Eastman Kodak: Problem Analysis and Recommendations Over Essay

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Eastman Kodak: Problem Analysis and Recommendations

Over the last few years, our company has been on a loss making streak. Our sales margins have continued to decrease year after year. This effectively means that we no longer dominate the photographic film marketplace like we used to do just over a decade ago. It is important to note that as our performance (in terms of sales) further declines, our competitors, including but not limited to Fujifilm and Olympus, continue to thrive in the very same market. Where exactly did we go wrong?

Kodak is today making losses today as a result of our inability to embrace change. We are no longer profitable because, unlike our competitors, we failed to embrace technology -- we refused to swiftly transition to digital photography.

Analysis

To save the company from a looming demise, there is need to embrace a number of strategies that will see it regain its profitability. We need a well-defined turnaround strategy. In that regard therefore, an increase in sales should be the company's immediate objective. Please note that as per my findings in the introductory section of this document, I clearly indicated that the most urgent problem the company faces at the moment is decline in profitability. I also indicated that the genesis of the said problem was the company's failure to embrace change with regard to technology; most particularly its failure to transition swiftly to digital photography. In this section, I present a number of strategies which, I believe, if adopted will see our company regain full profitability through sustained increase in sales.

Rebranding

It is important to note, from the onset, that as things currently are, Kodak lacks that emotional attachment to customers it needs to attract more sales. A few years ago, the 'Kodak' brand was easily recognizable across the world. Like is the case with the 'Coca-Cola' brand today, people bought Kodak brands because they easily identified with them -- they had that emotional attachment. Then companies like Fujifilm came, just as digital photography was beginning to take off. Due to Kodak's failure to read the signs of time, customers started identifying more with the new entrants and soon, they shifted their royalty. We need to rebrand.

To begin with, the company could change its name from Eastman Kodak (a name most by now associate with decline) to perhaps Kodak Reloaded. According to Adubato (2011), companies need not "be afraid to revise their names as part of a multifaceted rebranding" (p. 164). A new name will in my view send a signal to all the stakeholders (including customers) that the company is up to something new and different. A name change could be followed by a redesigned mission and vision statement, a new logo, fresh and promising slogans, etc. The said rebranding should ideally be followed by the introduction of new categories of products. It is important to note that this time round, Kodak should ensure that the various products it offers to the market have cutting edge technology. This will give the company a whole new look, create excitement in the market, and (hopefully) gain new customers thus further enhancing its revenues and hence profitability.

Creation of an Environment Conducive for Change

According to some professors from Wharton, there are companies that are caught off-guard whenever new technologies come about. The said professors speculate that our company, Kodak, "saw the future and simply couldn't figure out what to do." The document in which they make their assertions is provided at the end of this text for your perusal. They seem to suggest that the company saw change coming but couldn't adapt to the said change on time. It was as a result of this that the company lost its relevance in a market it dominated -- thus setting the stage for declining revenues. The relevance of having in place an organizational culture that is appreciative of change cannot therefore be overstated. It is important to note that even if the company were to introduce a fully fledged research and development department, continuous improvement (and hence enhanced sales as customer needs are addressed more efficiently) will still not be attained without a corporate environment conducive for change.

It is on the basis of the views of the professors from Wharton that I recommend that you initiate a process that will see Kodak develop a culture that not only embraces change but also thrives and encourages it. Should you do this, then you will have enhanced Kodak's flexibility and adaptability -- two important ingredients to painless change.

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Future change will in this case become a constant. In addition to helping Kodak's situation at the moment, such a move will also act as a 'protection' of sorts against future blunders -- where the company identifies the need to embrace change, but does nothing.

Introduction of a Fully Fledged Research and Development Department

It is failure to embrace technology, particularly in digital photography, that made us fall. So, why shouldn't we ensure that we set the pace on matters technology through continuous improvement of the services and products we offer to the market?

The above department will in my view see to it that the company keeps abreast with all the changes in its industry especially with regard to what customer desires. While well aware that Kodak has in place sales and marketing as well as production departments, I propose that the said R&D department have specialized functions including but not limited to research on new products, development of new products, updating of existing products, quality checks, etc.

While new product research will largely be about evaluating the need for the product, new product development will mainly concentrate on the fine tuning of product specifications. On the other hand, existing product updates and quality checks will largely be about evaluating the functionality of the company's products and ensuring that the products offered to the market by the company meet set standards. Given that these are different functions from those ordinarily performed by the sales and marketing and production departments, there exists no need to therefore worry of duplication of functions. With an overall responsibility of ensuring continuous improvement and innovation, the R&D department will come in handy in seeking to ensure that our company stays ahead of the competition. This way, the company will be able to enhance its sales and hence increase profitability.

Recommendations and Conclusions

In my own humble, but informed, opinion; the best alternative for the company to adopt as it plans its recovery to profitability is the introduction of a fully fledged R&D department. This department, as I have indicated elsewhere in this text will have specialized functions including but not limited to research on new products, development of new products, updating of existing products, and conduction of quality checks. It will ensure that through the development of innovative products, our company stays ahead of the competition. If Kodak had a fully fledged R&D department two decades ago, at a time when the Digital Imaging and Photography industry was transitioning from film to digital photography, it would not only have foreseen the transition but also acted upon it. That moment is now gone. What we do going forward is what really matters.

In my view, there are two critical measures the company must take to avoid further decline in terms of profitability. One, Kodak must 'catch up' with the other players in the market by amongst other things churning our products that are at par with those of the competition -- in terms of technology employed and functionality. Secondly, the company must immerse itself into future/ongoing research endeavors so as to ensure that it not only stays ahead of the competition but it also churns out products that consumers connect with. All these will impact positively on Kodak's bottom-line. It is important to note that the R&D department has a huge role to play to make this a reality.

We must seek to ensure that our company thrives as well as succeeds through the creation of innovative products, reduction of costs, as well as enhancement of efficiency in operations. An R&D department will see to it that these goals are met. As you may already be aware, the demands of consumers in most cases change swiftly. We need to have our tentacles on the ground so as to anticipate these changes. To succeed in a highly competitive market, we must be able to identify and adapt or respond to market trends swiftly. By having in place an R&D department, we shall be able to update and modify our products on a continuous basis -- a move that is likely to preserve the position of our brands in the market.

It should however be noted that to be effective, the R&D department I propose in this text need be adequately funded. You will also seek to ensure that the said department has the support of other departments and works closely with units such as sales and marketing….....

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