According to LEWI theory of narrative lifecycle, Kodak has reached the stage of "myth time". Hence, the firm has to focus on certain issues like developing eternal values, involvement in the society, internationalizing the brand and rejuvenating the brand.
Today, due to its weak brand image, consumers don't perceive Kodak as a digital brand and they only think of it as a film making company.
Kodak has taken too much time to enter the digital market, so it is left far behind the competitors such as Sony and Olympus (Kodak only accounted for 13% shares of the digital camera market in 2002). As there are structural differences between the film manufacturing industry and the digital camera industry, since the film manufacturing industry is declining, Kodak will have to consider the following trends.
[...] Internal conflict Strong international presence, between film department VS digital especially in China department Good relationship with retailers No real consistent strategy Dominates the kiosk offering Too much diversification in the Strong marketing & advertising past: not linked to the core efforts business (pharmaceutical industry) User friendly products Insufficient minilabs offering Digital cameras remain unprofitable Appointment of executives who are not issued from Kodak Inability to patent invention Opportunities Threats Strengthen presence in emerging The digital revolution countries Too many competitors in the digital Internet services account for 10% industry: price war of all digital prints Decisions need to be made quickly Home printing is declining, The film industry, Kodak's core minilabs and kiosk might expand business, is under pressure and New potential markets: movie might disappear industry, memory card industry Appendix forces of Porter applied to the digital industry Bargaining power of buyers Many competitors, fragmented market. [...]
[...] 2nd strategy: evolution: a gradual shift from the traditional photography to the digital industry As the film industry is expected to decline, Kodak needs to focus on the digital industry to find a new source of revenue. Kodak intended to do so in two ways, but both failed: the separate organization units' strategy (in 1994, Fischer separated digital from silver-halide operations), and the top- down organizational change strategy (Fisher was able to change the culture at the very top but was not understood by the middle managers). [...]
[...] To achieve this, Kodak needs to emphasize on developing its minilabs' network (it currently owns only 100 minilabs whereas Fuji has 5000). In addition, Kodak should pursue and intensify its efforts on the specialty printing paper niche as the EBIT margins touch 25%. Finally, Kodak should develop and strengthen its presence in emerging countries, because there are huge potentials to grow (as they did in China). The main reason to advocate this strategy is the financial one: indeed, Kodak can't give up the film industry as it represents 21% of its revenues. [...]
[...] Kodak's main capabilities are to capture images, develop chemical devices to produce and print images. Kodak might specialize in high-quality imagery for the movie industry or for the astrophysics industry capturing images coming from the space for the NASA). This strategy has certain limits: firstly, it requires a profound strategic planning and restructuring of the company, in order to find the industry that fits Kodak's organizational and operational capabilities. Secondly, this strategy is very risky and hazardous both in terms of image and future revenues for the firm. III. [...]
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