1.Diagnosis of the reasons for Kodak's market share loss and assessment of likely development of the market if Kodak maintained the status quo.
Kodak had been experiencing a loss on market share from 76% to 70% over the past five years, which was caused by the action of its competitors like Fuji Photo Film Co. and Konica Corp., wooing consumers with low-priced versions.
If Kodak did nothing to deal with the situation, either in pricing or creating something new, sooner or later its competitors would continue to tighten their grips on Kodak's market share. The market share would slowly, but steadily, decreased. The growth, compared to Fuji's 15%, could not be relied on. At some point, it would be possible for Fuji to equalize its position with Kodak on the market share.
2.Specification of what Kodak's objective ought to be at this point. This involves possible trade-offs between market share, profitability, and brand equity.
These are the known facts from the case:
a.Kodak's market share was declining over the past five years, from 76% to 70%, although it remained owned the largest market share in the US with 70%. However, last year (1993) it still showed growth of 3%. b.In 1993, it made profit about $20 billion worldwide (Fuji managed to make half of it). c.Kodak's Gold Plus brand was the standard of the photo film industry, became the largest-selling brand by far, set the Premium brand price at $3.49.
Right now, Kodak should be more concentrating in sustaining its current market share. Even thought the competition is fierce and the competitors is closing in, either in market share or profit, Kodak still has the advantage of being the standard' of the photo film industry. Low-priced versions might interest the costumers for a certain period of time, but for people who want a much better result or quality, Kodak still manages to lead for the reference. However, pricing strategy is still possible...