Kodak case

Résumé du document

According to LEWI theory of narrative lifecycle, Kodak has reached the stage of "myth time". Hence, the firm has to focus on certain issues like developing eternal values, involvement in the society, internationalizing the brand and rejuvenating the brand.

Today, due to its weak brand image, consumers don't perceive Kodak as a digital brand and they only think of it as a film making company.

Kodak has taken too much time to enter the digital market, so it is left far behind the competitors such as Sony and Olympus (Kodak only accounted for 13% shares of the digital camera market in 2002). As there are structural differences between the film manufacturing industry and the digital camera industry, since the film manufacturing industry is declining, Kodak will have to consider the following trends.

Extraits

[...] Kodak decided to diversify its business and enter non relevant markets such as chemical and blood analyzers. This was one of the mains reasons for its late entry into the digital camera market. Moreover, the fear of changes led to a decrease in employees' commitment towards the organization and to a lack of communication between the base and the top executives. For example, in 1991, the invention team of the Photo CD system wanted to target the professionals but the top management decided to make it a mass consumption product, which led to an industrial mistake. [...]

[...] It would be a mistake to give up such an important source of revenues. 2nd strategy: evolution: a gradual shift from the traditional photography to the digital industry As the film industry is expected to decline, Kodak needs to focus on the digital industry to find a new source of revenue. Kodak intended to do so in two ways, but both failed: the separate organization units' strategy (in 1994, Fischer separated digital from silver-halide operations), and the top- down organizational change strategy (Fisher was able to change the culture at the very top but was not understood by the middle managers). [...]

[...] Finally, this strategy is not a panacea, because it is not sure that R&D will come out with a profitable innovation. To conclude, the choice that would fit the best to the firm would be to gradually give up its core business and focus on the digital world. It is the only way to remain competitive and to regain leadership in the industry. Appendix 1 SWOT Appendix forces of Porter applied to the digital industry Bargaining power of buyers Many competitors, fragmented market. Buyers, individuals as well as professional can't put any pressure on the companies. [...]

[...] Kodak case I. Identify the key issues Myth time: rejuvenate the brand According to LEWI theory of narrative lifecycle, Kodak has reached the stage of “myth time”. Hence, the firm has to focus on certain issues like developing eternal values, involvement in the society, internationalizing the brand and rejuvenating the brand. Today, due to its weak brand image, consumers don't perceive Kodak as a digital brand and they only think of it as a film making company. From the film manufacturing industry to the digital industry Kodak has taken too much time to enter the digital market, so it is left far behind the competitors such as Sony and Olympus (Kodak only accounted for 13% shares of the digital camera market in 2002). [...]

[...] Recommendations We decide to choose the second strategy. Kodak's main goal is to become a leader in 2 or 3 of the 5 segments in the digital imaging industry using the bottom-up strategy. To achieve this, Kodak needs to emphasize on developing its minilabs' network (it currently owns only 100 minilabs whereas Fuji has 5000). In addition, Kodak should pursue and intensify its efforts on the specialty printing paper niche as the EBIT margins touch 25%. Finally, Kodak should develop and strengthen its presence in emerging countries, because there are huge potentials to grow (as they did in China). [...]