A case study of how Kodak is guilty on four counts of serious corporate failure

A case study of how Kodak is guilty on four counts of serious corporate failure

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A case study of how Kodak is guilty on four counts of serious corporate failure His study undertakes an analysis of five fundamental dichotomies in strategy and applies them to the case of Eastman Kodak in an effort to understand the reasons for the business’ continual underperformance and misalignment1 with the operating environment. Four of these five case study discussions each reveal four serious counts of corporate failure on the part of Kodak’s strategic decisions and whilst explicit recommendations are not offered, there are clear explanations as to why the incorrect path has contributed to the firms’ current business challenges. The final topic integrates the previous four by providing an insight into how Kodak has managed to survive despite such imprudent corporate decisions and how it can use the time to reconsider a number of the business’ fundamental strategic choices. Historical Context & Timeline In 1880, after inventing and patenting a dry-plate formula and a machine for preparing large numbers of plates, George Eastman founded the Eastman Kodak Company. By 1884 Kodak had become a household name after he replaced glass photographic plates with a roll of film that Eastman believed was successful because it was a user-friendly product that would be “as convenient as the pencil”2, emphasized by the first marketing campaign that used the slogan; “You press the button, and we do the rest”.3 Eastman later identified Kodak’s guiding principles as; mass production at low cost, international distribution, extensive advertising, customer focus and growth through continuous research. Furthermore, he also articulated Kodak’s competitive philosophy; “Nothing is more important than the value of our name and the quality it stands for. We must make quality our fighting argument”4 With the advent of colour technology, the success story continued as the company invested heavily in R&D and by 1963 Kodak had become the industry standard. Sales topped US$1bn by launching into new product lines such as cameras and medical imaging and graphical arts, and quickly rose to US$10bn by 1981. Today, the Eastman Kodak’s principal activities centre on the development, manufacturing and marketing of consumer, professional, health and other imaging products and services. 5 The company operates through three segments: The Digital & Film Imaging segment provides consumer-oriented traditional and digital products and photographic services such as film, photofinishing services & supplies and digital cameras. The Health Group segment provides
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analogue products that include medical films, chemicals and processing equipment, and services and digital products including PACs, RIS, digital x-ray & output hardware supplies. The Graphic Communications segment provides inkjet printers, high-speed production document scanners, digital imaging systems and products aimed at the commercial print market. Kodak’s Performance Today
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This note was uploaded on 02/06/2012 for the course ECO 112 taught by Professor Dfgt during the Spring '11 term at Albright College.

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A case study of how Kodak is guilty on four counts of serious corporate failure

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