University of Eswatini

NAME : NGONIDZASHE MUBAYIWA

ID NUMBER : 153932
COURSE CODE : BUS 424
COURES NAME: APPLIED MARKETING

ASSIGNMENT : WHAT FACTORS THAT CONTRIBUTED TO THE TRAGIC

DECLINE OF EASTMAN KODAK? (100)

DUE DATE : 07/08/2020

Eastman Kodak Company is often cited as an iconic example of a company that failed to
grasp the significance of a technological transition that threatened its business. A number of
factors played an important role in Eastman Kodak’s tragic decline, Richards (2012). The
most important factor that contributed to Kodak’s demise was the rigid thinking on part of its
management that stopped them from taking timely initiative towards adoption of digital
technology in digital communications segment of the company. Another important let-down
related to change implementation occurred when Kodak’s management failed to realize that it
needs to continuously monitor the changes occurring in the environment and then take small
continuous steps towards complete adoption of a particular change if analysis reveals that it is
good for the overall organizational wellbeing. In the ensuing paragraphs a detailed discussion
will be carried out examining what went wrong at Eastman Kodak and what are the possible
remedial steps that can be taken.

Kodak missing the information age

The biggest strategic blunder committed by the management of Eastman Kodak was that it
failed to correctly anticipate the needs of changing time. While the competitors around them
were constantly innovating and coming up with new products in line with the changing needs
of the market, a big factor contributing to the amazing collapse of Kodak was management’s
approach towards finding solutions to strategic problems being faced by the organization.
According to Munir Kamal (2012), the Rational Thinking Perspective (RTP) was
successfully utilized by Kodak in its infancy when RTP was the main perspective being used
by leading businesses around the globe but, as time passed and fierce competition started
emerging Kodak ignored the need to change its core business technology from silver-halide
film technology to the digital technology. This failure to foresee change and sticking to RTP
was a huge strategic blunder on part of Kodak’s management and could well have been
avoided had the management at Eastman Kodak used Generative Thinking Perspective (GTP)
to solve the strategic problems being faced by the organization.

However, Kodak could easily have avoided the losses in revenues at the hand of fierce
competition from rival organizations had the management used Generative Thinking
Perspective (GTP) to tackle the changing environment needs. GTP, with its emphasis on
using intuitive approaches to meet emerging challenges in the marketplace, would have
helped Kodak’s management in foreseeing that it needs to move from the traditional film
camera to the digital camera in order to keep in line with changing consumer needs.

Extreme times need extreme measures

Kodak’s lack of initiative to adapt to changing needs of the market was another reason for the
organization’s gradually faded into oblivion. The management of the organization, led by
Daniel Carp failed to realize the danger in the forms of innovative product offering by rival
organization. The introduction of Mavica, a filmless digital camera by Sony Corporation as
early as 1981 should have served as a warning signal for Kodak’s management, but the top
management failed to foresee the looming signs of a disaster. A provocative management
team would have adopted the Continuous Renewal Perspective (CRP) as early as the 1980 to
gradually start making progress towards complete adoption of digital technology solutions.
The strategy to use CRP would have immensely helped Kodak in maintaining its crown as
the undisputed market leader in the camera industry.

However, In the early 1980’s the management of Eastman Kodak should have started the
process of slow transforming their key resources from silver-halide film technology to digital
technology, but they did not take any concrete step in this regard. Years later, with the rivals
now possessing state-of-the-art digital technologies Eastman Kodak is now left with no
choice and solution but to undergo a radical revolutionary change towards adopting the
digital technology in all stages of the post-digital photography value chain. The management
of Kodak must however by very careful in making the transition as any mistake at this point
would spell serious trouble for the future of the firm.

Dilemma of choosing between Resource Based View and Market Based View

Film, paper, chemicals and photo processing were the four areas where Kodak traditionally
held supremacy over its rivals but, with the advent of new age of digital technology Kodak
could no longer reap benefits out of the old sources of competitive advantage. The
fundamental problem being faced by Kodak’s management is that Kodak does not hold any
advantage over its rival organizations when it comes to possessing new age photography
resources such as digitization technology along with storage, retrieval, transmission,
manipulation and projection solutions. The advent of digital age has put Kodak in a serious
dilemma, in order to compete with its rivals it has to move into the digital printing medium,
an area where Eastman Kodak naturally has no experience in. In order to move into the
digital printing medium Kodak has to compete with organizations such as Sony, Mitsubishi,
and Canon who have their core competency oriented towards the digital technology.

In order to compete with the changing business scenario a new strategy was announced in
September 2003 in which Kodak’s management aimed to pay complete attention on display
and inkjet segments of the market. This change in Kodak’s strategy comes with the change in
the needs of the target market with customers moving away from the film based cameras to
digital cameras. Kodak has taken up the challenge by setting up minilabs and kiosks where
customers can come and easily get a hard copy of their digital photos. Kodak needs to
carefully present its offering to its intended target market as it has to compete with a number
of settled players with extensive technical expertise in the digital photo-finishing market.

Dilemma between choosing competition or cooperation in strategy.

Kodak, facing the daunting challenge of competing with technologically superior

organizations launched an aggressive campaign of acquiring companies and latest
technologies in order to address the ever changing needs of the consumer market. From the
acquisition of Scitex Digital Printing to forming strategic partnership with Verizon Wireless
and buying a 50% stake in Nexpress Solutions, Kodak embarked upon a massive strategic
partnership making mission that resulted in depressed cash flows for the organization and
created disinterest among the investment community. Kodak’s decision to aggressively
pursue Embedded Organization Perspective (EOP) was seen as a desperate attempt by the
organization to build its resource base in the imaging industry, an area where it hardly gives
any competition to its rival technologically superior organizations.

The management of Eastman Kodak should make sure that they do not take hasty merger and
acquisition decision as it would send wrong signals both to the investment community and
the customers. At this crucial juncture in the history of Kodak, each and every decision
should be taken keeping the best interests of the organization in mind and in order to do so
the management must first thoroughly examine if a merger and acquisition decision will be
profitable for the organization and what effect it will produce on potential customers and
investors of the firm. The management at Eastman Kodak must first clearly define its
intended target market and then develop partnership with organizations which can help
Kodak in offering highest quality products and services armed with latest technology to the
consumers.

The dilemma between choosing a globalization or localization strategy

According to Snelling, Kodak faces the dilemma between choosing a globalization or

localization strategy. The old and outdated model of sales based on the traditional analogue
technology has proved to be successful in some of the emerging Eastern markets
predominantly the Chinese market but, in the competitive Western market where the
competition is much more severe and rival organizations have developed their core
competencies strictly on the more advanced digital technology Kodak needs to quickly get its
core technology in line with their competitors.

However, the management of Eastman Kodak needs to realize that while the old and outdated
analogue technology may succeed in the emerging Eastern market, there are no bright
prospects for the use of this obsolete technology in the more developed Western markets. It is
right time now that the management of Kodak build-up a global strategy which can help the
organization to make use of its silver-halide technology in the emerging markets while at the
same time incorporating much more developed digital technology for producing and
marketing its products and services in the Western market.

To conclude, the management of Eastman Kodak committed a number of mistakes in running

the business operation including its complete reliance on internal organizational
competencies for an extended period of time and then abruptly changing the strategy to
merge with and acquire a huge number of organizations sending wrong signals to the
investment community. Although Kodak faces a number of challenges posed by the
technologically superior rival organizations but, if it correctly uses management strategies
aimed at constantly changing the organizational policies in line with industry benchmarks
there are bright chances that Kodak can win back its lost position.
Reference list

Munir, Kamal. "The Demise of Kodak: Five Reasons." The Source, Wall Street Journal, 26
Feb. 2012,blogs.wsj.com/source/2012/02/26/the-demise-of-kodak-five-reasons/. Accessed 6
Mar. 2018.

Munir, Kamal, and Nelson Philips. "The Birth of the 'Kodak Moment': Institutional
Entrepreneurship and the Adoption of New Technologies." Organization Studies, PDF ed.,
vol. 26, no. 11, 1 Nov. 2005, pp. 1665-87.

Snelling, Henry Hunt. History and Practice of the Art of Photography. Kindle ed., New York,
G.P. Putnam, 1849.

Richards, Dan, and Aimee Baldridge. "The 30 Most Important Digital Cameras of All Time."
Popular Photography, 23 Oct.2013,www.popphoto.com/gear/2013/10/30-most-Important-
digital-cameras. Accessed 20 June 2018.

UK Essays. (November 2018). Case Study on Eastman Kodak. Retrieved from

https://www.ukessays.com/essays/commerce/case-study-on-eastman-kodak-commerce-
essay.php?vref=1