Eastman Kodak - Changeover

Topics: Camera, Eastman Kodak, George Eastman Pages: 9 (2664 words) Published: January 17, 2013
1.0 Introduction
This discussion looks in to firm's response to challenges they face from transformation and evolution of technology that subsequently threatens their traditional, successful business. A case study of Kodak is been given as an example because Kodak has gone through a transition phase in a period between 1980's to 1990's , due to introduction of new technology in the field of photography specially digital photography. Kodak was the only one that developed many of the components of digital photography, yet the new form of photographic technology has had a serious, unconstructive impact on the firm business.

2.0 The need for the "change"
George Eastman Kodak Company developed the first snapshot camera in 1888.In 1889, Eastman and his chemist perfected the transparent roll of film, made it possible for the development of Thomas Edison's motion picture camera. From 1880's Kodak invested heavily in film and when colour photography was introduced, it was one of the few companies that had the knowledge and processes to succeed. The company achieved $1 billion in sales in 1962 (Gavetti et al., 2004). By 1976, Kodak captured the majority of the US film and camera market (90% and 85%, respectively). Kodak's photofinishing process quickly became the industry standard for quality (Gavetti et al., 2004). Kodak had always got distinctive competency over its competitors because of the scope and operations of its business. This helped the Kodak towards the continues growth of their business for more then 90 years. But from the period 1980's-1990's Kodak encountered problems of market share, revenues, competitors and technological explosion which was rapidly threatening the survival of their business. Kodak began to realize that radical changes in the structure of the company and the technology of their products would be vital toward success of the Kodak brand. Following are some factors that motivated Kodak to change its organisational structure for the survival of their business.

2.1 Competition from other brands
During the long history of the Kodak Company, Kodak has overcome many threats to the survival of their business. Highly successful business that turned Kodak into one of the most recognizable name brands in the world was struggling for survival with the entrance of competitors in market. The Japanese company Fuji Corporation entered the market attained a high market share not only in Japan, but in the United States as well. Fuji and other Japanese companies were able to design paper used for printing film at much cheaper rates than Kodak could offer to their consumers. This became a large problem for Kodak because they were unable to get an edge on their competition and get a part of that market share. Also with the amount of competition rising in the market for photographic products, Kodak had to take a cut in their revenue and lower the prices of their products to remain competitive with rivals 2.2 Technological advancement

According to Christensen (1997), survival of many large organizations is seen to depend on how well they are able to negotiate the technological currents in their environments. Technological advancement is caused by improvement in communication and new designing capabilities with an organization. Kodak's status as an iconic brand was threatened by the technological shift away from its vastly successful business of traditional film and film processing. The photography industry was changing from a traditional industry to a much more technically advanced industry. This expansion in the field of technology for the photograph equipment industry opens the door for other industries (computer industry, software, printers, etc.) to step in and broaden their product line and offers huge potential for market growth 2.3 Problem in expanding the product

Kodak also ran into problems when they expanded its core photographic products business. Fierce competition from companies such as IBM, Apple...
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