strategy', Strategic Thinking.
Chernev, A. (2018) Strategic marketing management. Chicago:Cerebellum Press.
David, F.R. (2011) Strategic management: Concepts and cases. India: Pearson/Prentice Hall.
Dawson, J.A. (2014) The Marketing Environment (RLE Marketing). New York: Routledge.
Frynas, J.G. and Mellahi, K. (2015) Global strategic management. USA: Oxford University
Press.
Grant, R.A. (2016) Case 12 Eastman Kodak's Quest for a Digital Future. Cases to Accompany
Contemporary Strategy Analysis, 557-575.
Grant, R.M. (2016) Contemporary strategy analysis: Text and cases edition. New Jersey: John
Wiley & Sons.
Hollensen, S. (2015) Marketing management: A relationship approach. India: Pearson Education
Limited.
Holloway, S. (2018) Changing planes: A strategic management perspective on an industry in
transition. Routledge.

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Kotler, P. (2015) Framework for marketing management. India: Pearson Education.
Makadok, R., Burton, R. and Barney, J. (2018) A practical guide for making theory contributions
in strategic management. Strategic Management Journal, 39(6), pp.1530-1545.
Rothaermel, F.T. (2015) Strategic management. UK: McGraw-Hill Education.
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Wada, T. (2018) Capability-based cost leadership strategy of Japanese firms. Annals of Business
Administrative Science, 17(1), pp.1-10.
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Wilson, R.M. and Gilligan, C. (2012) Strategic marketing management. New York: Routledge.

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Appendix
Appendix 1
Appendix 2
Incremental strategy

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Appendix 3

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Appendix 4