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Kodak Case

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Introduction

Eastman Kodak Company, commonly known as Kodak is an American multinational imaging and photographic equipment, materials and services company headquartered in Rochester, New York, United States. It was founded by George Eastman in 1889. Kodak is best known for photographic film products. During most of the 20th century Kodak held a dominant position in this sector. In fact, Eastman Kodak Co. is one of the dominant market share holders within the camera and other photography-related industries. Kodak pioneered amateur photography and is often credited for the invention of roll film and the first camera. The markets for color film and color photofinishing in 1954 were controlled by Kodak. It had over 90% of the amateur color …show more content…

According to the definition, a relevant product market includes “all those products which are regarded as interchangeable or substitutable by the consumer by reason of the products characteristics, their prices and their intended use”. We can presume that the relevant market for film includes all of the five firms: Kodak, Fuji, Konica, Agfa and 3M. However, not all of these firms’ products are viewed as fully interchangeable and substitutable by the consumer as stated in the definition. According to statistics, about 50% of consumers will only buy Kodak film despite of substantial price increases. This phenomenon indicates the consumers’ adamant belief in the superior quality of Kodak film. There were two different viewpoints on the relevant geographic product market for film discussed in the case. According to the district court, the relevant geographic market for film is worldwide, since foreign manufactures sell considerable amounts of film in the United States and Kodak’s market share is only 36% globally. However, the government argues that this determination is wrong and that the relevant geographic market in this case should be limited to the United States. The main explanation here is that a relevant geographic market comprises an area where the firm can exercise the market power. Taking into consideration the fact that Kodak charges much higher prices in the US comparing to other countries, the relevant geographic market

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