Eastman Kodak

Topics: Generally Accepted Accounting Principles, Eastman Kodak, Kodak Pages: 9 (2198 words) Published: April 12, 2013
Case 9
Eastman Kodak

1. The history, development, and growth of the company over time.

In 1880, after inventing and patenting a dry-plate formula and a machine for preparing large numbers of plates, George Eastman founded the Eastman Kodak Company. By 1884 Kodak had become a household name after he replaced glass photo graphic plates with a roll of film that Eastman believed was successful because it was a user-friendly product that would be “as convenient as the pencil”, emphasized by the first marketing campaign that used the slogan; “You press the button, and we do the rest”. Eastman later identified Kodak’s guiding principles as; mass production at low cost, international distribution, extensive advertising, customer focus, and growth through continuous research. He also expressed Kodak’s competitive philosophy; “Nothing is more important than the value of our name and the quality it stands for. We must make quality our fighting argument.” With the arrival of color technology, the success story continued as the company invested heavily in R&D and by 1963 Kodak had become the industry standard. Sales topped US$1billion by launching into new product lines such as cameras, medical imaging, and graphical arts. The business quickly rose to US$10 billion by 1981. Today, the Eastman Kodak’s principal activities are based on the development, manufacturing, marketing of consumer, professional, health and other imaging products and services. The company operates through three segments: The Digital & Film Imaging segment which provides consumer oriented traditional and digital products and photographic services such as film, photo finishing services, and supplies and digital cameras. The Health Group segment provides matching products that include medical films, chemicals and processing equipment, and services and digital products including PACs, RIS, digital x-ray and output hardware supplies. The Graphic Communications segment provides inkjet printers, high speed production document scanners, digital imaging systems, and products aimed at the commercial print market. The growth of the company has started with switching from traditional film to digital, entering new markets, earnings growth which increases profits and productivity and cuts costs and dividends, and receiving a $2-3 billion gaining strategy and acquired at least six leading companies in several industries.

2. The identification of the company’s internal strengths and weaknesses.

Internal strengths include Kodak Brand Name which is their biggest strength and their slogan which is “Kodak moment.” Kodak Image is environmentally and socially careful. Website is in great detail of product features and uses. Internal weaknesses include no E-Commerce, being innovative with IT, gathering without profitability by expanding just for the sake of growth, and product offering which needs to narrow their focus.

3. The nature of the external environment surrounding the company.

Threats of new entrants: In recent years, the growing demand of digital cameras has been attracting many new consumers. The threats of new entrants are always an issue when dealing with new technology. New technology is developed by an individual looking for a better way to do something. These companies are expected to alter the Kodak Company's structure with their technology, scale of operations, and brand power. With Xerox, Hewlett-Packard, Lexmark, Sony, Cannon and other major companies has already established in the market, it will be easy for new companies to enter the market and make an impact. Bargaining power of customers: In the camera industry, the bargaining power of customer is limited. Eastman Kodak is entering the consumer printer market which is full of competitors who produce products that allow the consumer to have buying power. From the sale of replacement cartridges, most producers rely on their profit margins. The buyers have a lot of power, with the...
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