Re-Modelling Eastman Kodak Essay

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Strategic Management at Eastman Kodak

Eastman Kodak was previously a legendary brand and a market leader in the photographic sector. With its catchy slogan, "You press the button, we do the rest" (Eastman Kodak, 2011), the company was successful in marketing its camera offerings. After monopolizing the U.S. photography market and becoming the market leader, Kodak employed over 150,000 people and sold as high as $17 billion in 1988 (Eastman Kodak, 2011). Currently, Kodak has recorded a 90% loss of its market value and is battling the threat of extinction.

Key objectives for Eastman Kodak

Kodak created numerous objectives, all of which are essential to the success of the company within the Cloud service industry. First, the firm strived to sustain the lead on technology developments. The competitive cloud service sector has experienced an influx of new technologies like digital imaging. The company aims at attaining the first mover advantage in terms of new technologies. Usually, any business that becomes the first to roll out new items in the market gains trust from consumers as far as quality and originality is concerned. The second objective of Kodak's mass production is critical for its success (Mellahi & Finlay, 2010). It has been operating in numerous countries for years now. In order to service its global and traditional local markets, mass production is an essential objective. In general, Kodak has depended on its outdated silver halide photography; therefore, mass production is crucial in sustaining its target annual income.

Thirdly, to lower the production cost is an essential objective of Eastman Kodak. Based on the company website, it is apparent that rivals like Fuji from Japan have maintained lower prices for their offerings. Thus, Kodak must find ways to cut its production costs to avoid being driven out of the market. The fourth relates to designing extensive product advertising. Previously, the firm had a strong image and brand name. Nevertheless, the entries of new corporations that are efficient in digital imaging have neutralized Kodak's popularity. Hence, Kodak must advertize vigorously if it must uphold its reputation and brand image. The final objective is to expand its multinational business model. From the overcrowding in the domestic market, Kodak targets to exploit the international market. Expanding its global presence would increase its efficiency and customer responsiveness. This would allow the company to access the remote markets, particularly the developing nations.

Kodak's horizontal and vertical integration strategy

A horizontal integration technique merges companies that function in the same industry, for the same business type or the same level of manufacturing. Some of the big name organizations that efficiently used horizontal integration in the past are Kodak: joint ventures and outsourcing. Kodak formed joint ventures with other organizations. It made new value propositions, collaborations, and alliances. It capitalized intensely on its current patent base. Kodak outsourced more of its manufacturing, as part-time, and casual employees led to the decrease of labor costs. Careful attention was taken to avoid outsourcing procedures of high strategic significance. The result allowed Kodak, to make new abilities for future improvements and maintain the significance of long-term success (Grant, 2010).

Vertical integration occurs when an organization increases its functions either backward into a market that manufactures inputs for the firm's items or forward into a market that uses, markets or offers the company's items. Since cloud service is an emerging business structure to Kodak, and the firm itself is in the photography market, therefore, the vertical strategy is needed. Kodak needs to obtain or work together with the new Cloud IT organization to research and make their new item. Kodak still has abilities in digital manufacturing and photofinishing. The new item needs to adhere to the pattern of the Cloud service, which convert the program to back service unit.

Five ways in which pursuing a multi-business model may increase profitability

A multi-business model can be built in five different ways. Hence, it can increase the profitability of a company:

1. Competency transfer between business divisions in various industries,

2. Creating a supportive environment for the competencies

3. Sharing of resources between business divisions to achieve economies scale

4. Bundling the merchandize

5. Exploiting organizational competencies to enhance company's performance

Transferring competencies: Today, the company has the strength in digital production and photofinishing. These proficiencies make the new Cloud service useful. Kodak and one IT organization will create the new item. This new service is an example of shifting skills. Competencies are created as the organization merge people and technological innovation.

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If associated together completely these competencies will change over time as both technology and knowledge develop (Grant, 2010). The link between people and technological innovation can be seen within the organization. For example, recently Kodak has made changes to their managing framework that has allowed them to gain new supervisors with knowledge and experience in digital imaging. Moreover, Kodak's ongoing networking strategy facilitates business possibilities with like-minded entrepreneurs. In the case of Kodak, networking is when Eastman promoted the first commercial transparent film roll in 1889. The impact created range beyond professional and consumer photography. For one thing, it allowed founder Thomas Edison to create the first motion camera in 1891, and by 1896 Kodak was selling film exclusively designed for motion picture utility.

Resources that are rarely found, highly valued, or are difficult to imitate in some cases comprise the core competencies that allow Kodak to compete successfully. This knowledge-focuses perspective created new competencies for the business; the ability to create and share knowledge that serves Kodak a competitive advantage. It is believed that competencies are established by incorporating knowledge. The firm has mastered the art of using resources efficiently. As a rule, innovations that enhance competencies are as likely to develop from Kodak as from outsiders. However, innovations that destroy competencies come from outsiders.

Sharing resources: Both IT organization and Kodak has their current sources in many aspects; Kodak has the clients, selling channels, political, technology and financing channels. These sources can provide the new item at different levels of growth. Moreover, the IT organization delivers their sources, equipment, IT engineers, and relationships in the industry. Of course, all the other labor force are just as essential to keep the organization going, workers with the necessary experience and skills that run the organization and invests in an efficient and successful way. Kodak has much equipment, some of which the business has had to modify and upgrade since the alterations and improvements in technological innovation in the digital era. Funding is also a primary resource. Without it, the company will have limited capabilities in producing and expanding because the operations are grounded. Another key resource is innovation, not only was it essential to the formation of the organization but it is important to its future (Mellahi & Finlay, 2010). To a higher or smaller level, innovations either destroy or enhance competencies that Kodak already possesses. An illustration of innovation by the company is the razor blade technique that Eastman used at the onset of the organization. Kodak marketed cameras at low costs to be able to generate revenue from the sales of camera films.

Recommend implementation strategy for Eastman Kodak

A Multidivisional framework is one of the implementation strategies that Eastman Kodak must achieve. A multidivisional framework is an intricate model. It allows a company to expand and grow by decreasing managerial and coordination challenges because it uses self-contained units. Besides, it also has different corporate head office employees (Inkpen & Ramaswamy, 2006). Since Kodak does not have too much exposure and experience in the IT sector, it is far better to apply this strategy. This is because other companies that do not have enough experience and knowledge do not need manage Kodak. Kodak still allows two companies to grow and diversify. It also decreases the management and coordination issues, and it distinguishes two functions. Therefore, there is no such report connection between two sections.

Secondly, the head office employees will be made to supervise each division and exercise financial control over each unit. Therefore, the structure of the business is taller compared to the initial business framework. Furthermore, the management is to create strategic management systems that reduce Kodak's overall price framework. Some divisions sharing the same function can be combined and distributed, like human resources division. Another example is purchasing division, when the business needs office supplies, they can make a single order, so it improve the quantity and negotiating power to meet reduced costs. The result of a multidivisional framework forms a taller company; it serves several additional business managers. These expenses need to be reduced so that the company's prospects of profiting can be realized.

Ethics, corporate social responsibility, and environmental sustainability impact the implementation of the strategies

As planned previously via the vertical integration strategy, Kodak will acquire an IT company that concentrates on Cloud service. After the business reform, Kodak becomes a multidivisional company. The new company will perform with a serial of rules......

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