MBA International: Influencing Organisational Strategy - Kodak's Case

This essay analyzes Kodak's digital imaging strategy from 1992 to 2012, examining why it failed and exploring potential alternatives. It delves into Kodak's incremental approach, emphasis on printed images, and external sourcing of knowledge. The essay discusses the challenges Kodak faced, incl...Read More

Influencing Organisational Strategy

Table of Content
Introduction................................................................................................................................3
1.0 What was Kodak’s digital imaging strategy during 1992-2012?.........................................3
1.2 Why did the strategy fail?....................................................................................................6
1.3 Was there a better alternative to the strategy?.....................................................................8
1.4 What can other companies facing disruptive change in their core business (e.g. Microsoft,
Sony, Walt Disney) learn from the experience of Eastman Kodak?..........................................8
Conclusion................................................................................................................................10
Reference..................................................................................................................................11

Introduction
Any organization in the business sector maintains a set of decorum of planning. This
planning influences the working strategy and provides profit to the organization. Following a
definite planning within an organization is strategy. Implementation of strategy has to be in
an efficient way with a superior leader evaluating it. Organizational strategy is the all over
actions taken to develop a certain strategy (Cannon et al., 2011). Planning is form to organize
the structure of the industry. In other terms, to acquire the long-term scale productions,
implementation, evaluation and planning is included in the strategy development. A strategy
values the vision and goal of an organization. It is the holistic and integrative needs of an
organization. This organization builds up with a strategic planning.
Strategy management is implementing the goals to achieve certain objectives. Objectives are
set forth to acquire revenue. In the early 2000s, Kodak Company face a tough time in the face
of the marketing industry. In spite of occupying a pioneer role in the digital marketing area,
company fail to realize the importance of capital on digital marketing. In a society, when
there are not too many companies to compete with one another, strategy management is not
so essential. With the presence of competitors, the concept of strategic management comes
into existence. Population growing numerically led to the need of the demand of variety and
diversified products. Kodak fail to assure this part of the customers wants.
1.0 What was Kodak’s digital imaging strategy during 1992-2012?
In the year 1990, Kodak had launched photo CD system for storing photographic images. In
the era of George Fisher as the CEO, first digital camera got introduced. The concept of
Kodak having photographic business changed to picture business.
It was consider as a leader in the field of digital minilabs. It embraces first megapixel
electronic image sensor following a number of new products for scanning and electronic
image capture. Storage, retrieving and editing graphical and microfilm images was possible
with the assistance of computers. The photo CD system helped the digitalized photographic
images to be stored in compact disk. There was a huge transformation from traditional
photographic company to digital imaging. Different strategy was frame for consumer market
and for the commercial markets. There was more emphasizes on the concept of printed
images. It was an evolutionary change that evokes the key abilities of Kodak in the field of

digital technology. Digital imaging was to ease the use of commercial benefits. The strategy
followed by Kodak during the era of 1992-2012 was:
 An incremental approach to managing the transition to digital imaging
 Bring traditional approach to the concept
 An emphasis on printed images
 External sourcing of knowledge through hiring, alliances, and acquisitions
 Different strategies was followed for the consumer market and for the professional
and commercial markets
‘Organizational strategy’ determines the design as well as the managerial role, which sets
up and coordinates with the various work process (Moran and Morner, 2017). Strategy is
build up with the views of achieving goals, objectives following certain practices and
activities. Different forms of organizational strategy are business unit, regional, functional
strategies. This strategy is build up on performance measures, critical skills, decision
authority. Strategic planning is building up on a definite timing zone, calculating the
requirements in next 6 months, then 6- 18 months and 18-36 months. Any strategy is build up
to where the company will stand in the next few months. If the development is achievable in
the assumed month, then strategy is successful. Any business unit completes itself including
research development, manufacturing, marketing, human resources and finance. Decision-
making is one of the strategies.
Incremental approach to the strategy: This approach signifies the step-by-step transformation
from the process of analogue to digital transformation. Launching new product for the
customer, including commercial printing was an organizational strategy but did not led to the
growth of the Company (Freeman, 2010).
In the first few era of quarter of the 20th century, Kodak was one of the leading companies in
the digital marketing scope. Rapid change in the technology was not the only reason behind
Kodak’s failure.
Building up a strategy includes locating the weakness and the strength of an organization.
This is call situation analysis. Working on the strategies helps to build up efficient
organizational workflow. Strategy is form to achieve some desired feature. Driving a strategy
within an organization requires proper planning and implanting those in the work place.
Strategy helps to deliver outstanding customer experience, lead in design, innovation and

sustainability, helps to excel in sales and operations, create additional value with acquisitions.
In an organization, strategically diagram is in the form of a pyramid. Any management
includes production. To achieve the production in an efficient form and develop customer
satisfaction, strategy is essential to be follow. Successful entrepreneurship is acquirable with
the help of strategy. In teamwork, strategy is follow with the collaboration of the employees,
staff s and the leader or officer executing the strategy.
Strategic management includes the five stages to achieve success:
Stage 1 includes the position at which Kodak is standing depending on the traditional
photography system.
Stage 2 includes focussing on the end to be achieving by Kodak in terms of digital imaging.
Stage 3: What means can be use to achieve the goal? This includes the transformation from
analogue to digital technology. This was one of the challenges for the Kodak Company.
Kodak, introducing aspects of digital imaging, followed a hybrid approach. This offers truly
enhanced functions available for users. Before going forward, Kodak realized that traditional
photographic style affected consumer more.
Stage 4: Evaluating the best outcome is possible with the help of strategic planning. The
strategy was to make digital camera usage easy-to-use for consumers.
Stage 5: Evaluating the measures and precautions to be taken to achieve the goal.
Strategic Management is following the set of managerial decisions and actions taken to
evaluate the long-term production of an organization. This management includes external
factors like scanning, strategic formulation, implementation and evaluation and control.
There are certain phases of strategic management, which includes:
Basic financial planning: this involves little analysis of the structure and the possible
outcomes (Kotter, 2012). Gathers information from the organization through employee,
Financial planning is carried out by the managers or officers. Budget formation is form with
the help of the structure, which takes 2-3 weeks. The entire plan is period of taking 1 year to
achieve the outcome.

Forecast based planning: It requires a deep analysis of the structure, with more information
and data within the firm (Crook, 2012). Environmental data is also requiring to be collected
to form the analysis. It consumes a time of 3-4 year to structure out the entire planning.
Strategic Planning: This consumes a period of approximately five-year plan. It also includes
thorough analysis of the possible outcomes and future trends.
Strategic Management: It analyzes both the external and the internal factors affecting the
organization. This includes the marketing process of implementation, evaluation and
planning. It includes all the employees, actually a collaboration of the staffs and the officers
within the firm. This takes the period of approximately five year.
Strategic management follows certain objective to accomplish in these following:
Establishing the mission, formulating philosophy, activating people, establishing policies.
Within an organization, it enhances proper understanding the standards, effective
communication, enhances commitment and more importantly increases productivity.
Business strategy includes teamwork, plan, marketing and opportunity. Strategic management
is different from operational management. Strategic management forms planning to acquire
production in long-term scale. It allows an organization to be proactive than reactive.
Following a strategy and implementing it, acts as a ladder to an organization. Evaluating a
marketing plan includes following the 7Ps effectively. Visually it was recognizable that not
only did Kodak lack much of the expertise needed to build a digital imaging business but also
the pace of technological change was too rapid to rely on in-house development. Identifying
products and activities, where Kodak could add value was one of the strategies.
Harvesting Traditional Photography Business:
Regard to the transition process, Kodak believes that it would provide opportunity to generate
cash from legacy film business. In terms of marketing demand, Kodak face decline. Sales of
roll film were assuming to have increase in the 21st century. Kodak company earned more
from the consumables.
1.2 Why did the strategy fail?
The strategy failed due to some reasons. Existence of traditional photographic and its
dominance on the consumers was one of the challenges to Kodak. If photography transform

from traditional chemical-based technology to digitalization, Kodak would face this as a
challenge. Computer hardware and software companies occupied major of the portion, which
again would threat Kodak Company. Traditional photography though could have a dominant
role to play in photography, yet changes would be welcome very soon. Digital photography,
which was matter of joke few years ago, has now occupied a major portion in the
photographic industry. Financially, the Company had fallen to 334th position by the year
2011 (Ray, 2013). Employment has shrunken to 17,100 from 133,200. In the budgeting
sector, Kodak faced a total loss of $5.2 billion. Kodak lacks the requirements of the
experienced and experts in the field of digital world.
Kodak faces a challenge from the rise of the Fuji Photo Film Company. Kodak fails to
acquire internal expansion in its strategy. Fuji on the other hand took advantage of this
strategy in its growth (Decker et al., 2012). New imaging technologies were developing back
logging Kodak. Polaroid pioneered concept of instant photography. Xerox even led to the
introduction of plain-paper copying. Using personal computer evokes the use of new image
management and printing technologies. The commitment to digital imaging strategy closed
with the emergence of George Fisher. Although there was ownership with inkjet printers,
much focus was on the use of photo-print facilities in retail stores. Kodak faced a huge
decline of its sales of X-ray film and chemicals and accessories. Kodak faced immense
competition. In cases of digital hardware, dominant forces were many players. This also
involved low entry barrier, falling real prices. Kodak faced challenges from Xerox, Hewlette-
Packard, 3M, and Oji. Many minor brands also affected the Company. With the advanced
technology, the demand for photographic demands in forms of prints reduces. The company
took a huge time to move from traditional long and meticulous product development to fast-
cycle world of electronics.
Any marketing strategy is build up on the concept of 4Ps. This 4Ps are Product, Price, Place,
and Promotion. Kodak emphasized on Product quality rather than on the other three
marketing mix elements. Product oriented concept was accepted but to some extent. With the
change in the technology, Kodak fails to implement the strategies of the Ps. Another strategic
failure was difference between evolutionary and revolutionary. The new digital imaging was
different as compared to Kodak following the principle. Kodak grew its potentialities in film
and paper, chemicals and photo processing rather on technological advancements and
resources. The transformation was slow from traditional concept to digital imaging
technology. The advance age has weakened the position of Kodak in terms of capturing

images. Lack of globalization also affected the strategic planning of Kodak. Kodak has tried
to bring the two CEOs in the company for innovation but it led to a drastic growth.
Lacking to fulfil the requirements of the customers was one of the important strategy failures
of the Kodak. With the introduction of new technological process, customers need and wants
vary from time to time. Kodak failed to apply these strategies and understand this concept.
1.3 Was there a better alternative to the strategy?
There was alternative strategy which can be follow by the Kodak company was
transformation from analogue technology to Digital technology. Kodak Company did not
determine pricing strategy. Long design cycle could have being incorporating with rapid
prototyping. Flexible manufacturing process could have increase the scope of the value of the
Company. Just-in-Time approach is one of the operational management styles, which could
have been use by Kodak Company. Promotion failed as digital imaging concept was
emerging, Kodak still focused on the photographic print. This style of photography came
with the emergence of companies like Nikon, if consumers continued the use of conventional
films taking the advantages of digitization for editing was an alternative option for Kodak.
Strategic implementation was possible with the implementation with the external analysis
refers to the analysis of organization that cannot be controlled within a firm. Social analysis
was accepted from the concept of Eastman Kodak. It has valuable position in the competitive
market place that features over the needs and wants of the society. Kodak focused less on the
needs and wants of the customers. Kodak abandoned its non-imaging health related
businesses. This began to invest in digital imaging products for medical practices. Eastman
later recognized the guiding principles as mass production at low cost, extensive advertising,
customer focus and growth through continues research. Quality considering was lacking as an
important element for Kodak, which led decline in the strategy
1.4 What can other companies facing disruptive change in their core business (e.g.
Microsoft, Sony, and Walt Disney) learn from the experience of Eastman Kodak?
Report says, by the end of 30 September 2005, Eastman Kodak's revenues increased by 3%.
Film sales also reduce to 37% and 13% in single use camera. One of the reason for failure
was the paradox between logic and creativity in strategy. Kodak used a logical approach to
the production of sales of cameras and film. Kodak adapted a razor blade strategy.

Financially, it lacks focusing on the Price factor of the 7Ps. It sold camera at a very low cost.
The company was highly dependent on the profit from film, paid less attention to the
materials. Main competition was from the emergence of the Fuji films. Market share has an
affect by the introduction of the Fuji film. The new companies like Microsoft; Sony has
various scopes to learn from the strategic failure of the Kodak Company. Strategically
planning affects the growth of any industry. In order to develop with the advance technology,
companies should learn to grasp the use of the digital technology. Focus has to be enhanced
on the use of resources fully. Develop the idea of digital imaging with the change in the
notion of the consumers. An organization should focus on the marketing mix elements to
increase the productivity. Kodak focus only on the product factor, but companies should tend
to focus on the other elements. Any company learns that pricing factor determines the market
value. Focus on the quality of the product has to be emphasizing in the opinions of the
customers.
There are five stages of marketing strategy to be following by the companies to increase the
work efficiency. A definite goal has to be set up. This goal is to have global influence the
company’s reputation. Concentration should be on both global and local market shares.
Internally and externally, an organization should be educated about its own strength and
weakness. In the case of Kodak, George Fisher brought with him the decline in the reputation
of the company. Strategy is to be building up on the needs and wants of the customers. Focus
was lying only on the product. This led to a negative impact of the Company. Promotion for
Kodak Company was the brand name of the Company. However, its slow adaption of the
digital technology led to the decline in the company growth.
Competitors are a threat to any marketing organization. Fuji films serve as a competitor in the
market share of the organization (Grant, 2016). Disruptive changes suggest that companies
like Microsoft; Sony has to match up with the technological advances. These companies
should plan to work according to the requirement of the customers. With the use of the
definite marketing planning, the companies should collaborate with external organizations.
Marketing planning will ensure the companies that they posses clear vision of their
objectives. Depending on the crisis and need of the customers, digitalization has to be in the
core of the business. Digital technology is the want of the new generation. Price revenue has
to be increase to incorporate various devises within the firm.

Digital imaging was recognizing as a means of disruptive technology. For traditional
companies, it almost destroyed the future emergence of the brands. Nikon, Canon, Olympus
and Pentax serve the new technologies in their camera technology. The application of digital
technology was like death of the use of resources and capabilities. Companies like Nikon,
Canon and Sony has been features with microelectronics and software and engineering
capabilities. To meet with the advance technologies companies have to focus on the product
quality along with people and promotion and use of resources. Being as an isolated company,
Kodak was well in its productivity but the emergence of other companies increase the level of
competition.
Conclusion
Kodak has built its popularity and fame in the digital world in the recent era. The company
faced many challenges and a tough situation in the period of the 20th century, but it also took
up the challenges and proved to be an efficient company lately. Kodak influence
digitalization globally. Organizational management was lacking in Kodak. Proper planning
and vision was absent from the concept of the Kodak. Any organization should not only focus
with the product quality internally but external relations have to be involved. Understanding
the crisis of the society, any organization has to be met with the updated technologies. For
any firms, marketing strategy should focus on the 7Ps. Lately Kodak has applied the concept
of strategic intent to the technological development.

Reference
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