Kodak - the Reason for Bankruptcy

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  • Topic: Eastman Kodak, George Eastman, Rochester, New York
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Kodak: The reason for bankruptcy

Table of Contents
1. Introduction
2. Kodak Company Overview
2.1 Descriptive
2.2 An Analysis of Kodak’s Strategic Strengths
3. Photographic Industry
3.1 Description of the photographic industry
3.2 Analysis Using Porter’s Five Competitive Forces Model
Rivalry: high pressure
Bargaining power of buyers: median to high pressure
Bargaining power of suppliers: low pressure
Threats of substitutes: high pressure
Threats of new entrants: low pressure
4. Kodak’s bankruptcy
5. Recommendation: What could Kodak have done differently?
Conclusion
List of References

1. Introduction
The main reason leading to failure of Kodak because companies have turned away from their invention in 1970 is the invention of digital camera. They decided to continue their old strategy is photosensitive film, because they fear that the development of digital cameras will be an end to the photosensitive film products have made ​​their names around the world. This paper focuses on the bankruptcy of Kodak and the reasons lead to this problem. This topic is useful for us, the students, and those who want to learn from the failure of Kodak in order to prevent the same problems for their own company in the future. Moreover, the paper will provide an overview about Kodak’s history and briefly about the growth of this firm. People can compare how different its business went in the past and the present, then get their own lesson to apply in a specific circumstance. Our paper will include the following content:

The first part will mainly focus on the overview of Kodak. The second part is about the market of Kodak in general and information about its camera film field - Kodak’s trademark. We will try to apply the Porter’s Five Forces in the case of Kodak to evaluate how effective their strategy was. The third part we will show some numbers, figures that reflect the problem of Kodak. Next is some of our analysis, result of our research to see where did they do wrong, and how it affect the company’s survival. Lastly, some possible solution will be recommended to help improve the company’s situation.

2. Kodak Company Overview
2.1 Descriptive
Launched in 1881 under the name Eastman Dry Plate Company, George Eastman Company has quickly rich and famous for the production of cameras and photographic film. Can say thanks to the intelligent minds to develop new cycle, potentially sensitive, good spiritual and willing to take risks have contributed to the tremendous success for Eastman today in which they cannot fail to mention his most powerful brand, it is this: Kodak. Kodak was became one of the leading companies in photographic film products. Since then, Kodak has always been creative and come up with new products to make people at all levels of society can use the product with ease and simplicity. Kodak has created a photographic movement wherever which so far has been very popular all over the world, even though Kodak now not as strong as they used to be. Photographic film products were one of the most famous products. In most of the 20th century, Kodak always held a dominant position in the film. Especially in 1976, Kodak got 90% market share of photographic film sales in the United States. Some product of Kodak: digital cameras, printer ink, photographic film, document scanners and picture kiosk. The number of employees was 18,000 people.

The following table includes the number of net revenue, net income and total asset of Kodak from 2007 to 2010. (In millions)
| 2007| 2008| 2009| 2010|
Net revenue| $ 10,301| $ 9,416| $ 7,606| $ 7,187|
Net income| $ (676)| $ (442)| $ (209)| $ (687)|
Total assets| $ 13,659| $ 9,179| $ 7,691| $ 6,239|
(Source: Kodak (2007-2011) - Annual report - www.kodak.com)

Table 1: Income, revenue, assets of Kodak 2007 - 2010.

This table reflects the decreasing of most of Kodak’s record. The entire number decline has shown a part of Kodak’s problem....
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