1. Kodak It’s time for you and Kodak
BUS3005-University of Northampton
Strategic Management
7 key step Strategic formulation process (case study: Kodak)
Presented by: Diogo Machado
Evshan Haka
Ekatarina Kharchenko
Sukhy Kaur

2. Eastman Kodak Introduction
Kodak is a multinational company that substantially focuses on the development of image technology. Thus, the first simple camera was invented and widely recognised around the world by George Eastman in Kodak is best known for photographic film products. During most of the 20th century Kodak held a dominant position in photographic film, and in 1976, had a 90% market share of photographic film sales in the United States.
“You Press the Button, We Do the Rest”
(advertising slogan coined by George Eastman)
Eastman believed in making photography available to the world, and making it possible for anyone who had the desire to take great pictures.
“Kodak Moment”
(A personal event that demand to be recorded)
After the first camera was introduced it was easy in use. Kodak was recognized in every country around the world therefore the use of image technology changed how people and businesses communicated.

3. Industry Analysis Timeline Some Important facts
In 1895, the first Pocket camera was introduced, at the value of $5.
In 1900 Kodak introduce the Brownie Camera, for $1, creating a mass market and direct creating new customers. (amateur Photographers).
In 1930 Kodak enter in to the stock market, Dow Jones Industrial average index, and remained for the next 74 years, until 2004.
In 1935, Kodak introduce the Kodak chrome, Color Film.
In Kodak, Brunches out to Manufacture HAND GRANADES. (outside of their specialty scope)
In 1970 Kodak, invented the continuous wave dye laser, technology which still in usage in many industries, but not Kodak.
In 1975, an Electrical engineer at Kodak invented the Digital camera ( Dropping it for fear of cannibalism)
By 1976, 90% of the photographic film sold were from Kodak as well as 85% of the cameras.
At the beginning of Kodak’s business the strategy as well as drivers of profitability was simply to sell cameras cheaply and make a huge profit margins on the consumables, the films.

4. Industry Analysis Timeline Some Important facts
In 1980, a serious competitor enter in the US market from Japan FUJI FILM, in 1984 Kodak was offered to be the official film sponsors for the Los Angeles Olympic games, but pass on the offer, FUJI won the sponsorship, and open a film plant in the U.S.
In 1986 Kodak create the first mega pixel sensor (5”x7” resolution).
In 1994 Apple releases the first ever consumer digital camera, it was manufactured by Kodak.
In 1997 Kodak realized that the film business is no longer relevant in a world where people do not use the films anymore but instead mobile phones that have virtually unlimited shooting at no cost.
In 2004 Kodak announced that it would stop selling traditional film cameras in Europe and north America VS
Kodak began to struggle financially in the late 1990s as a result of the decline in sales of photographic film and its slowness in transitioning to digital photography, despite having invented the core technology used in current digital cameras.
But still the main strengths were chemical processes associated with the manufacture of rolled films. That was one of the biggest drivers of profitability but yet before the profound change.

5. Industry Analysis Timeline Some Important facts
Consequently in 2007 Kodak started to sell some of its patents and group divisions such as Kodak health group, light management, and start to licence some of its competitors to produce under the Kodak name.
After 78 years trading in New York Stock Exchange, Kodak received a warning from them, saying that if the share prices didn’t improve, they would be delisted. In 19th of January Kodak filed for bankruptcy protection. And was delisted, and started Over the count trading.
One of the biggest challenges of the industries which Kodak operates is: It’s a high end technology, and usually its products have short life cycle, therefore high percentage of the company revenue has to be re-invested in R&D.

6. Industry Analysis Timeline Some Important facts
The main purpose of this presentation is to explore some of the challenges that Kodak faced, and how poor strategy decision making led one of the most worldwide known company and leader of its market to loose its space.

7. The Internal Analysis Who were Kodak's main competitors:
All company logos are under copy right protection©

8. Internal Analysis
Kodak’ competitors scene, is well diversified, as it reflects it’s vast range of products and services.
Example: Consumer photography, Professional products: Films, Chemistry, papers, Digital Products, Graphic communication products, Business and government products, Medical imaging products and etc.
- Century-long experience in the traditional photography business
- Household brand name
- Highly valuable brand equity
- International presence
- Strong distribution channels
- Huge financial resources
- Core rigidities ingrained in the company
- Company culture hindering strategic changes
- Inability to translate innovation into marketable products
- Lack of digital culture and expertise
- Inability to integrate acquisitions
- High growth in digital imaging demand (products and services)
- Emerging markets are ripe for Kodak’s existing product portfolio
-Industry saturating with new entrants and incumbents
- Shrinking profit margins in the digital SBU’s
- Consumers’ progressive abandon of analogue photographic solutions

9. Internal Analysis Eastman Kodak Fuji Film
80’s Kodak, takes home market for granted.
Kodak, Invest on R&D achieve customer loyalty.
Difficult to enter in the Japanese Market
1995, 44% of Global Market.
1999, Takes time to respond to digital revolution, produces, under Nikon name and only 2004 under Kodak name.
Let product enter the market instead of strategy.
2014, Overman, chief marketing office said “I will tell you that Kodak will spend $100 million on R&D this year in a tightly focused way on our strategic growth opportunities,”
80’s, Explore new markets, competitive advantage, enter in American market.
Fuji, uses price war, offering cheap alternative to customers.
Easy accesses to American market.
1995, 33% Global Market, by 2001 Fuji overtakes Kodak
1998, first Commercial amateur digital camera, showing quick response to changes in market direction, specially in Asia
Aggressive market penetration strategy
2014 FUJIFILM Holdings Research and Development Expense for the last quarter of the year $342.80M

10. Internal Analysis Kodak’s main direct competitor, is Fuji Film.
Rolled Film and Single Use Camera Unit Volume Sales Trends (% change)
51 Source: AC Nielsen and Citigroup Investment Research

11. Generic strategy cont....
what have the other players done in the industry?
Kodak greatest competitor has been Fuji
Multiple competitors(Canon, Nikon, Sony, Olympus)became proactive in all segments in the imaging industry such as rolled films ,traditional photography ,digital photography, traditional printing and digital printing
The new era disruptive innovation technology emerged
Slow transition from roll film into digital camera market overtaken by Sony and Canon
New entrants included Apple Computer, Canon, Casio, Chinon, Epson, Fuji, Hewlett-Packard, Minolta, Nikon, Olympus, Panasonic, Sony, Toshiba, and others began to introduce digital cameras to consumer market
Threat of new entrants became reality sooner than originally estimated by Kodak and consumer adaption to new technology was also fast and replaced traditional photography sooner than predicted but then again in digital camera market started its decline as new tech has emerged :120 million mobile phone cameras were in use just in US alone
The new era disruptive innovation technology emerged created new markets over the last decade –mobile phones ,digital image printing etc. and all this drastic changes eventually disrupted the excising markets and earlier technology became outdated
Kodak had been slow in its transition despite the fact they are the inventors of digital imaging and the first mega pixel camera was developed in their research labs as they couldn't fully assimilate the fact that film business is over. They fail to see the business opportunity in digital cameras and concentrated on scanners
In 2001 Dan carp took control and tried to revive the image of Kodak by pushing into digital cameras but market was crowded with new players
Companies like Canon and Sony were big and admired brands by the consumer already and Kodak couldn't compete

12. Generic Strategies Kodak Fuji US market leader70% World share 40%
What have been the other players doing in the industry? Kodak vs Fuji in the 90’s
Kodak
Fuji
US market leader70%
World share %
Japan share %
Japan market leader 70%
World share %
USA share %

13. Porter’s Generic Strategies
Kodak digital photo printer
Strategy adopted, before Fuji enter in the American market
Re-apply the strategy after digital cameras boom
Also applied in its home user printers
Single Use Cameras
Healthcare imaging (diagnostic equipment).
Consumer Printers.

14. Objectives
Eastman Kodak Company has change completely its strategy. Kodak is aiming to change the competitive playing field by selling most of its patents and business divisions.
Today, it develops, manufactures and markets imaging products for businesses. The Company provides disruptive technologies and imaging solutions in the product goods packaging, functional and digital printing markets. Eastman Kodak also offers products and services in Entertainment Imaging and Commercial Films.
Kodak has continued to cut costs in the form of businesses, facilities and employees. The company closed camera business and sold an online photo service.
Kodak took its name away from the theater that hosts Academic Awards each year.
“The company will emerge with about 8,500 employees, compare to 145,000 it had in its peak in the 1980s” (Kodak is reborn, accessed 2015).

15. Objectives
Kodak innovate a special product ultra-fast commercial inkjet printer, the Prosper Press, launched in It boosted printing speed and image quality as well as decreased prices for consumers to print in compare to offset printing. Thus gaining competitive advantage.
Kodak continues to invest in technologies for offset printing. Also new processes that reduce costs and environmental impact.
Kodak’s printing technology impacted the growth in packaging industry, thus Kodak technology make it easier to print high-resolution images on everything from cupboard to plastic.
Kodak is aiming on innovating a cheaper touch screen for smartphones and tablets. Thus, using printing capabilities to lay out incredibly thin lines of metals.

16. Means and Methods
After filed for chapter 11 bankruptcy protection in the United States in January 2012, Kodak, had to make many decisions to save the future of the company, so they had to downsize in order to re organize the company's future:
In February 2012, Kodak announced that it would cease making digital cameras, pocket video cameras and digital picture frames and focus on the corporate digital imaging market.
In January 2013, the Court approved financing for the company to emerge from bankruptcy by mid-2013
Kodak sold many of its patents for approximately $525,000,000 to a group of companies (including Apple, Google, Facebook, Amazon, Microsoft, Samsung, Adobe Systems and HTC) under the name Intellectual Ventures and RPX Corporation.
ORGANIC or INORGANIC?
Inorganic strategy growth :Kodak began aggressively acquiring firms for the purpose of obtaining and broadening new competences in order to overcome the increased competition.
After numerous unsuccessful acquisitions and botched joint ventures, it is clear that the company has trouble integrating its acquisitions in its different SBU's and has even more trouble working with others.

17. Means and Methods
Part of Kodak's restructuring has been a move away from manufacturing all of its products by itself. The company now focuses on what it does best and looks for partners to help with the rest.
To save the brand reputation, Kodak carefully choses it’s licensed products partners, using different requirements and strategies in different markets.

18. Global factors
In the past two decades, changes in the industry environment, the appearance of new technology had a huge impact on Kodak strategies: Porter’s 5 forces can be used to illustrate Kodak scenario, in the Film and cameras industry.
Threat of new entrants
Due to High R&D expenditure and high distribution costs it make this industry difficult to new entrants, but attractive to other technology giants: SONY, HP, Canon, Nikon etc.
Bargain Power of Supplier
Bargain Power of Buyers
Shortage in Primary materials used in the manufacture of rolled film, lead to more expensive product.
Rivalry among existent competitors
Wide range of new products and brands, gives choice to buyers, leading to price wars as well as decrease on market share. VS
Threat of Substitute
The fast advent of digital technologies:
Digital Cameras then Mobile cameras phones, made Kodak’s main product obsolete.

19. Global factors What competitors did.
The market for digital photography is estimated at USD 82.6 billion by the year 2016, registering a growth of 5.9% annually, main reason to attract competitors.
Fuji enter the U.S market, in quickly was accepted, by customers offering cheaper alternative products, on the other hand, Kodak struggle to enter on the Japanese market, as Fuji Film has hundreds of exclusive deals with photo labs, and retailers as well as help from the Japanese government who backed Fuji distribution system, to prevent Kodak to gain market share.
Sony and Canon had a quick response to changes on consumers behave, and adopt the digital camera revolution, those two combine, had over 50% of the market share on digital cameras, from 2003 to 2007.
When cameras started to be a basic feature on mobile phones, Sony quickly sign contracts with major mobile phone producers to manufacture their cameras, including Apple’s iPhone
The shifting to digital cameras, and memory cards, made Kodak film roll sales to decrease to a certain point that became irrelevant to the company revenue, forcing them to stop producing Kodachrome film at the end of 2009.(it was produced for over 70 years)

20. Kodak internal Weakness:
Global factors
Which merger or acquisition would, have completely changed the scenario?
If Kodak have ever merged with one of its big competitors, for example Fuji, They would have over 87% of the market in the U.S and in Japan, making it a monopoly case, and over 60% worldwide. Also they would have enjoyed shared R&D, meaning less expenses, better distribution channels, and control of the market, making the industry less attractive to new entrants.
Slow reaction to respond to the change in market
Ridged Culture: Kodak was so deeply ingrained in it’s main product, that they didn’t see anything else other than Film Roll production.
Even when a business strategy is formulated and agreed, there are often differences on how best to implement strategic change.
Kodak internal Weakness:

21. What is the winning move?
Some Issues
Response
Competitive market: Easy access to market, also to non-traditional competitors i.e. Sony, Casio and HP, as well as new entrants from Chinese market.
Kodak has spent the past decade attempting to adapt to the changing times, often creating innovative new products, but failing to turn them into a sustainable business.
In the past, Kodak acquired to many companies, and had problem on integrate them functionally to their business.
Diversification: the company operated in too many different businesses, which lead in a decrease of it’s market share.
Kodak past still hutting them, having current issues with U.S. government related to chemical environmental pollution.
Heavy investment in developing new products and services, as part of strategy to re-gain it’s image as to retain and attract new customers.
“Kodak remains one of the world’s most trusted and recognized brands, and that is a great starting place. A way to renew that trust is by innovating, and we have the intellectual property to do that”. (Overman, CMO, 2014)
Trust in the brand value, will help Kodak to retain existent customers, and attract new ones.
Sold most of it’s acquisitions, and licensed it’s products.
Focus in what they do best, (R&D in image technology)

22. Conclusion “The only thing in life that is constant is change”
– François de la Rochefoucauld
Even the most innovative and technologic advanced companies, should give as much attention to external factors and strategic management as the attention they give to R&D, because even the best products and services, need a well developed strategy to be implemented in the market.
Does not matter how well known is the company Brand Recognition, poor decision making, can take a market leader like Kodak to the verge of bankruptcy.
Core Rigidness deeply rooted in the company, made evolution very painful and Hectic.
Only the ones who quick respond to the new demands can survive, Kodak learn it in the hard way.

23. List of References:
Anon., [Online] Available at: [Accessed 23rd January 2015].
Company, E. K., [Online] Available at: [Accessed February 2015].
Fespa, [Online] Available at: [Accessed 20 February 2015].
Gerry Johnson, R. W. K. S., Exploring strategy. Ninth ed. Harlow: Pearson Education Limited.

24. List of References:
Kodak vs. Fuji the battle for global market (2000) Thomas C. Finnerty.
Mendes, G., n.d. What went wrong at Eastman Kodak?, s.l.: The Strategy Thank.
available at: [Accessed 23 January 2015].
socsyc, [Online] Available at: [Accessed 23 January 2015].
WEISSMANN, J., [Online] Available at: [Accessed 23 January 2015].