For Terry Bell, VP of Strategy, Eastman Kodak Company |
This report’s objective is to create a comprehensive strategic plan for Eastman Kodak. An assessment of Kodak’s value and mission will assist in understanding the overall strategy and operation of the company. The development of strategic objectives is based on a review of the company’s competitive environment and an analysis of its core business functions. This report will also give recommendations on how Kodak can use its resources to create capabilities that will push its competitive advantage and realign its organizational structure and management systems. Mission and Values
Kodak's core values are, Respect for the Dignity of the Individual, Uncompromising Integrity, trust, Credibility, continuous improvement and personal renewal, and recognition and celebration (Kodak, 2012). The company was considered a pioneer and leader in the photography and imaging industry and the historical success certainly proves that the company's operations and strategy was perfectly aligned to these core values. Kodak’s mission is to “grow more rapidly than our competitors by providing customers with the solutions they need to capture, store, process, output and communicate images anywhere, anytime. We will derive our competitive advantage my delivering differentiated, cost effective solutions including consumables, hardware software, systems and services quickly and with flawless quality”(Kodak,2012). Kodak’s vision “is to be a world class company and a leading imaging company in protecting the quality of environment and the health and safety of customers, employees and communities in which company operates its business and to capture pleasant movement with more energy and technical advancement and innovation” (Kodak, 2012). The current situation that Kodak is in shows that it failed to align strategy to values. Failure by the company to recognize the changes in the industry and offer new products, led to its failure and eventually having to file the chapter 11. As can be seen in the graph below, Kodak had many unprofitable years: (12valuestocks.com, 2012)
Analysis of Competitive Environment
Michael Porter’s five forces of competition framework are used to identify suppliers, potential entrants, buyers, substitutes and industry competitors. These forces shape every industry and also determine the direction of competition. By developing a strategic plan for Kodak the company will be able to adjust these competitive forces in a way that position is improved. Knowing the competition, what substitute products exists, what companies might enter the arena and what suppliers to develop relationships and most importantly knowing your buyers, these are all important so that the company can make informed decisions on how to strategically move to gain more market share. There are numerous competitors in the imaging industry. In the past Kodak enjoyed 90% of the film market share. Today the advancement of new technologies has attracted even more players to the industry. There has been a steady decrease of traditional products such as film, rivals have been staying ahead of the game and are able to offer digital solutions to the commercial and private sectors. Digital technology and the speed that the industry changed including substitutes, this proved to be a problem for Kodak. Kodak is faced with threats from the substitutes of camera phones, store brands and video technology. The smart phones of today have high definition picture and video capabilities reducing the need for traditional cameras. Also with the increased trend of digital image capturing devices ie. smart phones & tablets just to name a few, the customer has more control over the price Digital imaging industry has high entry barriers due to developmental , distribution costs and research and development expenses. Consumers are...