Case Presentation
Kodak Australasia
1
Group 6
Name
Suman Devi
Angelica Quintero
Hasan Ijaz
ID
104250
103612
106473
2
Company Overview
3
Company Overview…. Cont…
Founder :George Eastman
1880:Eastman established the
Eastman Dry Plate Company, at Rochester N.Y.
1912:Introduced Kodascope Projector
1960: Brought the Instamatic camera to the market
1970: Major sales growth for Kodak. Concentrates on
film and basic cameras
4
Company Overview….
Cont…
1917:Developed aerial cameras
1932: Introduced first 8-millimeter
motion picture system consisting of
films cameras and projectors
1935: 16-millimeter Kodachrome film
1953: formation of Eastman Chemical
Products
1958: Introduced Kodak Calvalcade,
first completely automatic
projector
5
Company Overview….
Cont…
1980: Fuji emerges as a serious competitor
1994: Kodak abandoned its non-imaging health-related
businesses began to invest in digital imaging products
for medical practice
1997: Kodak was a high-cost manufacturer with a
growing portfolio of digital products which was losing
hundreds of millions of dollars annually
1997: Restructuring that eliminated 19,000 jobs and cut
more than $1 billion from annual costs
6
Company Overview….
Cont…
2001: Kodak is pushing aggressively into China,
an important growth market
2004: Kodak announced that it would stop selling
traditional film cameras in Europe and North
America, and cut up to 15,000 jobs
January 2005: The Kodak EasyShare-One
Digital Camera, the world’s first Wi-Fi
consumer digital camera capable of sending
pictures by email, was unveiled
7
Company Overview….
Cont…
December 2010: Standard & Poor's removed
Kodak from its S&P 500 index
January 19, 2012: Kodak filed for Bankruptcy
Protection The company's stock was delisted from
NYSE and moved to OTC exchange. Following the
news it ended the day trading down 35% at $0.36 a
share
February 9, 2012: Kodak announces it will exit the
digital image capture business
8
Brand Logo Evolution
9
Kodak’s known Products
• Four distinct sub-products
–
–
–
–
Digital cameras
Home printing
Online services
Retail kiosks and mini-labs
10
Q1. Did Kodak face calm
waters or white-water
rapids environment?
11
White-water rapids metaphor
•The fact that circumstances are both
uncertain and dynamic
•As it is the case of the technology industry
12
External Factors Analysis
13
Porter’s 5 Forces: Digital Camera
High Competition,
Threat
of
Numbers
of digital
Threat
of
New
Technology,
know
technology
driven,
cameras
,trend
of
New
how,
Entrants
move economies
fast,
numbersof
digital
market
scales,
and
high
of players,
lower
price
suppliers
worldwide,
Entrants
investment
strategy.
China
base
Numbers of digital
cameras ,trend of
digital market
suppliers worldwide,
China base
o
Bargaining
Power of
Suppliers
Rivalry Among
Competing Firms in
Industry
Bargaining
Power of
Buyers
--
-
-
Few substitutions,
i.e. Mobile phone,
Camcorder,
Traditional
cameras
Threat of
Substitute
Products
o
-
--
Low Moderate High
14
Industry Driving Forces
• Rapid decline in demand for traditional
photography equipment in developed
economies
• Rapid growth in demand for digital cameras
in developed economies
• Steady decline in demand for film and photo
processing
• Development of new imaging technology
such as photo-enabled wireless telephones
and high-megapixel digital cameras
15
Internal Factors Analysis
16
SWOT Analysis
Strength
• Existing Brand equity
•Distribution Presence
•Competitive capabilities
• Market advantage
•Acquire many strategically
aligned companies
Opportunity
• Digital Image
• New alliances
•On line photo sharing and
storage
Weakness
•Rapidly decreasing sales
revenue
•EBITDA are very low
•Work force has been cut off
• Corporate Culture
Threat
•Competition in traditional
•Photo capable mobile phone
•Price sensitive
•Economic health
17
Q2: How would you
evaluate Kodak’s
handling of the forced
downsizing that it had to
implement ?
18
Expected Outcomes
Economic and Human Consequences:
• Enhanced efficiency and productivity within a firm
(to do more with less)
• Increased value for share- holders.
• lower expense ratios, increased return on investment,
higher profits and stock prices
• Remain competitive.
19
Actual Economic Outcomes
• No decrease in costs, in some cases
expenses actually increased
• Drops in Productivity
-Number of other costs
-Costs of quality as a result of increased
rework
-Overtime costs
20
Actual Human Outcomes
•
•
•
•
Employees loose their jobs
Heightened levels of stress
Job dissatisfaction
Loss of morale, distrust and drops in
productivity
21
Downsizing Results
Unsuccessful because:
• Poorly executed or not managed properly
• Inability to look beyond the traditional 3-C
approach (Command, Control, and
Compartmentalization)
22
Downsizing Results...
• Resistance to change,
resulting in loss of
productivity, efficiency,
and competitiveness
• Firm not well prepared
(employee resentment
and concern, loss of
morale, lack of
innovation and creation)
23
Q3: Eastman Kodak has
not closed down its
entire operations in
Australia.
24
It still employs over 1300
people and is now trying to
reinvent itself based on a
stronger focus on digital
technology and by
developing strategies
around online processing
and digital album services
25
How Kodak can stimulate
innovation in pursuing this
strategy?
Structural variables:
• Expanding digital imaging service
e.q. By expanding product & services. For
example Kiosks that could print image directly
from mobile phone.
• Develop their own range of digital cameras to
meet this new demand of the consumers
26
Kodak Stimulating
Innovation
Human resource variable:
• Training workforce
• Job security
• Encouraging creativity
Culturable variable:
• Tolerance of risk
• Tolerance of conflict of opinions
• Focus on end results.
27
Q4: What could other
organisations learn from
Kodak about change and
the need for innovation?
28
Five lessons from Kodak Case
1. External Appearances can be Deceiving:
• A business can already be underway before
anyone is aware of the fact.
• External measures of success(sales,
market share or profits) are all too often
misleading
• External indicators might look good, but
might get irrelevant over time
29
Five lessons from Kodak
Case
2. Shift Happens
• Enormous pressure on industries to keep up
and remain relevant
• Kodak underestimated the pace of change
in competitive environment
30
Five lessons from Kodak
Case
...Shift Happens
• Kodak’s failure to keep up with technological
advancements and the advent of digital age
• Relentless shifts in social appetites, economic
fluctuations, government regulation and market
forces cannot be ignored
31
Five lessons from Kodak
Case
3. Your Greatest Strength can be your
Weakness:
• Kodak’s very success and prosperity
prevented them to keep up as times changed
• It is easy to become a hostage of your own
success
• Businesses must not be attached to what
worked in the past at the expense of
embracing what will work in future
32
Five lessons from Kodak
Case
4. Innovation is not the perfect solution
• In Kodak’s case, innovation was far from
absent despite popular rhetoric
• Innovation in the wrong areas at the wrong time
that contributed to their downfall (purchasing
Sterling Drugs in 1988 and even producing
bathroom cleaners and medical-testing devices
in the early 1990s).
33
Five lessons from Kodak
Case
5. Its not all over till it is over:
• Discontinue unprofitable products
• Launch new and innovative product
• Focus on high potential products
– Kodak’s focus on Kiosks and mini-lab
– Online services such as photo printing and sharing
• Emphasize on niche market
34
Q 5 It is expected that 1.3
billion camera phones
will be sold worldwide by
2012, and that the basic
digital camera will
disappear, in particular at
the lower end of the
market.
35
What are the implications
of this for digital camera
manufacturers?
36
The low-end of high-end
camera business
• Low end of digital camera is on decline
• Given rise to low end of high end camera
sales(mirror less slr)
• People are buying more slrs(single-lens
reflex) then ever before Cheaper versions
of the digital SLR subset
• Switching consumer to high end market
obstructing smart phone cameras to
compete
37
How are digital camera
producers such s Kodak,
Canon, Olympus and
Sony placed to deal with
this?
38
Digital Manufacturers
Technique
• Digital Camera manufactures are dealing with
the situation fairly well by offering high end
camera at cheaper rates .
• Considering consumer behavior in mind more
photos are being taken then ever before & more
people are pursuing photography as their hobby
than ever before.
39
How is this similar to or
different from the
situation Kodak found
itself in with the
emergence of digital
photo technology?
40
This time situation is different from
what Kodak found itself because
technology for imaging has not
change….. Is just more competitive
(unlike Kodak's case)
41
Discussion Question.
New rules for running business? A
Silent Revolution
42
“How do dominant
companies lose their
position? Two-thirds
of the time, they
pick the wrong
competitor to
worry about.”
—Don Listwin,
CEO,
Openwave Systems/WSJ
43
Kodak …. Fuji
GM …. Ford
Ford …. GM
IBM …. Siemens,
Fujitsu
Sears …. Kmart
Xerox …. Kodak, IBM
44
The Power of Chaos!!!
45
This history ought to be humbling to fans of
modern management methods. Careful
planning and thorough analysis, those
business school basics, may have their
place, but they provide little guidance in the
face of disruptive changes that alter an
industry’s very fundamentals.” —Marc Levinson, FT,
0425.06 (author of The Box: How the Shipping Container Made the World
Smaller and the World Economy Bigger)
46
“It is not the
strongest of the
species that survives,
nor the most
intelligent, but the
one most responsive
to change.” —Charles Darwin
47
Thank you
48
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