MGT599 case 2- Kodak

Running head : Eastman Kodak

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Introduction

Eastman Kodak company is a multinational corporation founded by George Eastman in the late 1800 . The company had a manufacturing base of equipments , supplies and systems in professional imaging films , digital camera , printers , scanners and photographic chemicals

In 1980s the company started facing a lot of competition in photography leading to a decline in its product demand due to technological breakthroughs by other firms . However , Kodak instituted several measures which included looking for broader international market

strategy

Eastman decided to remake itself due to the uncontrolled losses it had been facing on its sales and market share in photo imaging . It was important for Eastman to diversify its market range by entering into additional markets with a variety of products and quality finishing

We can analyze the environment of Kodak company using the Porter 's five forces model . The model was developed by Michael E . Porter of Harvard Business School in 1979 . He developed a model of pure competition

His analysis used concepts derived from industrial organizations that determined the level of competition thus attractiveness to the market (Grant 2005 ) The attractiveness of a company in this context is its level of its profitability . Unattractive companies are as a result of these forces which drive a companies profitability downwards . These forces Porter refers to then as micro-environmental elements . Porter defines macro-environmental forces as those forces that affect a companies ability to serve its clients and make profits at the same time . Strategic managers who are keen in developing an edge over rival firms can utilize the Porters five force model to understand the industrial context one is operating in (Porter 1979

Rivalry between firms is brought about by competition in the traditional economic model . Firms in the modern world strive for competitive advantage over their rivals through expansion of profits When rivalry intensifies between firms a counter response is elicited by the other firm in response . In this pursuit , firms can choose a number of competitive moves

Some of these moves may include changing of prices mostly by lowering them giving firms a temporary advantage against their rivals . This is what happened with Kodak when they realized that other smaller companies were emerging in the market . This created advantage for them to survive amidst many challenges

Improving product quality is the other way of fighting rivals . This involves giving the best either at a cheaper price or at the same price as the rival company . This strikes a level ground and the decision is left with the customers (Porter 1979

Rivalry in the market can also be facilitated by slow market growth . In this respect , the Kodak company evolved as the only photo production and photo accessories company since the late 1800s . This rivalry is aggravated by low switching cost by customers from one company to the other . This results to a struggle to capture the customers again

The threat of substitutes or products that the substitute company produce is...