Kodak Options Memo

After carefully considering the information contained in this research paper, we recommend the following actions be considered:

How do the characteristics of Donnelley's traditional printing business compare with the characteristics of on-demand digital printing?

In late March 1996, Ralph Norwood was faced with the task of restructuring Polaroid’s capital structure. In the past, Polaroid had a monopoly in the instant-photography segment. However, with upcoming threats in the emerging digital photography industry and Polaroid experiencing recent losses in their market share due to Kodak’s competition, Gary T. DiCamillo, recently appointed CEO of Polaroid, headed a restructuring plan to stimulate the firm’s performance. The firm’s new plan has goals such as to aggressively exploit the existing Polaroid brand, introduce product extensions, and enter new emerging markets such as Russia in order to secure Polaroid’s future.

When a physical product cannot easily be differentiated, the key to competitive success may lie in adding valued services and to improving their quality. These services are ordering ease, delivery, installation, customer training, customer consulting and maintenance and repair (Kolton, p.141). One of the product that comes to mind is printing ink. Hubergroup is one of the many ink manufacturing ink company. All inks might have a slight difference in performance but it all comes to customers’ preference and the service they receive. The website clearly states, “why deliver only ink, when we can delivery so much more?” (http://www.hubergroup.net).

The implementation of this strategy is so simple. If consumers purchase over 25 rolls of film at once, Kodak give them a coupon that they can print 5 rolls of film for free at the next time visit. At least 13% of each household can print 5 rolls of film for free, so Kodak should bear the expenses. It means that Kodak’s variable cost increases and net profit decreases. In the short run Kodak ma y lose some profit; however, in the long run, I’m sure that it could reinforce the qua ntity of consumers who want to purchase Kodak’s products. In addition, only Kodak has capabilities to do this strategy, because Kodak is exclusive company in film market which has the highest profit (gross) margin. If this strategy makes a great success, Kodak’s competitors may reduce the price. They has lower profit margin even now, so it means a shortcut to get bankrupt for them. You can find other real cases using this strategy2.

Background Eastman Kodak Company, headquartered in Rochester New York, was founded in 1889. The corporation, now multinational and focusing on imaging and photographic equipment, posted revenues in excess of $6 billion in 2011. During most of the 20th century Kodak was dominant in the photographic film industry in 1976 it held 90% of the market but began a downward slide once the Internet, digital cameras and computer processing grew. By 2007, Kodak ceased making a profit and in January 2012 filed for bankruptcy protection and ceased making cameras, video cameras and began to focus on the corporate digital imaging market (De La Merced, 2012). In evaluating Kodak's corporate strategy from the mid-1980s onward, we find that there four major management paradigms in place during this transitional period:

Kodak is known for providing the quality services, innovative products offering the best quality to customers. It developed competitive advantages and satisfied its customers during many years. Kodak has evolved different strategies in the field of traditional photography where it brought innovations and modification. Kodak has a successful history in the industry. According to the case study, the main reason behind the success of Kodak in the industry is its quality.

The concept of inkjet printing originated in the 20th century, and the technology was first extensively developed in the early 1950s. Starting in the late 1970s inkjet printers that could reproduce digital images generated by computers were developed, mainly by Epson, Hewlett-Packard (HP), and Canon. Although inkjet printers only appeared on the consumer market in the late 1980s, they had been under development for more than twenty years by that time. In the mid-1970s, printer companies realized the potential of the technology that would make dot matrix printers obsolete. The challenge, however, was to come up with a way to create an affordable inkjet printer that would reliably create high-quality print outs .In the worldwide consumer market, four manufacturers account for the majority of inkjet printer sales: Canon, HP, Epson, and Lexmark, a 1991 spin-off from IBM.[1]( "IBM Archives: 1990s". 03.ibm.com. Retrieved 2012-09-12.)

Capgemini Consultants established that since 2000, 52% of Fortune 500 companies have gone bankrupt, been acquired or ceased trading, due, to some extent, to their inability to keep abreast of the speed of digital transformation (Heck D., 2016). Kodak is one such example; it had declined the opportunity in digital photography and subsequently this destroyed its film-based business model. Despite Kodak monopolized the photography markets for the majority of the 20th century, it unexpectedly declared bankruptcy in 2012. However, digital disruption provides

Kodak in that sense lost a bit of advantage and did not change quick enough to keep their profitability up and made poor strategic decisions on how to deal with all the changes in technology that made their traditional model of making most of their money on film and other accessories outdated. One of the main problems that Kodak was that they had been in the top position for so long and they failed to expect that any decisions that they made would be correct one and would be supported by their loyal consumer base, but they did not move quickly enough with technology to keep up with consumer demand. They were too slow to act in diversifying the products that they were involved with to keep up their profit margins.

For customers; printers’ quality, price, speed, sustainability and availability are the matrices to decide on a printer.

George Fisher Kodak’s new CEO, has been successful in attracting new talent who worked in the technology department, Fuji’s strength. He hired Daniel Carp a sales veteran for Kodak who worked all over the world. Daniel traveled the sales markets and made adjustments to up Kodak’s share and Fisher wanted to tap that information and use it. He was promoted to President and COO and Carp fully realized that the changing and emerging markets were in taking advantage of that face and his contacts around the world. To help foster the change, Kodak admitted that they had to set up shop were the talent was, and to back that up. So they bought a successful software company in Silicon Valley, and marketing that alliance to the world they were on their way to climbing out of their complacency.

Kodak is American Technology Company that was found in 1890s. Kodak main focus is photography and imaging product. Recently, Kodak decided to enter the printers industry by designing a new line of printers that produce high quality photos. Kodak also will introduce a new line of printer ink, and photo paper. Kodak main challenge is competing against the market leader in the printing industry Hewlett Packard (HP) which has the largest market share in the printing industry. Also, Kodak is entering the market twenty years late than its competitor in the market who are more experience in term of the wants and needs of the consumers. In addition, increase in the industry rivalry with HP and risk in new product and offering would be a challenge that Kodak management has to overcome in order to stay successful in business.

This report will be investigating between 3 printers of 3 different brands, Epson, Hp and Lexmark. The best price, quality, availability, after-sale service produces the best product which is why it is necessary to comparison shop. Comparison Shopping is researching and comparing multiply sellers and

For a multitude of years Kodak remained synonymous with photography. Kodak developed the first handheld camera in 1900, called the Brownie (Thompson, 2014). The Brownie was inexpensive and designed for the average consumer with no professional training to take their own pictures. After capturing the pictures one would mail the film into Kodak and Kodak would develop the pictures and send return them. Kodak had created a way for people to take pictures of their lives to maintain special memories. In the company’s early years they actively searched for fresh opportunities to embrace cutting-edge technologies and sought out ways to grow sales and revenue. In the 20’s they began with home filmmaking and in the 30’s they embraced the world of color film. The company would continue in a growth mode over the next 40 years. The camera itself, provided limited revenue, on the other hand the film used by the cameras became a large revenue source. Along with the film, the process of developing the film grew and evolved. Eventually, one could drop off film and pick up developed pictures within hours.