Eastman Kodak Meeting the Digital Challenges
Eastman Kodak is suffering from profit margin losses and technological changes in the photo world. Film has always been a high profit product for Kodak, but the margins and sales are rapidly reducing. Kodak is shifting the focus to digital printing market to save itself from financial ruins. The new CEO, Antonio Perez has been appointed to make Kodak the industry leader. Based on the analysis below, which analyzes the current environment and identifying threats and opportunities in the environment and comparing that information with the competitors, it is clear Eastman Kodak is on track to become a major player in the digital printing market. Potters five forces model is used to analyze the current competitive environment of Eastman Kodak. The five forces that are examined are: Entry of competitors, threat of substitutes, bargaining power of buyers, bargaining power of suppliers, and rivalry among existing players. The entry of competitors is always a huge issue when dealing with technology products, mainly because of their very short product lifecycle. With Xerox, Hewlett-Packard and other major companies already established in the market, it will be difficult for small players to enter the market; Eastman Kodak should acquire technology from small companies to strengthen their position. The threat of substitutes is an area that Eastman Kodak cannot ignore especially in the production and launching of their new consumer inkjet printers. While HP is relying on profit margins in the replacement cartridges, Eastman Kodak is marketing a quality printer, affordable cartridges, and quality paper combination to produce highest quality prints. If consumers buy Kodak’s economic value pack, the cost to print is about 10 cents, vs. 24 cents for HP products. Since Kodak is counting on the package as a whole, they must make sure marketing conveys the message, that it is truly a combination of it products that produce value...
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