Eastman Kodak
Analyzing Managerial Decisions: Eastman Kodak
Victoria Callan
Saint Leo University
Managerial Economics
MBA 540-MBOL4
James Larrieve
August 02, 2013 Analyzing Managerial Decisions: Eastman Kodak
With the slogan “you press the button, we will do the rest”, George Eastman (a high school dropout) put the very first simple camera into the hands of a world of consumers in 1888 ("History of Kodak," n.d., para. 1). For many years, Eastman Kodak was virtually the only film manufacturer around so they had a monopoly in film production. Kodak was able to control the timing for introducing new products into the market and was able to make changes due to customer demand.
Until the early 1980’s, Kodak owned the film production market with very little competition. This suddenly changed when Fuji Corporation and many other generic store brands began producing high quality film as well (Brickley, Smith, & Zimmerman, 2009, p. 358). Technological advances, robotics, new design capabilities and better communications made it possible for the other companies to bring new products to the market in much less time. It was now months instead of years (Brickley et al., 2009, p. 358). Film and related products became more readily available, resulting in a more competitive film production industry. Kodak’s monopoly was gone. This caused Eastman Kodak to make changes to its organization architecture in 1984; the design of the current organization architecture no longer fit the business environment for the film industry. One of the largest factors to motivate Eastman Kodak to make these changes, were increased competition and decreased market share. The stock price of Eastman Kodak went from $85 a share in 1982 to just over $71 in 1984. This is a drop of 16% in their stock price (Brickley et al., 2009, p. 358). When compared to the increases in stock for the other companies in this market as a whole, the decrease was disturbing.
Kodak made some rapid and
Victoria Callan
Saint Leo University
Managerial Economics
MBA 540-MBOL4
James Larrieve
August 02, 2013 Analyzing Managerial Decisions: Eastman Kodak
With the slogan “you press the button, we will do the rest”, George Eastman (a high school dropout) put the very first simple camera into the hands of a world of consumers in 1888 ("History of Kodak," n.d., para. 1). For many years, Eastman Kodak was virtually the only film manufacturer around so they had a monopoly in film production. Kodak was able to control the timing for introducing new products into the market and was able to make changes due to customer demand.
Until the early 1980’s, Kodak owned the film production market with very little competition. This suddenly changed when Fuji Corporation and many other generic store brands began producing high quality film as well (Brickley, Smith, & Zimmerman, 2009, p. 358). Technological advances, robotics, new design capabilities and better communications made it possible for the other companies to bring new products to the market in much less time. It was now months instead of years (Brickley et al., 2009, p. 358). Film and related products became more readily available, resulting in a more competitive film production industry. Kodak’s monopoly was gone. This caused Eastman Kodak to make changes to its organization architecture in 1984; the design of the current organization architecture no longer fit the business environment for the film industry. One of the largest factors to motivate Eastman Kodak to make these changes, were increased competition and decreased market share. The stock price of Eastman Kodak went from $85 a share in 1982 to just over $71 in 1984. This is a drop of 16% in their stock price (Brickley et al., 2009, p. 358). When compared to the increases in stock for the other companies in this market as a whole, the decrease was disturbing.
Kodak made some rapid and
References: Annual Performance Plans. (2003). Retrieved from http://www.archives.gov/about/plans-reports/performance-plan/ Brickley, J. A., Smith, C. W., & Zimmerman, J. L. (2009). Managerial economics and organizational architecture (5th ed.). New York, NY: McGraw-Hill Irwin. History of Kodak. (n.d.). Retrieved from http://www.kodak.com Sloth, B., & Whitta-Jacobsen, H. (2005). Economic Darwinism. Retrieved from http://www.econ.ku.dk/okojacob/workpapers/ed.pdf