Case study: Eastman Kodak

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Case study: Eastman Kodak

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Abstract

In its continuing thrust to foster long-term growth, development and success, Eastman Kodak Company is now faced with the dilemma to sustain in the mature and slow-growing silver-halide business. In addition, the company is contending with a legion of competitors to achieve and sustain a dominant position in the emerging digital imaging business, which at the moment poses encouraging and promising opportunities.

The influx of technological advancements into the photographic marketplace has presented the industry with a unique set of challenges and possibilities. Technological discoveries and enhancements may foster, or even hasten, the growth of the traditional silver-halide market. The Advanced Photo System (APS), for example, a product of technological advancement currently being developed by nig industry players may bring silver-halide-based products into a higher level.

In addition, with the onset of digital technology, the industry is faced with chance to expand its business through venturing more into digital imaging which is currently putting forth enticing opportunities. On the downside, considering the electronic nature of the products offered in line with digital imaging (eg. Scanners, printers, etc.), entry of potential competitors, particularly from the electronics group who may have equally competent resources and capabilities, is at a height. As a result, the structure of the industry may be altered.

Introduction
External analysis
1. General environment
2. Industry environment
3. Competitor analysis
Internal analysis
1. Global-level strategy
2. Corporate-level strategy
3. Business-level strategy
4. Functional-level strategy
SWOT analysis
Strategic alternatives
1. S-O strategies
2. S-T strategies
3. W-O strategies
4. W-T strategies
Financial analysis
1. Short-term liquidity and activity
2. Long-term solvency
3. Operating efficiency and profitability
Conclusion

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[...] FINANCIAL ANALYSIS SHORT TERM LIQUIDITY AND ACTIVITY Eastman Kodak Company's current ratio indicates that at year-end of 1994 current assets covered current liabilities 1.33 times down from 1993. It might be the result of paring of obsolete inventories or other stagnant current assets. From the year 1990 to 1993, a considerably high current ratio can be observed indicating an improvement in the current financial position of the company. It can be said that Kodak has a favorable credit position and satisfactory proportion of cash to the requirements of the current volume. [...]

[...] Here, Kodak must maximize its brand recognition and loyalty through carefully planned strategies when the APS innovation goes into the market. CORPORATE-LEVEL STRATEGY Fisher faced an acid test upon his arrival in Kodak. The company was in deep financial distress owing to the over expansion strategies through various diversifications, joint ventures, integrations and acquisitions implemented by previous CEOs. With the objective of facing stiff challenges posed by fierce competitors, previous CEOs failed to anticipate the trade off that will eventually beset the company with it's over expensive strategies. [...]

[...] COMPETITOR ANALYSIS As a part of a hyperactive competitive environment, Eastman Kodak must be able to efficiently and effectively strategize in order for it to be able to sustain its position in all areas of the market, existing and emerging alike. However, the success of the company's adopted strategy would depend upon the reaction of its competitors; thus, it is imperative that in its strategies, competitors' competitive profile must be given proper consideration. Kodak is faced with a legion of competitors; among which, Polaroid, Agfa, Fuji and Konica pose as the major rivals of the company. [...]

[...] It appears that there are no major problems with the Eastman Kodak Company's short-term position. LONG-TERM SOLVENCY The debt ratios for Eastman Kodak Company show that the company's capital structure shifted slightly away from borrowings and toward capital expenditure manifested by a decrease in debt ratio in 1994 of 0.73 from 0.83 of 1993. This may have been a result of the current move of the company to divest non-core businesses which have released the company from a substantial amount of debt. [...]

[...] This holds true in the case of Kodak and Polaroid in the late 1980s when Kodak engaged into marketing instant cameras. Foreign laws, in addition, in its move to protect local firms, may thwart the entry of global producers in its market. Furthermore, patent and proprietary rights laws would deter firms to expand, venture, and produce patented products. INDUSTRY ENVIRONMENT Threat of New Entrants. With great barriers, the threat of new entrants in the industry is at a low level. [...]

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