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A New Strategy for Kodak Essay

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Updated: Dec 24th, 2019

Eastman Kodak has faced numerous challenges in the market that almost saw it exit out of an industry it once dominated. Kodak was the leading player in the industry before it was upset from the position by Fujifilm.

According to Sadler and Craig (2003), “As late as 1976, Kodak commanded 90% of film sales and 85% of camera sales in the United States and in the Global Market.” however, this started changing in the 1980s and 1990s when the firm was overtaken by Fujifilm due to its inability to embrace the emerging technologies.

The firm’s key objectives have been geared towards reclaiming the lost glory. The following are some of the specific objectives of the Eastman Kodak that defines its operational strategies in the current market.

  • To use the recent technological invention in order to boost its operational strategies in the local and international markets.
  • To align its financial strategies in order to reflect the current focus of the firm in research and development.
  • To boost the financial resources of this firm through effective marketing strategies of the existing products of this firm.
  • To source for highly qualified human resource that will be able to participate in the firm’s revolutionary strategies towards embracing technology.
  • To encourage human resource to use their knowledge, skills, and talents in order to enhance innovation at this firm.

The management of this firm has come to realize the importance of diversification and embracing the emerging technologies. It has shown strong interests in the cloud service industry. Each of the above objectives plays an important role in ensuring that the firm is successful in cloud computing industry. Using the recent technologies to enhance its operation is the first step of being successful in the cloud industry.

The objectives of investing more resources on research will enable this firm understand some of the fundamental aspects of the cloud service industry. It will also be important for the firm to strengthen its financial resources in order to meet its financial costs as it makes an entry into a new market.

Having a highly qualified staff will enable the management to come up with products that will meet the needs of its customers in this new market. Motivating the employees to be innovative will be important in coming up with new superior products in the market. If realized, these objectives will ensure that Eastman Kodak remains successful in the market.

Kodak’s Horizontal and Vertical Integration Strategy

In order to succeed in the cloud service industry, the management of Kodak must come up with effective strategies that will be able to address the problem of market competition. Both horizontal and vertical integration strategies may be appropriate in managing the market competition in order to achieve success. In its horizontal integration strategy, Kodak will need to identify some of the leading competitors in this market.

In order to manage the negative effects of market competition, sometimes it may be good for the competitors to form an alliance in order to face the challenges as a single stronger unit. The management will need to team up with a selected number of competitors in the market.

The choice of the partners should be made wisely. The partners must have qualities that Kodak lacks in order to make the union successful. Each of the partners will need to offer something that is unique and desirable in order to make the partnership more successful.

The management of Eastman Kodak may also consider a vertical strategy that integrates the firms in the supply chain. According to Hill and Jones (2013), this strategy is always necessary in eliminating the middlemen who may try to exploit the firm when supplying raw materials or buying the products of the firm.

The strategy will help Kodak to minimize the power of the suppliers and buyers by having the control of the entire supply chain. This will enhance chances of its success in the new industry.

Pursuing a Multi-business Model Based on Diversification

The decision of Eastman Kodak to diversify its product delivery through a multi-business model is a clear indication of the firm’s strategy to increase its profitability in the market.

The firm is keen on ensuring that it achieves success in the market in order to recover from the challenges it faced from the late 1990s to 2012. The following are some of the ways through which Kodak will increase its profitability using this multi-business model.

  • The model increases the amount of products that Kodak avails to the market. The increased products will increase its sales, which in turn, would lead to increased profitability.
  • The multi-business model will help Kodak expand its market share both locally and internationally. The market share taken by the competitors in one industry is compensated by the profits made in the other industries.
  • This model helps the firm to reduce the power of its competitors. The profits earned from one industry can be used to expand the operations of the struggling industry. This would help in boosting the overall success of the firm.
  • According to Amit and Zott (2012), multi-business model is always important in spreading the risks within a firm. When one industry is affected by the external forces which are beyond the capacity of the firm, success in the operations of the firm in other industries can be used to compensate the losses.
  • This model also expands the knowledge and experience of the firm on how to deal with the market forces. The knowledge learned from one industry can be used to boost the operations of the other industries. This would increase the profitability of the firm.

It would be important to identify cases where firms have used this model in the past successfully. A good example is the General Electric, a leading electrical firm in the world. The firm co-owns NBC Universal in the communication industry.

The firm has also invested into the financial industry with a massive success. Another example is Samsung. The firm has diversified its products, and is currently making a move towards the cloud computing industry that is dominated by Apple Inc.

Implementation Strategy for Eastman Kodak

At this stage, it is important to suggest a strategy that Eastman Kodak can use to implement its strategy to operate in the cloud computing industry. The firm should consider acquisitions in order to expand its strength in the market. By acquiring some of the successful upcoming firms in this industry, the firm will be spared on the cost of starting from a scratch in this competitive industry (Coulson, 2013).

The strategy will not interfere with Kodak’s current organizational design because it will have a full control of the new unit. It is also a fact that this approach will give Kodak full control of the strategic systems. The management will also define the structure of the acquired firm. It is always recommended to allow the new firm to operate independently without interference, but with some guidance from the parent firm.

This approach will also be important in protecting the type of the organizational culture practiced at this firm (Kashmanian, Wells & Keenan, 2011). The new firm will be allowed to operate in a manner that would yield the best success, and for this reason, none of the two firms will need to adjust its organizational culture in a way that may upset their operations.

Ethical Business Behaviors

The vertical integration strategy mentioned in section two of this report will help this firm to maintain ethical behavior in the market. The strategy will give Kodak control over the entire supply chain, eliminating the temptations to bribe some of the parties in the chain to get their favor. Acquisition strategy suggested in the section above will also promote ethics in the firm.

It eliminates cases of internal rivalry or intimidations which is always common in cases of joint ventures (Mellat-Parast, 2013). Corporate social responsibility is important in endearing a firm to the public. It is one of the best ways of marketing which makes the customers realize how the firm cares for them.

This strategy helps in promoting the popularity of a firm’s products in the market. Environmental sustainability activities and ethical practices are parts of corporate social responsibility that help in the promotion of a firm’s brand and products in the market.

References

Amit, R., & Zott, C. (2012). Creating value through business model innovation. MIT Sloan Management Review, 53(3), 41-49.

Coulson, C. (2013). Implementing strategies and policies. Strategic Direction, 29(3), 33-35.

Hill, C., & Jones, G. R. (2013). Strategic management: An integrated approach. Independence: Cengage.

Kashmanian, R. M., Wells, R. P., & Keenan, C. (2011). Corporate environmental sustainability strategy. The Journal of Corporate Citizenship, 44(1), 107-130.

Mellat-Parast, M. (2013). Supply chain quality management: An inter-organizational learning perspective”. International Journal of Quality & Reliability Management, 30(5), 511-529.

Sadler, P., & Craig, J. C. (2003). Strategic management. London: Kogan Page.

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