Case Strategic Analysis on Eastman Kodak



Case Strategic Analysis on Eastman Kodak

Introduction

This paper intends to analyze the case on Eastman Kodak. Eastman Kodak Company was incorporated in New Jersey on October 24, 1901. From the beginning, Kodak targeted on four main goals for the development of its business; huge development with lower development costs, keeping the lead in technical improvements, extensive product promotion, and the development of a worldwide company to make use of the world market. But now the company is facing a situation of a 74 percent drop in first-quarter earnings with a 9 percent decline in sales. No growth in sales for 2002 is sighted and Kodak's stock had dropped by 10 percent (www.google.com/finance).

Discussion

The Kodak Industry Environment

In the Seventies, Kodak started to face a competitive atmosphere in all its product marketplaces. The Biggest problem was observed in the large market from which Kodak used to earn 75 percent of its income. The market was hampered by increasing competitors from Japanese companies, led by Fuji Picture Movie Company. Fuji spent in huge, low-cost developing cameras, using the most advanced technology to mass-produce film in large amount. Fuji's low development costs and aggressive pricing reduced Kodak's revenue edge.

Besides many market competitors, another liability for Kodak was that it had done little internal research to enhance efficiency to deal with increasing costs. Kodak was also experiencing competitors on other product ranges. Its digital cameras had advantages because of their convenience of use as in contrast to complicated 'negatives single-lens response designs'. They were also affordable. However, the quality of their printing could not evaluate with those of 35-mm photographic cameras (www.kodak.com).

The photo industry around Kodak had modified itself considerably. Competitors had improved in all product areas, and Kodak, while still the biggest manufacturer, confronted with increased risks to its success as ...