Kodak: Business Analysis

Abstract

The research report highlights the dynamics of Photography and Digital Imaging Industry. The research will focus on the pros and cons of the industry. The report provides strategies and recommendations for future growth of Kodak.

Kodak: Business Analysis

Introduction

Eastman Kodak Company produces and markets a variety of professional and consumer imaging products. Kodak's products include digital cameras and accessories, inkjet printers, prepress equipment and consumables, scanners, and photographic films. The company also offers online imaging and wholesale photofinishing services. Kodak operates in, Europe, Africa; Middle East, Asia pacific, and the Americas. The products of the company are marketed under the umbrella brand name of Kodak (Datamonitor, 2011).

The company reports its operations primarily under 3 segments, including FPEG (Film photofinishing and entertainment group), GCG (graphic communications group), and CDG (consumer digital imaging group).

Pros of the Business and Industry

Growth Prospects in the Asia-Pacific Region

Kodak has taken steps to expand into Asia-pacific markets. The company also enjoys strong brand loyalty in the Asian region. The Asian region adds around 34.8% to the global market of photographic products in terms of revenue, as per Datamonitor estimates. Considering the rising per capita income of the Asian markets and optimistic GDP growth rate, the market has huge growth prospective for Kodak. Kodak has already expanded into Indian market. The Indian region is a strong platform for additional growth into other Asian countries. Apart from Indian region, the company has also taken additional steps to enter into other Asian markets. This shows that Asian is a great opportunity for this Industry. The industry players should focus on Asian region in order to improve the chances of survival and achieve longevity.

Rise in Demand for Digital Cameras

The digital camera market is forecast at a steady rate in the near future. According to industry estimates, the total consignments of digital cameras achieved 120.5 million units in 2010, representing an increase of 14.7%, compared to 2009. In 2011, the total shipment of digital cameras is forecasted to reach 130 million units, a YoY growth of 7.7%. In addition, shipments of digital SLR cameras are forecast to reach 15.5 million units with a year-on-year increase of 20.2% in 2011. Kodak has been one of the pioneers in the photography and filming technology and is recognized worldwide for its earlier innovations in these two fields. The company is well positioned to seize this opportunity for growth in digital cameras and expand its presence (Datamonitor, 2011).

Cons of the Business and Industry

Intense Competition at Multiple Levels of Business

The photographing and digit equipment markets are very competitive and the profit margins are very low in the industry. As a result, Kodak is facing high pressure on its pricing ability to compete with other global players such as Sony, Nikon, Canon and Fujifilm. In previous years, the competition for digital cameras and film cameras has been very intense as many firms have aggressively cut prices. This situation has resulted into low profit margins in the industry. The companies also face competition from printer manufacturers, consumer electronics and ...