strategic analysis final paper

Eastman Kodak Company 1

Prepared By: Jessica LégerNovember 27, 2012

Eastman Kodak Company: Strategic Analysis

Table of ContentsExecutive Summary....................................................................................................................... 4

Company Snapshot........................................................................................................................ 5

Introduction.................................................................................................................................... 6Corporate Mission.................................................................................................................................... 6Corporate Vision....................................................................................................................................... 6Company History...................................................................................................................................... 7

Internal Analysis............................................................................................................................ 9Financial Analysis.................................................................................................................................. 10

Balance Sheet:.........................................................................................................................................................10Income Statement:................................................................................................................................................13Cash Flow Statement:..........................................................................................................................................17Ratios:.........................................................................................................................................................................19Stock Performance:.............................................................................................................................................. 21Shareholder Value:............................................................................................................................................... 22

Operational Analysis.............................................................................................................................23Organizational Structure:..................................................................................................................................23Production Methods:...........................................................................................................................................25Material Costs:........................................................................................................................................................ 26Location of facilities:............................................................................................................................................27

Human Resources.................................................................................................................................. 28Hiring practices:.....................................................................................................................................................28Promotion policies:.............................................................................................................................................. 30Creating Jobs:.......................................................................................................................................................... 32Training:.................................................................................................................................................................... 33Monitoring Performance:..................................................................................................................................34Absenteeism/Turnover:.....................................................................................................................................36Benefits:.....................................................................................................................................................................38Capabilities:............................................................................................................................................................. 40

Marketing/Performance Measurement.........................................................................................41Pricing:.......................................................................................................................................................................41Promotion/Advertising:.....................................................................................................................................42Products:...................................................................................................................................................................44Brand Loyalty:........................................................................................................................................................ 45Reputation:...............................................................................................................................................................46Image/Quality:........................................................................................................................................................50Market Segments:..................................................................................................................................................51

Environmental Analysis............................................................................................................ 52Customer Analysis................................................................................................................................. 53

Target Market:........................................................................................................................................................53Brand Loyalty:........................................................................................................................................................ 55Customer Motivation:..........................................................................................................................................56Unmet Needs:..........................................................................................................................................................57

Competitor Analysis.............................................................................................................................. 58Competitors Strengths:.......................................................................................................................................62


Market Analysis...................................................................................................................................... 64Market Size:............................................................................................................................................................. 64Market Growth Rate:............................................................................................................................................65Market Profitability:.............................................................................................................................................66Industry Cost Structure:.....................................................................................................................................68Distribution Channels:........................................................................................................................................69Market Trends:.......................................................................................................................................................70Key Success Factors:............................................................................................................................................71

Legal:.......................................................................................................................................................... 72Political:.................................................................................................................................................... 73Social:......................................................................................................................................................... 75Economic:.................................................................................................................................................. 77Demographics:........................................................................................................................................ 79Technological:......................................................................................................................................... 82International:.......................................................................................................................................... 83

SWOT Analysis Chart.................................................................................................................. 85

Goals and Strategies................................................................................................................... 86Goal #1:...................................................................................................................................................... 87Strategy #1:.............................................................................................................................................. 87Goal #2:...................................................................................................................................................... 88Strategy #2:.............................................................................................................................................. 88Goal #3:...................................................................................................................................................... 89Strategy #3:.............................................................................................................................................. 89

Summary/Recommendations................................................................................................. 90

References..................................................................................................................................... 92


Executive Summary

The following strategic analysis will contain various analyses to examine the

Eastman Kodak Company and how well the company is performing. It will provide a

brief insight of the company by examining the internal and external environments. The

internal analysis will include and examination of the financials, operations, human

resources, and marketing segments of the company. There will also be several other

analyses done on environmental factors that may affect the Eastman Kodak Company.

These environmental factors include analyses from the following segments: competitor,

customer, market, legal, political, social, economic, demographic, technological,

international, and a SWOT analysis.

After looking at the analyses, we will be able to see what the company is like as a

whole and see where it stands in the industry. It should give Eastman Kodak an idea of

the positive and negative aspects of the company, as well as what is to come in the future

for them. In conclusion of this strategic analysis, we will identify three potential business

strategies that could be implemented into the Eastman Kodak Company’s business

planning strategies. These business strategies are aimed to fix or improve some of the

flaws in Eastman Kodak Company’s current business strategies.


Company Snapshot

Headquarters:343 State St.Rochester, New York 14650Phone: 585-724-4000Toll Free: 800-698-3324Fax: 585-724-1089

Established:1880 in Rochester, New York

Personnel Employed:17,100 (2/29/2012)

Locations:Head Quarters: Rochester, New YorkOver 100,000 Picture kiosks worldwide

NASDAQ Symbol:EKDKQ

Primary SICS:3861- Photographic Equipment and Supplies

Primary NAICS:325992- Photographic Film, Paper, Plate, and Chemical Manufacturing

Top Competitors:FUJIFILM- Tokyo, JapanSony- Tokyo, JapanHewlett-Packard-

Target Market:Women with young childrenYoung Adults

Demand:The demand for Eastman Kodak products is declining due to lack of technological innovation.


Introduction

Corporate Mission

We will build a world-class, results-oriented, diverse culture based on our six key

values, through which we will grow more rapidly than our competitors by providing our

customers and consumers with solutions to capture, store, process, output, recognize and

celebrate achievement and communicate their images to people and machines anywhere,

anyplace, and anytime. We will derive our competitive advantage by offering our

customers and consumers differentiated, cost-effective solutions they want, when they

want, and with flawless quality in our consumables, hardware, systems, and services. In

this way, we will achieve our fundamental objective of Total Customer Satisfaction and

our consequent goals of Increased Global Market Share and Superior Financial

Performance.

Corporate Vision

To be the World Leader in Imaging


Company History

George Eastman started the Eastman Kodak Company when he was only 26 years

old in April of 1880. He began his business on the third floor of a building in Rochester

New York. In this building he began producing dry plates for sale by using his formula

for dry plates and his patented machine for producing large numbers of dry plates at one

time.

As the Eastman Kodak Company started to earn a name for itself, George

Eastman began advertising to the public. The first of many advertisements put out by the

Eastman Kodak Company were printed in newspapers and periodicals from day to day

with the ads written by George Eastman himself. Later the Kodak Company came up

with the slogan, “you press the button, we do the rest.” when they introduced the Kodak

camera to the public in 1888. Along with the slogan they also introduced the “Kodak

Girl” to relate a face to the companies name. Each year the Kodak Girls clothes changed

and the camera she was holding in the ad changed as well. Throughout the 132 years of

business the company has been through the brands logo has only changed 6 different

times. It began with just black lettering that said “EKC” and evolved into what is now

red and yellow coloring and the word Kodak. Kodak created a very strong brand logo

that is easily recognizable to people all over the world.

The Eastman Kodak Company grew in not only in film and cameras, but they

entered the market in several different fields. They began to manufacture film to be used

in motion pictures, carousal projectors, printers, digital printers, digital cameras, and even


began producing x-ray film. Through the 132 years of business the Eastman Kodak

Company has expanded to countries all over the world and has managed to keep George

Eastman’s ideals; mass production at a low cost with the customers always in mind.


Internal Analysis

The next section in this strategic analysis is an internal analysis of the Eastman

Kodak Company. The main goal and primary purpose of an internal analysis is to

understand the business in depth and to use the information found for strategic planning

to increase the company’s growth. This section will go over several aspects of the

Eastman Kodak Company including a financial analysis, operational analysis, Human

resources, and marketing and performance measurement. When the internal analysis is

complete it informs us of whether or not the company’s performance is thriving,

unsatisfactory, or deteriorating. And this will allow us to determine the appropriate

strategy for the company to grow.


Financial Analysis

Balance Sheet:

A balance sheet is a snapshot at a single point in time of the company’s accounts.

It covers the assets, liabilities, and stockholders equity. By looking at the Balance sheet

of Eastman Kodak we can determine the financial position of their business, and display

what the company owns and owes.

From the balance sheet we can see that Eastman Kodak Company’s assets are

declining while there debt to assets continues to rise. By comparing the balance sheets

for the past few years we can see that Kodak is in a dangerous pattern. Each year their

debt increases and this can lead to the company having to file for bankruptcy or be forced

to sell the remainders of the company.

In Millions of USD (except for per share items)

As of 2011-12-

31

As of 2010-12-

31

As of 2009-12-

31

As of 2008-12-

31

Cash & Equivalents 861.00 1,624.00 2,024.00 2,145.00

Short Term Investments - - - -

Cash and Short Term Investments 861.00 1,624.00 2,024.00 2,145.00

Accounts Receivable - Trade, Net 996.00 1,074.00 1,395.00 1,716.00

Receivables - Other - - - -

Total Receivables, Net 1,103.00 1,196.00 1,395.00 1,716.00


Total Inventory 607.00 746.00 679.00 948.00

Prepaid Expenses - - - -

Other Current Assets, Total 132.00 220.00 205.00 195.00

Total Current Assets 2,703.00 3,786.00 4,303.00 5,004.00

Property/Plant/Equipment, Total - Gross 5,485.00 6,022.00 6,432.00 6,805.00

Accumulated Depreciation, Total -4,590.00 -4,985.00 -5,178.00-

5,254.00

Goodwill, Net 277.00 294.00 907.00 896.00

Intangibles, Net 87.00 124.00 184.00 247.00

Long Term Investments - - - -

Other Long Term Assets, Total 716.00 985.00 976.00 1,422.00

Total Assets 4,678.00 6,226.00 7,691.00 9,179.00

Accounts Payable 706.00 959.00 919.00 1,288.00

Accrued Expenses 604.00 742.00 870.00 936.00

Notes Payable/Short Term Debt 0.00 0.00 0.00 0.00

Current Port. of LT Debt/Capital Leases 152.00 50.00 62.00 51.00

Other Current liabilities, Total 688.00 1,069.00 1,045.00 1,163.00

Total Current Liabilities 2,150.00 2,820.00 2,896.00 3,438.00

Long Term Debt 1,363.00 1,195.00 1,129.00 1,252.00

Capital Lease Obligations - - - -

Total Long Term Debt 1,363.00 1,195.00 1,129.00 1,252.00


Total Debt 1,515.00 1,245.00 1,191.00 1,303.00

Deferred Income Tax - - - -

Minority Interest 2.00 2.00 2.00 3.00

Other Liabilities, Total 3,515.00 3,286.00 3,699.00 3,501.00

Total Liabilities 7,030.00 7,303.00 7,726.00 8,194.00

Redeemable Preferred Stock, Total - - - -

Preferred Stock - Non Redeemable, Net - - - -

Common Stock, Total 978.00 978.00 978.00 978.00

Additional Paid-In Capital 1,108.00 1,105.00 1,093.00 901.00

Retained Earnings (Accumulated Deficit) 4,071.00 4,969.00 5,676.00 5,903.00

Treasury Stock - Common -5,843.00 -5,994.00 -6,022.00-

6,048.00

Other Equity, Total -2,666.00 -2,135.00 -1,760.00 -749.00

Total Equity -2,352.00 -1,077.00 -35.00 985.00

Total Liabilities & Shareholders' Equity 4,678.00 6,226.00 7,691.00 9,179.00

Shares Outs - Common Stock Primary Issue - - - -

Total Common Shares Outstanding

271.38 268.90 268.63 268.17


Income Statement:

The income statement is a financial statement that measures a company’s financial

performance over a specific accounting period. It is divided into two parts, the operating

activities and non-operating activities. The financial performance is calculated by giving

a summary of how the business incurs its revenues and expenses through both the

operating and non-operating activities. With the summary given through the income

statement investors and creditors are able to determine the past financial performance of

the company, predict the future performance, and assess the capability of generating

future cash flows through income and expenses.


12 months ending

2011-12-31

12 months ending

2010-12-31

12 months ending

2009-12-31

12 months ending

2008-12-31

Revenue 6,022.00 7,167.00 7,609.00 9,416.00

Other Revenue, Total - - - -

Total Revenue 6,022.00 7,167.00 7,609.00 9,416.00

Cost of Revenue, Total 5,135.00 5,221.00 5,850.00 7,247.00

Gross Profit 887.00 1,946.00 1,759.00 2,169.00

Selling/General/Admin. Expenses, Total 1,159.00 1,275.00 1,298.00 1,606.00

Research & Development 274.00 318.00 351.00 478.00

Depreciation/Amortization - - - -

Interest Expense(Income) - Net Operating - - - -


Unusual Expense (Income) 53.00 790.00 115.00 904.00

Other Operating Expenses, Total -1.00 -9.00 3.00 2.00

Total Operating Expense 6,780.00 7,728.00 7,726.00 10,237.00

Operating Income -758.00 -561.00 -117.00 -821.00

Interest Income(Expense), Net Non-Operating - - - -

Gain (Loss) on Sale of Assets - - - -

Other, Net - - - -19.00

Income Before Tax -758.00 -561.00 -117.00 -874.00

Income After Tax -767.00 -675.00 -232.00 -727.00

Minority Interest 0.00 0.00 -1.00 0.00

Equity In Affiliates - - - -

Net Income Before Extra. Items -767.00 -675.00 -233.00 -727.00

Accounting Change - - - -

Discontinued Operations - - - -

Extraordinary Item - - - -

Net Income -764.00 -687.00 -210.00 -442.00

Preferred Dividends - - - -

Income Available to Common Excl. Extra Items -767.00 -675.00 -233.00 -727.00

Income Available to Common Incl. Extra Items -764.00 -687.00 -210.00 -442.00


Basic Weighted Average Shares - - - -

Basic EPS Excluding Extraordinary Items - - - -

Basic EPS Including Extraordinary Items - - - -

Dilution Adjustment 0.00 0.00 0.00 0.00

Diluted Weighted Average Shares 269.10 268.50 268.00 281.80

Diluted EPS Excluding Extraordinary Items -2.85 -2.51 -0.87 -2.58

Diluted EPS Including Extraordinary Items - - - -

Dividends per Share - Common Stock Primary Issue

0.00 0.00 0.00 0.50

Gross Dividends - Common Stock - - - -

Net Income after Stock Based Comp. Expense - - - -

Basic EPS after Stock Based Comp. Expense - - - -

Diluted EPS after Stock Based Comp. Expense - - - -

Depreciation, Supplemental - - - -

Total Special Items - - - -

Normalized Income Before Taxes - - - -


Effect of Special Items on Income Taxes - - - -

Income Taxes Ex. Impact of Special Items - - - -

Normalized Income After Taxes - - - -

Normalized Income Avail to Common - - - -

Basic Normalized EPS - - - -

Diluted Normalized EPS -2.69 -0.58 -0.51 -0.49


When looking at the income statement for the Eastman Kodak Company we can

see immediately that they have experienced a net loss for the past four years of their

business operations. This means that total revenue earned is less that of the expenses

incurred throughout the accounting period, and they have made no profit. We can also

see from the charts provided above that profit margin and operating margin from the

operating activities and non-operating activities has steadily decreased since 2007.

Company’s that incur a net loss at the end of an accounting period don’t

necessarily go bankrupt because they may decide to use their retained earnings or even

take out a loan to keep their company going. However, a company that cannot make

profits and continually generates a net loss will not be able to survive in the market.

Based off of Eastman Kodak’s past four income statements we can suspect that the


company is headed for bankruptcy unless they can increase their revenue and lower their

expenses.

Cash Flow Statement:

A cash flow statement is a financial statement that shows how cash is generated

and used during a specific accounting period. The cash flow statement is organized in

three main categories, operating activities, investing activities, financing activities. By

reading the cash flow statement we will be able to determine the short-term life of the

company.

When looking at the cash flow statement for the Eastman Kodak Company we can

see that the cash from operating activities (-998.00) is less than the net income (-764.00).

This raises a red flag because the reported net income is not converting into cash like it

should be. Along with that the Eastman Kodak Company is generating less cash than it

is using to keep all of its activities up and running. It can be determined from looking at

the cash flow statement that the Eastman Kodak Company does not generate enough cash

to fund all of its operating activities and its income is not converting into cash like it

should be.



12 months ending

2011-12-31

12 months ending

2010-12-31

12 months ending

2009-12-31

12 months ending

2008-12-31

Net Income/Starting Line -764.00 -687.00 -209.00 -442.00

Depreciation/Depletion 294.00 378.00 427.00 500.00

Amortization - - - -

Deferred Taxes 12.00 -91.00 -99.00 16.00

Non-Cash Items -76.00 741.00 -95.00 798.00

Changes in Working Capital -464.00 -560.00 -160.00 -704.00

Cash from Operating Activities -998.00 -219.00 -136.00 168.00

Capital Expenditures -128.00 -149.00 -152.00 -254.00

Other Investing Cash Flow Items, Total 103.00 37.00 130.00 66.00

Cash from Investing Activities -25.00 -112.00 -22.00 -188.00

Financing Cash Flow Items -6.00 -12.00 -30.00 0.00

Total Cash Dividends Paid - 0.00 0.00 -139.00

Issuance (Retirement) of Stock, Net - 0.00 0.00 -301.00

Issuance (Retirement) of Debt, Net 252.00 -62.00 63.00 -306.00

Cash from Financing Activities 246.00 -74.00 33.00 -746.00

Foreign Exchange Effects 14.00 5.00 4.00 -36.00


Net Change in Cash -763.00 -400.00 -121.00 -802.00

Cash Interest Paid, Supplemental 126.00 115.00 70.00 85.00

Cash Taxes Paid, Supplemental

78.00 197.00 225.00 145.00

Ratios:

Profitability is an important indicator of a businesses performance and can tell you

whether or not past business strategies were successes or failures. When looking at

profitability ratios the higher the percentage on return of equity and return on assets the

more profitable the company is. Return on equity measure a company’s profitability by

showing how much profit a company generates with the money the shareholders have

invested into the company. Return on assets is an indicator of how profitable a company

is compared to its total assets, or how efficient management is at using the company’s

assets to generate earnings. From the table below we can see that the Eastman Kodak

Company’s return on assets is a negative percentage at -3.87%. And the company’s

return on equity is also at a negative percentage at -22.16%. This tells us that the

Eastman Kodak Company generates zero profit and has continually been going into debt

throughout the last few years.


Margins % of Sales 2008-12 2009-12 2010-12 2011-12 TTM

Revenue 100.00 100.00 100.00 100.00 100.00

COGS 76.96 76.76 72.85 85.27 4.66

Gross Margin 23.04 23.24 27.15 14.73 —

SG&A 16.81 17.12 17.77 19.25 4.68

R&D 5.32 4.68 4.47 4.55 —

Other 1.29 1.81 9.59 0.90 -1.74

Operating Margin -0.38 -0.37 -4.68 -9.96 -2.94

Net Int Inc & Other -8.90 -1.17 -3.13 -2.62 -17.89

EBT Margin -9.28 -1.54 -7.81 -12.59 -20.83

Profitability 2008-12 2009-12 2010-12 2011-12 TTM

Tax Rate % — — — — —


Net Margin % -4.69 -2.76 -9.56 -12.69 -20.49

Asset Turnover (Average) 0.82 0.90 1.03 1.10 1.12

Return on Assets % -3.87 -2.49 -9.86 -14.00 -23.02

Financial Leverage (Average) 9.55 — — — —

Return on Equity % -22.16 -45.36 — — —

Return on Invested Capital % -12.83 -12.28 — — —

Stock Performance:

Stock prices are at an all time low for the Eastman Kodak Company. As of

November of 2012 the stock price has been at $0.20. Shareholders are trying to sell off

what shares of stock they do have invested in the company even though the return is

extremely low. Since rumors have been going around about the company filing for

bankruptcy experts have been telling people, “ Stay away from this stock if you know

what’s good for your portfolio (Munarriz, 2012)”.

Today’s Trading

Previous close 0.21


Today’s open 0.20

Day’s range 0.20 - 0.21Volume 856,640Average volume (3 months) 2,514,777Market cap $54.5MDividend yield --

Data as of 3:56pm ET, 11/09/2012

Shareholder Value:

Shareholders, also known as stockholders, are the backbone of a company and are

considered an individual that legally own a share of stock in a corporation. They own

pieces of stock from the company but not the actual corporation itself. Shareholders

value is the sum of all strategic decisions that affect the firm’s ability to efficiently

increase the amount of free cash flow over time. In other words, it is the value

shareholders receive because of management’s ability to grow earnings.


Shareholders of Eastman Kodak have been in panic recently due to Kodak’s

inability to generate revenue that exceeds the cost of their operations. The shareholders

value is at an all time low as the Eastman Kodak Company debts whether to declare

bankruptcy or not. “As it stands, though, Kodak is burning cash as it limps toward the

corporate graveyard in a less-than-picture-perfect finish (Smith, 2011)”. This once iconic

company struggles to stay afloat and keep their shareholders happy.

Operational Analysis

Organizational Structure:

As of September 10, 2012 the Eastman Kodak Company announced its new

organizational changes to its structure. The main focus of this new organization structure

is to reduce their cost structure. “Kodak is becoming a more focused and competitively

scaled company. We recognize that we must significantly and expeditiously reduce our

current cost structure, which is designed for a much larger, more diversified set of


businesses. We are reorganizing our senior management team, an action that will help

accelerate the creation of a sustainable cost structure for operating our business for the

benefit of our customers and position our Personalized Imaging and Document Imaging

businesses for successful sales (Perez, 2012)”. The company will now have three main

business segments: digital printing and enterprise; graphics, entertainment and

commercial films, and a new segment with personalized imaging and document imaging.

“This business structure puts the right people in the right positions to accomplish the key

tasks that will help Kodak successfully emerge (Perez, 2012)”. Along with them new

organizational structure, there is a new management structure that goes as follows:

The Commercial, Packaging & Functional Printing Solutions and Enterprise

Services business will primarily include the Digital Printing and Enterprise

(DP&E) and Graphics, Entertainment and Commercial Films (GECF) units.

DP&E President Douglas J. Edwards and GECF President Brad W. Kruchten will

report directly to Perez.

Philip J. Faraci, President, is leaving the company. Perez noted that as Chief

Operating Officer, Faraci played an important role in helping transform the

company. With Faraci’s assistance, the company has developed excellent

operational leadership processes to take forward its remaining businesses.

Chief Financial Officer Antoinette P. McCorvey has decided to leave the

company. Rebecca A. Roof, a managing director of AlixPartners, the company’s

restructuring advisory firm, will become Chief Financial Officer on an interim


basis, reporting to Perez. Roof has served in similar capacities for other

companies that have successfully emerged from Chapter 11 restructurings, and

she has deep experience in scaling overhead costs, implementing cost reduction

programs, managing liquidity and raising capital, and executing asset sales – all

critical areas of focus for Kodak as the company concludes its restructuring.

Laura G. Quatela, Kodak President, will assume the additional role of President,

Personalized Imaging, and lead that business through its sale process.

Dolores Kruchten will become President, Document Imaging, to lead that business

through its sale process.

Quatela and Dolores Kruchten are expected to remain with Kodak until the sales

of their respective businesses are completed in the first half of 2013.

Production Methods:

The Eastman Kodak Company has a very simple production process and they

designed it this way on purpose. To be able to get out of debt as soon as possible they

needed to manufacture and distribute their products as quickly as possible. Instead of

making parts on their own like circuit boards, and paper base Kodak started to order them

from a third-party supplier. Ordering from a third party supplier cut down on the time it

took to manufacture the products so they could be put on the shelves quicker. The faster


Kodak can put products on the shelf, the faster they can make a profit in hopes to relieve

some of the company’s debt.

Material Costs:

Eastman Kodak’s material costs vary throughout the year. They spend the most

on materials in the last quarter of the month than they do in any other time of the year.

This is in direct correlation with the sales that the company experiences during the year.

The best time of the year for the Eastman Kodak Company sales wise is the last few

moths of the year because that is when consumers are looking to buy presents for the

holidays.


Eastman Kodak purchases many different raw materials. Some of the raw

materials that they purchase they use to manufacture some of their own supplies but

others they purchase already made from a third party supplier and use it in their final

products. Eastman Kodak purchases lithographic aluminum to offset printing plates

while they are manufacturing lithographic aluminum coils for their products. They also

purchase silver, which the company uses to manufacture paper, and film they sell to their

consumers to print on. The materials that Eastman Kodak purchase already made from a

third party is paper base used for the manufacturing of photographic papers, and

electronic components that have many uses and are used in the manufacturing of the

electronic goods the Eastman Kodak Company produces. The company’s industrial

materials include aerial and industrial film products, film for the production of printed

circuit boards, and specialty chemicals all used in the manufacturing of products.

Location of facilities:

The Eastman Kodak Company’s corporate headquarters is located in Rochester,

New York when the company first began. The company’s corporate headquarters

include their largest U.S. manufacturing facility, research and development and their

corporate services office. Kodak’s primary manufacturing center for thermal media,

motion picture film, and colored paper is located in Windsor, Colorado. Windsor is

located approximately 60 miles from Denver and employs almost 2,000 northern


Colorado residents. Atlanta, Georgia is home for Kodak’s largest business unit,

consumer imaging. This headquarters comes complete with onsite dining, fitness center,

dry cleaning, post office, and an auto detailing shop. The last headquarters located in the

U.S. is a division of the graphic communications group; Kodak’s inkjet printing solutions

headquarters is located in Dayton, Ohio.

Kodak has two more major facilities that are located outside of the United States.

The first one is located in Toronto, Ontario Canada. The second is in Vancouver, British

Columbia where Kodak’s graphic communications segment is a leading developer,

manufacturer, and distributor of digital sounds for the graphic arts industry.

Human Resources

Hiring practices:

The hiring process for the Eastman Kodak Company used to include a long and

extensive interview process with lot of paper work. Since the downsizing of the

company they began to make several changes in the hiring process. The first big change

came when they decided to cut out their own HR department. This decision was made

for two reasons. The first reason was because the company already needed to downsize


and the second was because the current HR department’s hiring process was too lengthy

and they were not hiring the candidates that they should have been hiring. Elizabeth

Petro, the director of talent acquisition and strategy development at Eastman Kodak,

stated “Internal folks focused so closely on cost control during several years of

downsizing that they "forgot how to hire." After conducting a detailed examination of its

hiring process flow, Kodak realized it had too many service providers, with too many

hand-offs between them. And it was failing to meet its time-to-fill and diversity metrics.

Kodak decided to centralize hiring under its shared services organization and began

looking for a single supplier that could handle its needs (All, 2008)”.

When the HR department was cut, Eastman Kodak began to outsource for their

HR department. The company chosen for the outsourcing of the HR department was a

Pinstripe. Because of Pinstripe, “Kodak's hiring process is now simpler and involves far

less paper than in the past. It is attracting more candidates with the right kind of

experience (All, 2008)”. Although the company’s hiring process has improved

tremendously from before it began outsourcing its HR department they are still hoping to

create a more positive hiring brand, and developing an employee orientation and referral

program.


Promotion policies:

Promotion policies are very important to a company and its employees. The

employees feel appreciated because of the promotions the company offers to them. In

return the employees will work harder for the company to receive more benefits. This

allows each party to be benefited in some way. Even though promotional policies are

intended to be for the good of the company, sometimes they can turn out to be a disaster.


The company can only afford to reward its employees if it’s generating enough revenue

to do so.

One of the thought to be “win win” situations can be found in Kodak’s

competitive compensation packages promotion policies. These promotional policies

offer rewards to the employees based off of their performance. “Kodak offers employees

market competitive, performance-based compensation. In addition to competitive base

salaries, Kodak offers the opportunity to participate in profit sharing, commission or

variable pay plans which, based on both Company and individual performance, provide

the opportunity to share in the Company’s success (Benefits)”.

The company’s competitive compensation promotional policies backfired on them

in early 2012. Eastman Kodak had filed a motion with the U.S. Bankruptcy Court asking

approval to pay out $17.6million in competitive compensation bonuses to 15 of their top

executives. This enraged many former Kodak employees because their competitive

compensation benefits were taken away from them when the company filed for

bankruptcy. “Pignataro, who says he is a Kodak retiree, wrote that he was “outraged” to

learn that Kodak Chief Executive Antonio Perez would “even ask to be included” among

the bonus recipients “after he led the company into bankruptcy (Palank, 2012)”. If the

company is going to take away the employees competitive compensation packages

because of bankruptcy and debt, then they should not be allowed to continue to reward

the executives. Instead they should be saving all the “bonus money” employees would be

earning to pay off their increasing debts.


Creating Jobs:

Back before the digital age came about, the Eastman Kodak Company was

continually growing. They were constantly creating jobs in many areas of their

company. As the company grew, job openings in managerial positions to factory

workers were always open and ready to hire someone. However, when other camera


companies flew into the digital age Kodak was left behind. Because of their slow

entrance into the digital market many jobs were put into jeopardy.

Eastman Kodak had to begin cutting jobs to try and makeup for all the revenue

and customers it lost when they did not advance into the digital market as fast as their

competitors had. As a result of this lost revenue the company has been forced to claim

bankruptcy. “Bankrupt Eastman Kodak Co said it will cut 1,000 additional jobs by the

end of this year and may cut more as it focuses on its commercial packaging and printing

business (Ramakrishnan, 2012)”. Kodak’s employee base has gone down dramatically

from 1980 when they had approximately 145,000 employees to its now 17,000

employees.

Training:

The Eastman Kodak Company provides adequate training for all of its employees.

They offer training for all positions in the company from drivers, optical training, sales

training, and managerial training. Kodak’s main focus on training its employees right

now is on its sales team and the managerial employees. They are mainly focusing on


these two groups for the purpose of trying to save the company. Management needs to be

able to create a new business plan and needs to be able to successfully accomplish the

goals of the business plan. The sales team needs training to be able to sell the new

business plan and products that the Eastman Kodak Company is continuing to sell. The

sales team also needs to be able to outsell the company’s competitors.

The Eastman Kodak Company believes that with the proper training and

enthusiasm of its employees that the company can come back from this slump that it has

found itself in.

Monitoring Performance:

The Eastman Kodak Company has three main procedures they follow to ensure

the company is performing at its best. The first of the three is the enterprise risk

management assessment. The Chief Compliance Officer, and the General Council

conduct this assessment. “Risks are assessed and monitored across business, functions


and regions. These assessments also serve to evaluate compliance risks such as anti-

corruption (including anti-bribery), labor and human rights (Kodak Monitoring)”. After

the results are finalized they are presented to the Risk Management and Compliance

Committee, and the Audit Finance Committee of the Board of Directors. Lastly, Kodak

provides a report of all its risk factors in the 10K Annual Report, 10Q Quarterly reports

and SEC filings.

The second of the performance monitoring procedures is called process assurance.

“Kodak maintains an internal control system to ensure reasonable assurance that the

Company conducts operations in a manner that is efficient and effective, safeguards

Kodak assets, assures reliability of information for external reporting and assures

compliance with company policies and procedures, laws and regulations and contractual

obligations (Kodak Monitoring)”. The findings from this procedure are reported to

senior executives and the Board of Directors by the Corporate Auditing Department.

The final procedure is the health, safety and environmental performance

monitoring procedure. The Director of Health, Safety, and Environment is responsible

for making sure the company is keeping up with the HSE performance standards.

“Operations, including subsidiaries, are routinely audited to verify compliance with the

Standards, policies, procedures, and the laws and regulations of applicable governing

entities. Kodak also has a Performance Standard for its suppliers and utilizes supplier

self-assessments, on-site audits and material declarations to verify a supplier's

conformance with the Standard and applicable product specifications (Kodak


Monitoring)’. With all three of these monitoring procedures in place, Eastman Kodak

can be sure they hold themselves to the company’s high standards.

Absenteeism/Turnover:

Turnover rate used to be something that the Eastman Kodak Company could pride

themselves on. With such strong company name that was continually growing who

would want to leave. As stated on their web page, “On the surface, Kodak is a

remarkable company with much to offer potential employees. Look a little closer, and


you’ll discover for yourself why so many new hires happily spend their entire careers

with us, why turnover is nearly non-existent, and why we could be the perfect partner to

help you achieve your personal vision of professional success (Kodak, Life at Kodak)”.

Kodak also offered its employees many benefits that allowed them to get their work life

and home life in sync to prevent absenteeism. These benefits included daycares, gyms,

elderly care, and work/life policy programs.

This low rate of absenteeism and turnover did not last for long. When the

company started to go bankrupt in the early 2000’s, Kodak had to begin laying

employees off. They layoffs began when Kodak started phasing out and shutting down

whole sections of the company that were not making a profit. “Since 2003 the company

has laid off somewhere between 25,000 and 27,000 employees, and today announced that

3,000 more would be laid off after last month's sale of their health-imaging unit which

brought in $2.35 billion (Fowlkes, 2007)”.

Eastman Kodak does not plan to keep the employee count that low for long. They

have entered into a four-year plan of transition into a new market. After they make a

successful transition into the new market the Eastman Kodak Company plans to be back

at the top of their game once again.


Benefits:

The Eastman Kodak Company offers their employees many helpful benefits to

help them today, in the future, and to help them better balance their work and home lives.

Kodak offers employees market competitive, performance-based compensation. They

also offer the opportunity to participate in profit sharing, commission or variable pay

plans which, based on both Company and individual performance, provide the

opportunity to share in the Company’s success. Kodak set up a benefits program called

the “Flex Program”. This program covers you and your family members with the

following benefit options:

Medical

Dental

Flexible Spending Accounts (Health Care & Dependent Care)

Health Savings Account (HSA)

Life Insurance - Employee & Dependent

Accidental Death and Dismemberment Insurance (AD&D) - Employee&

Dependent

Long-Term Disability (LTD)

Vacation Buy

Long-Term Care

To help their employees plan ahead for their future Eastman Kodak offers their

employees with a competitive retirement benefits program.


Cash Balance Plus is the retirement program for new Kodak employees. Cash Balance

Plus has three components: Cash Balance pension account, 401(k) plan and access to

retiree medical coverage. Kodak also offers an Employee Stock Purchase Program that

allows employees to purchase Kodak stock. And to help balance work life and home life

better, they offer a number of programs and resources for employees to meet personal

needs wile still contributing to Kodak’s success. These programs include:

Adoption Assistance Plan

Adoption Resource Service

Child Care Resource and Referral

Education Resource Service

Elder Care Resource and Referral

Emergency/Backup Dependent Care (Available in Rochester & Colorado)

Employee Assistance Program

Personal Absence, Family Leave, and Short-Term Disability

Relocation Assistance

Vacation and Holidays

Work/Life Policies and Programs


Capabilities:

When looking at Eastman Kodak’s capabilities, we are looking at the aspects of

business that they have not totally succeeded in. Human Resources then takes those

aspects and tries to connect then from the Human Resource framework to its business

framework. After connecting the two frameworks together the company should see a

positive train reaction in the business, employees, and consumers. “The Kodak

framework lays out three unique ways in which HR can contribute to business success:

building organizational capabilities, enhancing employee satisfaction, and shaping

customer satisfaction (Berman, 1997)”. With Eastman Kodak’s Human Resource

framework and business framework in sync the company is experiencing increasing

employee satisfaction along with increasing market value.


Marketing/Performance Measurement

Pricing:

Eastman Kodak’s pricing on their products has always been relatively fair to their

consumers. The company got their consumers hooked on printing their photos and they

had been the leading mass supplier of film and printing until FUJIFILM one if the

company’s largest competitors outdid them. FUJIFILM also began to mass-produce film

and printing supplies but at a lower cost than the Eastman Kodak Company was. “ Fuji’s

willingness to cut prices was quite popular with the rapidly growing mass merchandisers

like Wal-Mart that preferred to deal with suppliers who were willing to sell high volumes

at ever-lower prices (Cohan, 2011)”.

Because of FUJIFILM the Eastman Kodak Company lost all their sales of film

and began to focus on what their company was actually excelling at, their printers and

ink. “ Kodak printers sell for 15 percent to 35 percent more than competitors such as

those from Hewlett-Packard and while the ink costs about half as much, according to the

company. That enables customers to save an average of $110 on ink a year, Kodak says

on its website (Tirrell, 2009)”. Kodak is hoping that even though their printers are priced

slightly higher than that of their competitors the catch of the lower ink prices will

persuade consumers to purchase their printers.


Promotion/Advertising:

For many years the Eastman Kodak Company has relied solely one their brand

name and reputation to advertise for them. The most effective form of advertising that

the company ever had was the phrase “Kodak moment”. “The phrase “Kodak moment”

began appearing in Kodak pitches in 1961, company research indicates, in print-ad

headlines like “This Kodak moment can’t wait for Dad to get home.” It was reintroduced,

as a tag line, in the early 1990s, and trademarked again in 1992 (Elliott, 2010)”. The

commercials were a series of advertising campaigns that “established the need to preserve

‘significant’ occasions such as family events and holidays (Cambridge, 2012)”. These

significant occasions were labeled “Kodak moments” and this was an idea that became

apart of peoples everyday life. Since the Eastman Kodak Company’s target market is

women, the leading role of every “Kodak moment” commercial was cast to a woman.

These women were seen capturing memories with their families in holidays, birthday

parties, and sporting events. This ad campaign was the most successful form of

advertising that the Eastman Kodak Company has ever had.

The company’s “Kodak moment” ad campaign disappeared when digital camera

joined the market. People began to see digital cameras as electronic gadgets rather than a

camera. As a result, “The identification of cameras as gadgets brought about another

significant change: women were no longer the main customers, men were (Cambridge,

2012)”. With men being the new target market being men the era of the “Kodak

moment” quickly died. Eastman Kodak Company 4

5

Now the company had to get busy working on another ad or promotion for their

customers. They decided to begin to promote a completely different product and they

chose their printers and ink. The company began to produce high quality printers and ink

to print the photos you take on your digital camera right in your own home. The Eastman

Kodak Company noticed that their printers are priced a little higher than the printers of

their competitors. So in order to offset this difference in price, they advertised to their

customers that their ink is half the cost of their competitors; resulting in an average

savings of $110 per year on ink.


Products:

When the Eastman Kodak Company was at its prime they offered a huge selection

of different products to their consumers. They offered anything from cameras, film, x-

ray film, video cameras, ink, printers, and even print kiosks. However, since the digital

age they have slowly phased out many of those products.

Currently the Eastman Kodak Company still offers a few products to individual

consumers as well as businesses. Some of the products that it offers to single consumers

are printers and printing supplies such as ink cartridges, ink paper, 3D glasses, and

replacement parts. They also offer mobile apps to single consumers that allow them to

print straight from Facebook, and Kodak kiosks where they can print their pictures at

drug stores. Some of the products that Kodak offers to businesses are professional photo

products, motion picture film, application solutions, document imaging, and service and

support call centers where businesses can call for help with a product at anytime.

Although the company has had to phase out the majority of the products that they

once carried, they try their best to provide the best customer service. They hope that their

high quality of customer service and printing products will one day earn back their strong

customer loyalty and brand name.


Brand Loyalty:

The Eastman Kodak Company’s brand loyalty was at an all time high through the

early 1900’s as it, “played a pivotal role in popularizing photography throughout the

entire world (Bakir, 2012)”. Consumers in the photography market were extremely loyal

to the Eastman Kodak Company and bought of their products from the company. In the

early 1960’s Kodak was able to do the impossible and increase the brand loyalty they had

with their customers even more. This was all due to the extremely successful ad

campaign the “Kodak moment”. With the highest customer loyalty of any other

company, the Eastman Kodak Company began to feel invincible.

By the late 1990’s when digital photography made it into the market, Kodak

started to see a decline in their customer loyalty; they failed to enter this new emerging

market on time. Because Kodak had not produced digital cameras fast enough they either

had none on the market or the technology was not up to par with that of their competitors.

“The company failed to recognize that brand loyalty was not an everlasting feeling for its

consumers. The company has been called out as the “twentieth century corporate

dinosaur” by a number of commentators. It has been great at innovation but laggard at

translating such ideas into enduring business ventures (Bakir, 2012)”. The company

quickly lost their customers loyalty to competitors for lack of technological innovation.

The consumers wanted the latest sleek digital “gadget”, not the old chunky camera.


Reputation:

The reputation of the Eastman Kodak Company was once among the highest of all

of the top companies. They were known for their strength in innovative cameras and

film, as well as their many patents that always seemed to be in the works. However, in

the 1990’s what was thought to have been their strength seemed to disappear and the

reputation of the company took a hit. When Eastman Kodak failed to enter the emerging

market of digital cameras they watched their company’s reputation plummet as their

competitors reputation soared. “RIM and Kodak were once masters of all they surveyed;

but not any more. As their fortunes have declined, so their reputations have plummeted

(Kossovsky, 2012)”.

The sudden decline in their once amazing reputation left the Kodak Company in a

hard place financially. Their consumers started to buy from competitors and Kodak’s

operating activities were costing more than the revenue the company was making. Not

too long after this the Eastman Kodak Company slowly slipped into debt. Executive vice

president and CFO of Eastman Kodak, Robert H. Burst, addressed the company’s new

reputation of debt and not making its numbers. "My key finance managers meet every

other week. We focus on the numbers for the quarter. In the past, the company never had

daily sales numbers. Now we do (Parker, 2000)”. Unfortunately, because of this

continual loss in revenue many of the company’s shareholders began to sell their stocks.

Shareholders were selling stocks at low prices just to get out before the company incurred


any more debt that it already had. As if falling behind in the emerging digital markets

was not bad enough, the company’s reputation decreased more when stocks were selling

at an all time low.

Eastman Kodak took one more bad reputation hit in the early 2000’s. “The

Rochester, New York-based photography products maker was accused of paying black

employees less than white co-workers, passing them over for promotions and maintaining

a racially hostile work environment (Grio, 2012)”. The claims were all made between

the years of 1999 and 2005. A federal judge approved a payment of $21.4 million dollars

to the African-American employees. The 3,008 African-American employees all

received payments that ranged from $1,000 to $50,000.


Image/Quality:

When the Eastman Kodak Company first began, the image quality of the brand

was spectacular. Since they were the pioneers in the photo industry consumers thought

extremely high of them. As the years went on, Kodak continued to produce high quality

products for an affordable price. New products they released into the market always

adapted to the consumers needs and got high reviews.

Later when digital cameras were introduced into the market the unthinkable

happened. The Eastman Kodak Company’s brand image was tanking. Kodak’s

competitors were manufacturing more technologically advance digital cameras won over

a large part of the market share. “Although Kodak had embraced many me-too digital

features in its products by the mid-80’s, it’s executives could not fathom a future where

film would have no role whatsoever in image capture. Nor could they manage their

bloated business, pension obligations and executive compensation on the low profit

margins and competitive pace of a marketplace overflowing with short product cycle

technologies (Daye, 2011)”. Currently, Eastman Kodak is trying to rebuild their

company image again by emphasizing their printers, and printing services.


Market Segments:

A market segment is a term used to describe prospective buyers into groups that

have common needs and that respond similarly to a marketing action. Market

segmentation allows companies to target different categories of consumers who perceive

products and services different from each other. There are many different ways to

classify market segments including usage, age, needs, distribution channels, etc.

Kodak came out with an ad campaign called the “Kodak moment”. This as

campaign was responsible for attracting the company’s largest market segment. “As a

result of Kodak’s efforts, women went on to become the most lucrative market segment

for photography. It was that loyal contingent of “soccer moms” that funded Kodak’s

inexorable rise: they took more pictures than everyone else, printed them, shared them at

coffee mornings, saved them in albums and displayed them in the living room (Munir,

2012)”. However, women are not the only market segment that Eastman Kodak

advertises to. The Eastman Kodak Company also targets the following market segment

groups:

Adult, 30+ years of age

Active/involved

Caring about relationships

Sub-standard skills in photography

High interest of capturing images and sharing them


Environmental Analysis

This section of the strategic analysis is the environmental analysis. The purpose

of the environmental analysis is to discuss trends and events that have potential to affect

company strategy. There are several areas of an environmental analysis that help us to

determine these trends. They include, technology, government, economics,

demographics, culture, international, etc.


Customer Analysis

Target Market:

Kodak’s main target market according to chief executive officer of Eastman

Kodak Company, Antonio Perez, is soccer moms. “Soccer moms, or women with young

children who participate in sports and other activities, are a target audience because they

take and print a lot of photographs (Tirrell, 2009)”. However, many analysts are

disagreeing with what Perez is saying. Analysts believe that Kodak needs to be targeting

younger people so they can establish brand loyalty for the digital era. Spokesman Dave

Lane from Kodak responded back to this by saying, “The Company’s focus is people

who take and print a lot of photos, not really an age thing. It’s really people who print a

lot, who see value in saving money on their printing (Tirrell, 2009)”.

A survey was created in order to test the different markets and to be able to

determine the best target market for Kodak. There were 24 questions in total that asked

things like age, gender, how often you see family, what you take pictures of, how you

store your pictures, and how often you print photos. They study showed that the best

target market for Kodak was mothers from 36-55 years old. “Research reveals that these

consumers do not currently have an allegiance to any particular online photo service.

Their use of photos to create products, in addition to their underserved desire to use

digital pictures to reconnect with family, make mothers a very attractive target (American

Marketing Association, 2009)”.


The study then showed that grandparents would be the second best target market

for Kodak. Grandparents tend to have disposable income and are more inclined to spend

it on their family or family related products and services. Teens and college students

were not selected at all as a target market for Kodak. This is because teens are into the

trends of photo-sharing and social media sites online. Because they are always sharing

their photos online to their friends and family they have no need to print their photos. So

according to the study CEO, Antonio, Perez, is correct on his view of Kodak’s best target

market and the analysis were wrong.


Brand Loyalty:

Brand loyalty is when a customer becomes committed to a specific brand and will

make repeat purchases of products or services from that same brand. This is a result of

consumer behavior and is affected directly by a person’s preferences. Loyal customers

will continually purchase products or services from their preferred brands no matter the

price or convenience of the products. Many companies use marketing strategies to attract

loyal customers by using incentives and rewards programs.

When the Eastman Kodak Company first began back in 1880 its brand loyalty was

among the strongest of any business at that time. “Eastman Kodak has built its brand

loyalty since 1888 when George Eastman produced the first camera that simplified the

complex process of photography and made it available to everyone. Since then, Kodak

has pioneered many new products to numerous markets for a multitude of reasons:

pleasure, business, medical, scientific, and entertainment. (Anna, 2006)”. Kodak

continued to be the leader in brand loyalty until the digital trend came into action.

When digital cameras came to light in the early 2000’s Kodak’s brand loyalty

started decreasing. Their main driver of revenue was being shut down and consumers

wanted to have the latest technology in their cameras. Now, Eastman Kodak’s brand

loyalty is slim to none. They waited too long to get into the digital age and consumers

had already become loyal to other brands who entered the digital market at the right time.


Customer Motivation:

The Eastman Kodak Company tried to motivate their customers in many different

ways such as customer service and support, pricing, convenience, ease of use, and

technology. Eastman Kodak offers a wide variety of different ways their customers can

get the help they need. On their website they offer their number to customer support to

talk to a live representative, FAQ’s and answers, an email address to ask specific

questions about one of their products, and even a live chat option.

Kodak products are generally priced lower than that of its competitors, with the

exception of printers, so that makes it more appealing to consumers looking to purchase.

“ Kodak printers sell for 15 percent to 35 percent more than competitors such as those

from Hewlett-Packard and while the ink costs about half as much, according to the

company. That enables customers to save an average of $110 on ink a year, Kodak says

on its website (Tirrell, 2009)”. The convenience of these products is also great since you

can find the Kodak product that you are looking for at any local Wal-Mart, Target, Best

Buy, etc. And Kodak’s easy to use technology makes it possible for virtually anyone to

use the products they offer.

The only section in customer motivation that I see Eastman Kodak lacking in is

the technology. Since they arrived late into the digital age the technology used in their

products is not as advanced as the technology in the products of their competitors. This

is where we can see a slump in customer loyalty and motivation.


Unmet Needs:

The main unmet need for the Eastman Kodak Company was when it moved into

the digital camera market. They were already late in the game so they had to work fast to

get a product out into the market. When Kodak’s digital cameras started to enter the

market customers noticed that the technology in the products was lacking in comparison

to their competitors. In response to this Kodak began doing research to determine what

the best market to advertise to would be. They found that this market would be women

who love taking pictures of their families but get frustrated when they try moving the

pictures into their computers. They used this unmet consumer need to their advantage

and created EasyShare. “One of their key innovations was a printer dock, where

consumers could insert their cameras into this compact device, press a button, and watch

their photos roll out (Eastman Kodak)”.


Competitor Analysis

The competitor analysis is a fundamental part of a company’s corporate strategy.

It assesses several areas of the competitors company such as what drives them, what they

can do and are doing, what they believe about the industry, and what their capabilities are

as a company. When examining the competitors of Eastman Kodak Company all of these

factors will be taken into consideration along with the cost difference and performance of

their competitors as well. This competitor analysis will provide information that will

help to identify any threats that competing companies have on Eastman Kodak as well as

what Eastman Kodak is doing that is above and beyond its competitors.

Eastman Kodak’s top three competitors are FUJIFILM, Sony Corporation, and

Hewlett-Packard Company. These three companies vary in products that they compete

with the Eastman Kodak Company, but they are all major competitors. FUJIFILM is

Eastman Kodak Company’s main competitor. They were established in 1934 in Japan

with the aim of producing photographic films. Over the decades they have diversified

into new markets and have built a strong presence around the globe.

FUJIFILM now specializes in the following business fields:

Imaging Solutions:

Color Films

Electronic Imaging

Color Paper and Chemicals

Photofinishing Equipment


Labs and FDi Services

FUJIFILMS imaging solutions began when Japan was on a mission to make their

first motion picture film. Since then they have developed into producing single-use

cameras, instant photo cameras, and digital cameras. They later evolved their cameras to

have sophisticated technology, making the pictures taken with their camera to be clear

and focused on faces using face detection. FUJIFILM has also made it easy for

consumers to get professional prints fast and easy with their digital minilab photo kiosks

at retail locations all over.

Information Solutions: Eastman Kodak Company 6

1

Medical Systems

Life Science Systems

Highly Functional Materials

Optical Devices

Graphic Systems

Recording Media

Industrial Products

The imaging solutions business field helped them to excel in their business mainly

through their pioneering of diagnostic imaging technologies. FUJIFILM expanded into

areas of preventative healthcare and treatment. They became the leader in digital x-ray

diagnostics, by using instantly accessible medical imaging and endoscopes.

Document Solutions:Eastman Kodak Company 6

2

This segment is operated by Fuji Xerox Co., Ltd.

This segment by FUJIFILM encompasses office copy machines, multifunction

devices, printers, production systems and services, paper, consumables and office

services.

Hewlett-Packard Company is another major competitor of Eastman Kodak. They

provide consumers with laptops, desktops, printers, servers, and more. The company was

founded in 1939 by Bill Hewlett and David Packard. Hewlett-Packard Company strives

to earn customer respect and loyalty by consistently providing the highest quality and

value possible. They achieve sufficient profit to finance growth or the company, and

crate value for the shareholders to continually achieve their corporate objectives.

Hewlett-Packard also aims to be a market leader by seizing opportunities for growth and

delivering useful and innovative products to their consumers.

Sony Corporation was founded in Tokyo, Japan in May of 1946. They currently

have approximately 162,700 employees working for them worldwide. Sony’s main

products consist of televisions, digital imaging, audio/video, PCs and other networked

products, semiconductors, electronic components, professional solutions, and medical-

related equipment. Sony Corporations mission statement states, “Sony is committed to

developing a wide range of innovative products and multimedia services that challenge

the way consumers access and enjoy digital entertainment. By ensuring synergy between

businesses within the organization, Sony is constantly striving to create exciting new


worlds of entertainment that can be experienced on a variety of different products (Sony

Company Profile)”.

Competitors Strengths:

Next we will identify the three major competitors strengths of Eastman Kodak to

better understand their potential and to become aware of any threats these strengths may

have on Eastman Kodak.

FUJIFILM’s main strength is in their imaging section of their company. In the

1980’s they started to sell rolls of film at a dramatically lower price than Eastman Kodak

was. Because of this FUJIFILM took over Eastman Kodak’s biggest market “ Fuji’s

willingness to cut prices was quite popular with the rapidly growing mass merchandisers

like Wal-Mart (WMT) that preferred to deal with suppliers who were willing to sell high

volumes at ever-lower prices (Cohan, 2011)”. Eastman Kodak took a big hit in 1999

form mass merchandisers purchasing from FUJIFILM instead of them resulting in the

layoff of nearly 20,000 employees and a $1.2 billion charge. This same thing happened

again in 2009 with a $350 million charge and a layoff of 3,500 employees.

Hewlett-Packards strengths come from high-performance computing.

They are the only vendor that excels in three principal types of computing: work-group

computers for offices; enterprise computers for home and personal use; and

supercomputing, used in high-tech industrial and government systems. “ Due to these

many decades of evolution, as technology grew in our culture, country and world, HP has

experienced in all aspects of electronic design and construction, having made and sold


just about every type of high-performance technological product on the market. This

type of legacy and trust makes HP a mainstay in the technological game for consumers

and investors alike (Westlake)”. Although Hewlett-Packards main focus is on

computers, they directly compete with Eastman Kodak in the printing business with their

high quality photo printers. Their customers are so loyal because of their high-

performance computers that the halo effect applies to their printers.

Sony Corporations key strength is in its electronics business and in continually

striving to gain market leadership in their areas of televisions, digital imaging, home

video equipment, and portable audio. To attain these strengths they use three main

initiatives:

1. The customer viewpoint initiative emphasizes the importance to staff of

viewing Sony, its products and services from a customer perspective.

2. The technology Nr. 1 initiative focuses on reinforcing Sony’s cutting-edge

technologies in the areas targeted for maximum investment of resources

including televisions, home video equipment, digital imaging equipment

and Walkman.

3. The ‘Genba’ initiative aims at having strong frontline operations such as

design locations, manufacturing facilities and sales offices.


Market Analysis

Market Size:

The current size of the Eastman Kodak Company’s market is significantly smaller

than what it used to be when it was at its prime. The size of their market was enormous

for many reasons. They had been the pioneers of the camera and film industry, which put

them ahead of their competitors. They also manufactured many different products in

several markets such as products that catered to the average person, families, businesses,

and even manufactured medical supplies such as x-ray machines and film.

When digital cameras came into the market the size of their market decreased.

Kodak had not begun producing digital cameras until their competitors already had

digital cameras on the market. Because of this many of Kodak’s loyal customers started

buying from competitors of Kodak. By the time Kodak had put digital cameras on the

shelf their competitors already had innovated their cameras and the consumers stuck with

the competitors.

Currently the market size of the Eastman Kodak Company is very small. Since

the phasing out of the majority of their products such as digital camera, etc. the only

market Eastman Kodak can keep their customers in is their printers and ink cartridges.


Market Growth Rate:

Eastman Kodak’s market growth rate has been constantly decreasing along with

its market share. Kodak went from having 76% market share down to now 70%. Along

with this loss in market share the Eastman Kodak Company is only having a 3% annual

growth rate, while its competitors such as FUJIFILM are growing at a rate of 15%

annually. “Consumer inkjet printers, is where Kodak has outpaced overall market growth

for several years. Kodak consumer inkjet printers provide consumers with high-quality

output and the lowest total ink replacement cost. Consumers can send documents and

photos to Kodak printers from anywhere, using any web-connected device (Eastman

Kodak)”. As a result of Kodak phasing out of the majority of their products, we can

assume that the market growth rate will continually decrease year after year.


Market Profitability:

This section will discuss the market profitability of the Eastman Kodak Company.

Market profitability is the potential to make money in a market based on the

attractiveness of the market. To determine the markets profitability we will use Porter’s

five forces; buyer power, supplier power, barriers to entry, threat of substitute products,

and rivalry among firms in the industry.

The buyer power over the Eastman Kodak Company is high. “Eastman Kodak is

entering the consumer printer market which is full of competitors who produce products

that allow the consumer to have significant buying power (Denver, 2012)”. Companies

in the consumer printer market are manufacturing quality printers at affordable prices and

providing rebates with them. This is what gives the buyers so much power.

The supplier power to Eastman Kodak is just as high as that of the buyer power.

Unlike its competitors, Kodak does not make its own printer parts from scratch. They

buy off the shelf parts from suppliers and put those pieces together to produce a Kodak

printer. Having to rely on the suppliers for the parts for the printer gives the suppliers

great buying power. Although buying parts from a supplier is risky, it could benefit

Kodak in the long run because of the rate at which they can produce their printers. It is

much faster than that of their competitors.


The entry of a new company would be very difficult to accomplish in the market

that Eastman Kodak is in. “The entry of competitors is always an issue when dealing

with new technology. Often, new technology is developed by an individual looking for a

better way to do something. The problem for these individuals is being able to become a

viable player due to limited capital and positioning to enter the market (Denver, 2012)”.

The Eastman Kodak Company needs to keep researching on the latest technologies of

their market. If they do not, it would make it easier for a new company to enter into the

market.

The threat of substitute products is very high in the consumer printer market.

Eastman Kodak is competing with companies such as Hewlett-Packard and Lexmark,

who make the same quality of printers as they do. Where Eastman Kodak jumps ahead

in their market is where their competitors cannot copy their product. This is in the ink

cartridges. Kodak offers more affordable ink cartridges than Hewlett-Packard and

Lennox. The only concern that Kodak should be worried about in the future when it

comes to substitute products is replacement ink cartridges from their competitors.

“Of the five forces, rivalry among competitors could be the most significant. As

with most technology, change is fast and furious. The play for more shelf space, bundling

of printers with the computers, discounts, and rebates makes this market extremely

competitive (Denver, 2012)”. Kodak’s CEO, Antonio Perez, says that Kodak and

Hewlett-Packard have no special rivalry going on but the market shows something


different. With Eastman Kodak and Hewlett-Packard being the largest companies in

consumer printers it is only evident that there is a rivalry among the two.

Industry Cost Structure:

In the early 2000’s the Eastman Kodak Company began to experience a net loss in

their financial statements. As a few years passed and the company saw no difference in

the constant decline, Kodak decided to rethink their business strategy. In February of

2009, a statement was released by CEO Antonio Perez that stated “We see no immediate

signs of economic recovery, so we are taking steps to address this by focusing investment

in our core digital technologies, optimizing our portfolio of cash-generating business, and

restructuring the company to further reduce our cost structure (Corporation)”.

Eastman Kodak plans to reduce the cost structure by cutting on operating

expenses. They will slowly begin to phase out products that make no revenue for the

company. Kodak will only continue to manufacture the products that make a profit,

which are inkjet printers. By not having to manufacture so many products the cost for

materials and transport to distribution centers will decrease dramatically.

Currently the Eastman Kodak Company is in debt and they are still trying to break

even. The company has hopes to one-day escape from all the debt they have incurred,

and become one of the top companies in the industry once again.


Distribution Channels:

The Eastman Kodak Company’s distribution channels are similar to that of their

competitors. The main distribution channel Kodak uses in in department stores. It is in

these department stores where you can find Kodak’s most frequently selling products,

printers and ink cartridges. The other two larger distribution channels are drug stores,

and camera shops. Here you can find film for non-digital cameras, disposable cameras,

and printing kiosks to print your photos in store.

The least popular distribution channels for the Eastman Kodak Company are

supermarkets/convenience stores, wholesale clubs, mail orders, or other small

venues/vendors. As Kodak begins to phase out the cameras and film they will have to

solely rely on department stores as their main distribution channel because printers and

ink cartridges will be the only products the company will be producing.


Market Trends:

Market trends are an extremely useful part of the external analysis. They tell a

company what is important to its consumers and focuses on change. The biggest trend

that is on the market is technology and smart phones. Consumers fell in love with the

technology of the smart phone because of how easy it makes things for the consumers do

it. Practically everything can be done from a smart phone; emails, music, pictures, social

media, etc.

Eastman Kodak took this technology trend into consideration and came up with a

way they could incorporate it into the products and services they offer. What would

make it easy for people to share information quickly with each other? Kodak answered

this with their multiple channel communications system. “The most successful

communication strategies are those that deliver targeted, coordinated messages across

multiple channels, including e-mail, the web, and personalized print. These campaigns

require strategic market intelligence to identify who to communicate with, which tightly

defined market segments matter most, and what message is most effective for each

segment (Services K. M.)”. By using “Kodak MarketMover” companies can hire Kodak

as a third party to market to the hiring company’s consumers through multiple


communication channels. The Eastman Kodak Company hopes the speed and ease at

which advertising can go through multiple channels will become just as large of a trend

as the speed and ease of smartphone technology is.

Key Success Factors:

A key success factor is any competitive asset or competence that is needed to win

in the marketplace. The largest key success factor the company has is their brand name.

Since the company first opened back in the late 1800’s, they were busy building up one

of the strongest brand names a company could only dream of. Kodak pioneered the first

cameras and film that was available for single consumers to purchase. Being the only

camera manufacture on the market they controlled 100% of the market share and also

earned 100% brand loyalty from their consumers. Control over the market share, and

brand loyalty combined created the strong brand name Eastman Kodak is known for

today.

The second largest key factor Kodak has is in its printing services. Kodak has

thousands of printing kiosks worldwide where consumers go to print their digital photos.

Kodak is the leader is photo prints over any other company in the market. This is

because of two reasons. One is because of brand loyalty and repeat customers, and the

other is because of the high-quality prints that are produced.

Being able to adapt to consumers needs is another success factor of the Eastman

Kodak Company. Being able to adapt products to consumer needs is extremely


important especially in a technological market. Kodak’s ability to innovate products to

satisfy the consumer needs is what keeps brand loyalty so strong and allows the company

to stay afloat.

Legal:

Legally as a company Eastman Kodak has a duty to uphold certain standards and

regulations for the environment. If any of these standards or regulations are ignored, then

the company could be held in court and fined for the damage done to the environment.

Eastman Kodak’s environmental goals were to reduce emissions, conserve natural

resources, and reduce energy usage. In an effort to make progress on reducing its impact

on natural resources, Kodak started to focus on the Genesee River, which runs past the

end of a company factory. “Our focus is on preventing waste from being generated in the

first place rather than simply putting better controls on the wastes as they pass through

our wastewater treatment plant. (Due to the nature and size of our operations, we are the

only company along the Genesee River to operate our own wastewater treatment plant.)

Nitrates, a relatively non-toxic material, comprise most of Kodak’s water discharges. The

amount of nitrates in Kodak’s wastewater discharges are within the drinking water

standard (Kodak, Enviornmental Responsibility)”.

However, in 1990 the Eastman Kodak Company admitted to two violations of

anti-pollution laws and was fined $1.15 millon. “Kodak paid an additional $1 million


civil penalty to the State Department of Environmental Conservation for violating air-

emission and water-quality standards. The company agreed to an extensive

environmental review and cleanup at Kodak Park, its seven-mile-long film manufacturing

site here, under a civil consent order (Hanley, 1990)”.

Political:

The Eastman Kodak Company fells very strongly about being a responsible

corporation in respect to political means. “It is the policy of Kodak to advance the

Company’s business and public policy interests through legally permissible participation

in the political process where appropriate. The Company maintains a nonpartisan

political position, meaning that it takes positions on issues and may, therefore, support

candidates, regardless of party affiliation, whose philosophies or positions on issues are

consistent with the Company’s business goals and objectives. Any and all political

expenditures reflect the interests of the Company as a whole, not those of its individual

officers, directors or employees (Kodak, Corporate Political Contributions and

Expenditures Policy)”.

Also as part of the Eastman Kodak Company all employees are required to follow

the terms of the company’s business conduct guide. This conduct guide holds the

employees up to the highest ethical standards. With the Company itself holding high

standards in political aspects and the employees holding high standards in ethical

situations, the Eastman Kodak Company can maintain its strong brand name.


Social:

The Eastman Kodak Company likes to pride themselves on their social

movements in the community. They assist hundreds of schools, non-profit organizations,

and service agencies all over the world, but they mainly focus on areas where a large

number of their employees live and work. Some of the support the Kodak offers to their

communities are:

Providing corporate support to the United Way of Greater

Rochester, in addition to ongoing contributions by thousands of

Kodak employees

Philanthropic contributions to area museums, cultural facilities, and

major performing arts organizations

Furnishing value-in-kind contributions of products, services, and

surplus equipment to educational institutions, from area colleges to

primary- and secondary- education schools

Volunteer participation in community events at which Kodak

employees can showcase our digital imaging technologies.

One way Kodak recently gave back to the community was back in June of 2012.

Volunteers from Kodak went to lend a helping hand in the 10th annual Race for the Cure

in Buffalo, New York. “Cancer survivors and their family members gathered for race-

day snapshots, which volunteers then printed using a Kodak Picture Kiosk. The event is

an annual fundraiser organization by the Western New York Affiliate of Susan G. Komen


for the Cure. With the Help of Eastman Kodak the fundraiser was able to raise more than

$400,000 to fight and prevent breast cancer.

Eastman Kodak would love to help out in many more community outreach

programs but they know that it is impossible to do so. However, they do encourage

requests for charitable help by all as stated in their website. “While no company can

support every worthwhile opportunity presented, we are mindful of the need to contribute

to the renewal and cultural fabric of our communities. We review each request we receive

by post mail, and evaluate our involvement based on Kodak’s resources, priorities,

corporate citizenship, and marketing segments (Kodak, Community Affairs Initiatives)”.


Economic:

The recent and upcoming threats of the economic trends are only adding onto the

downfall of the Eastman Kodak Company. A few key economic trends that are hurting

Kodak is the rising unemployment rate, inflation, and exchange rates in foreign countries.

The Unemployment rate in developed countries averaged at 8.6% in 2011, with the

United States at a steady average of around 9% since 2009. “Unemployment tends to

have significant long-lasting detrimental impacts on both the individuals who have lost

their jobs and on the economy as a whole (Nations, 2012)”. With consumers not having

jobs they cannot go out and buy material items such as the products Eastman Kodak is

selling.

Inflation is another economic trend that is currently hurting the Eastman Kodak

Company. Inflation is an increase in the average price of goods and services, not

including wages that goes uncompensated by increases in income. The inflation rate in

the United States has steadily been rising since August of 2012. With the combination of

the current state of unemployment and inflation we can only see threats coming towards

Eastman Kodak in the future.


Demographics:

Demographic trends have a strong and sometimes predictable influence in the

market. Things such as age, income, education, ethnicity, and geographic location are

just some of the demographic variables that can weigh on a market. Traditionally the

Eastman Kodak Company demographic is known to be women with families. Since the

company started producing their first cameras they always advertised using the “Kodak

Moment”. This saying was used to attract mothers into wanting to save special moments

with their families but using a Kodak camera to capture it. This “Kodak moment”

marketing campaign made mothers with families Eastman Kodak’s largest demographic

for many years.

In 2010 Kodak created a new camera called the EASYSHARE. This camera was

unlike anything Kodak had ever introduced to the market before. The EASYSHARE was

think, sleek, and allowed consumers to instantly upload and share their pictures to social

networking sites. With all these new innovations made to the camera, Eastman Kodak

decided to being marketing to a different demographic than it typical markets too. “From

a marketing standpoint, Kodak is typically known as the camera that young mothers use

to capture warm and fuzzy moments of their children and share them online to other

family members. But now the company is taking a whole new direction with these stylish

and edgy ads to target younger and trendier consumers, which happen to be the most

active demographic when it comes to sharing images digitally through social networking


(Hutson, 2011)”.

To market to their new demographic Kodak launched a series of commercials that

featured celebrities that younger and trendier consumers would be attracted to. The

commercials featured Pitbull, Drake, Rihanna, and Trey Songz. The celebrities were

filmed living the glamorous life of a young hip celebrity at fashion shows, on a tour bus,

in the studio, or their high-rise apartment. “While we’re used to seeing these artists and

their jet-setting lifestyles on a continual basis, we’re not used to seeing them featured to

promote a century old brand. These artists are part of Kodak’s new M5 90 EASYSHARE

digital camera campaign. The whole point of these commercials is to highlight the

exclusive Share Button feature of these new cameras (Hutson, 2011)”. Although Kodak

tried hard to successfully sell a new product and tap into a new demographic, both plans

eventually failed.

Now that Kodak has phased out most of their products including all cameras and

film, the demographics of the company has changed again. According to Lexicalist, a

demographic dictionary, Eastman Kodak’s main demographic are males within the ages

of 45-65 years old. This could be because the only products Eastman Kodak now

manufactures are printers and ink cartridges, which traditionally the male would

purchase. Males make up 65.7% of the demographic while women only make up 34.3%.

Consumers in the age range of 45-54 years old make up the majority of the demographic


at 17.7%, 55-64 year olds follow closely behind at 16.8%, and consumer’s ages 65 or

older are the third largest with 15.7%.


Technological:

The Eastman Kodak Company isn’t exactly known for their technological

advances ever since digital cameras hit the market. However, now they are trying to

reverse that image now. Kodak has begun pushing their printers and ink jet cartridges in

advertisement rather than their cameras. This is because they are now focusing on the

latest technology in printers and ink rather than the technology in digital cameras.

Currently Eastman Kodak has five different types of printer technology; dye-

sublimation, inkjet, laser, solid-ink, thermal-wax. Out of these five printers the one that

Kodak focuses its technology research on is the inkjet printer. “Inkjet printing is a much

more sophisticated and versatile imaging technology than most people might imagine.

This technology can be applied to almost any size surface - from postage stamps to

building wraps. New applications are identified every day (Kodak)”. They chose the

inkjet printer because it directly relates to Kodak’s main target market of mothers These

high quality printers are easy for the whole family to use, and the price for ink is a very

low cost per page. With Kodak’s technological research and innovation on inkjet printers

it makes it ideal for mothers to purchase and use.


International:

The Eastman Kodak Company offers many helpful services internationally to their

customers all over the world. “KODAK Service & Support is one of the largest, most

experienced service organizations in the industry. Whether you are a Manufacturer in

need of a service organization or a reseller or business looking for a service organization

to support your mix of scanners, storage, or servers from different manufacturers, Kodak

can be your single point of contact for service, with your budget in mind (Services)”.

Kodak offers products such as printers, scanners, kiosks, and processors, maintenance

services, support services, conversion services, and imaging services.

Kodak first went international in 1891 when they opened their first manufacturing

site in Harrow, London. At this time London was in a booming photography market, so

Kodak rushed there to take advantage of the opportunity. After, its first move to an

international market Eastman Kodak quickly began expanding their company into several

other countries. Now, the Eastman Kodak Company can be spotted in thousands of

service locations all over the world. The locations are listed here below:

Americas Region

CanadaVancouver, Victoria, Edmonton,

Calgary, Saskatoon, Regina, Winnipeg, Quebec, Montreal, Ottawa, Toronto, Halifax

USA

European Region (all major cities)

• Finland• Norway• Sweden• Denmark• Holland• UK, including Ireland


All Major CitiesLatin America Region

• Argentina◦ Buenos Aires, La Plate, Mar del

Plata, Cordoba, Mendoza, Nuequen

• Brazil◦ São Paulo, Rio de janeiro, Recife,

Brasília, Belo horizonte, Curitiba, Porto alegre. Outras cidades sob consulta.

• Columbia◦ Bogota, Cali, Medellin, Barranquilla,

Pereira• Venezuela• Chile• Uruguay• Montevideo• Peru• Lima• PuertoRico◦ San Juan Metro, Bayamon, Caguas,

Carolina, Guaynabo, Ponce, Trujillo Alto, Mayaguez, Arecibo, Aguadilla, Guayama, Huamacao, Fajardo, US Virgin Islands

• Panama◦ Ciudad de Panama• Mexico◦ Mexico City (D.F.), Monterrey,

Guadalajara, Ciudad JuarezJapan

• Sapparo• Tokyo• Nagoya• Osaka• Fukuoka

• Belgium, including Luxembourg• France• Switzerland• Austria• Germany• Italy• Portugal• Greece• SpainGreater Asia Region

• Australia◦ All major cities, including

Sydney, Melbourne, Perth, Brisbane, Canberra, Adelaide, Tasmania (Hobart & Devonport)

• New Zealand◦ Auckland, Wellington,

Christchurch• Singapore• Malaysia• Thailand◦ Bangkok• Korea◦ Seoul, Pusan, Taejon• Philippines◦ Manila, Cebu, Davao• India◦ Madras, Mumbai, Delhi,

Calcutta• Taiwan◦ Taipei• Hong Kong• Indonesia• Jakarta• PRC (China)Eastern Europe, Middle East, Africa

• Service provided by a KODAK Authorized Document Imaging Service Provider


SWOT Analysis Chart

Strengths Weaknesses

Brand name

Intellectual property portfolio

Assets

Printing Business

Management

Business restructuring

Digital film business

Innovation

Diversity

Opportunities Threats

New technology

Emerging markets

New products

New markets

Competition

Economy

Product substitution

Exchange rate fluctuation

Cheaper technology


Goals and Strategies

Goals and strategies are extremely important when it comes to a company’s

future. A company’s goals and strategies should be based on issues or risk that could be

affecting the company. After going over the sections in this strategic analysis we can

identify the areas that the Eastman Kodak Company will need to set new goals and come

up with new strategies for.

Based on all of the information gathered I have come up with three goals along

with strategies that I feel would be beneficial to the revival of the Eastman Kodak

Company. The first strategy that I would implement would be to cut down on the

company’s operating activities costs; this would have to include the phasing out of some

of Kodak’s not so successful products. The second would be to upgrade the technology

of its digital devices and advertise to their target market and loyal customers of the new

advances. Then my last and final recommendation would be to try and sell the company

to a similar company that is thriving to try and escape as much debt as possible later on

down the road.


Goal #1:

Lower the cost of the company’s operating activities by phasing out products with

hopes to start creating a net income.

Strategy #1:

In order to achieve the first goal of cutting back on costs, the Eastman Kodak

Company should begin with stepping out of some of the markets that they currently hold

themselves in. While Kodak has many different products out, not all of the products that

they produce become profitable to them. The market that I would suggest to Kodak to

leave would be the digital market. This would include any digital camera, video camera,

and digital picture frames. I believe that The Eastman Kodak Company waited too long

to begin manufacturing digital devices when they first came on the market. I also believe

that this is what eventually led to the downfall of the company as a whole.

By discontinuing these products Kodak will be able to focus on the products that

are still thriving in their company such as the online photo printing, retail photo printing,

and desktop inkjet printing. With Kodak having fewer products to produce, the cost of

their operating activities will decrease. When operating activities start decreasing then

we will be able to see the net income increase and start converting into cash again like it

should be, and was when the Company first began. Then over time with positive net

incomes the Eastman Kodak Company could start paying off their debts.


Goal #2:

Upgrade technology on all digital devices to directly compete with the quality of

the competitors and advertise to the target market/loyal customers of the new

technological advances.

Strategy #2:

Accomplishing goal number two may be a long and hard path for Kodak to take,

but it could be very worth it in the long run. If the company begins to invest more into its

digital cameras, video cameras, and digital frames then they could come out with new

products that can compete with the products of their competitors. The problem Kodak is

having with their digital devices is that they are not as high of quality compared to the

other products on the market. I believe that with products that will be able to compete on

the market the Eastman Kodak Company can have a chance at revival and possibly be

back on top once again.

After they come out with the new advanced technology Kodak should begin to

advertise these advances to their target market and loyal customers. Since The Eastman

Kodak Company used to be the leader in their market, I do not think they would have any

trouble gaining new loyal customers, or winning back customers that left them when the

digital age rolled around.


Goal #3:

The Eastman Kodak Company should sell the company name off along with all of

its assets in hopes to escape from the company’s debt.

Strategy #3:

My third and final strategy for the Eastman Kodak Company would be to sell off

the company. By looking at the financial statements of the company for the past few

years we can tell that there has been a pattern of net loss. This pattern is only sending

Kodak further and further down into debt. If no other strategies would work in order to

save the once iconic company’s name then the best thing to do would be to try and sell

the company name for what it is currently worth, and along with the company name sell

its assets too. By selling the Eastman Kodak Company’s name and assets that could give

the company enough money to pay off all the debts that it has incurred over the past few

years from net losses.


Summary/Recommendations

In conclusions of the strategic analysis done on the Eastman Kodak

Company we can determine the over position of the company. After looking at the

financial statements of the company we can see a constant decline in revenue and net

income while the operating activities such as materials, distribution, and advertising

continue to rise. Operating activities are rising for Kodak because of the poor economy.

With little money circulating in the economy and the steady high unemployment rate,

inflation in the United States rises. Because of inflation materials, and gas used to

distribute the products become more expensive for the company to purchase.

From the environmental analysis we can see the main problem the Eastman Kodak

Company is having is no innovation in digital devices and a loss of market share along

with customer loyalty. When digital devices such as cameras and video cameras first

entered the market, Kodak’s choice to take a backseat on them and continue with the “old

school” cameras would come back to bite them. While they did manufacture some

digital cameras, the technology and innovation of their competitors greatly out did theirs.

With Kodak’s competitors putting higher technology cameras on the shelf, consumers

quickly and without a doubt became loyal to the competitors.

Taking all of these facts into consideration I have come up with one main strategy

that I believe can be crucial to the revival of the Eastman Kodak Company. Kodak

should being to phase out products that no longer are making them a profit to reduce

operating costs in hopes to regain a net income. The products to begin phasing out would


be what eventually lead to the fall of the once iconic company, digital devices. These

digital devices include all products such as digital cameras, video cameras, and digital

frames.

By discontinuing these products Kodak will be able to focus on the products that

are still thriving in their company such as the online photo printing, retail photo printing,

and desktop inkjet printing. With Kodak having fewer products to produce, the cost of

their operating activities will decrease. When operating activities start decreasing then

we will be able to see the net income increase and start converting into cash again like it

should be, and was when the Company first began. Then over time with positive net

incomes the Eastman Kodak Company could start paying off their debts. I believe that if

the Eastman Kodak Company implements this strategy they will be able to pull out of

their debts and revive the company to what it once was.


References

All, A. (2008, 5 1). HR Ooutsourcing Helps Kodak Get Hiring in Focus.

Retrieved 11 4, 2012, from IT Business Edge:

http://www.itbusinessedge.com/cm/blogs/all/hr-outsourcing-helps-kodak-get-

hiring-in-focus/?cs=10354

American Marketing Association. (2009). Kodak Gallery: The Next Generation.

Retrieved 11 11, 2012, from Marketing Power:

http://www.marketingpower.com/Community/collegiate/Documents/FY12%20Do

cuments/KodakCase33.pdf

Anna. (2006, 5 17). Kodak Marketing. Retrieved 11 12, 2012, from Write Work:

http://www.writework.com/essay/kodak-marketing

Bakir, I. (2012, 2 20). Peckin' on Kodaks Nostalgia. Retrieved 11 3, 2012, from

The College Voice: http://thecollegevoice.org/2012/02/20/peckin-on-kodaks-

nostalgia/

Benefits, K. C. (n.d.). Compensation & Benefits. Retrieved 11 13, 2012, from

Kodak:

http://www.kodak.com/ek/US/en/Our_Company/Careers_at_Kodak/Why_Join_K

odak/Compensation_and_Benefits.htm

Berman, B. (1997). Adding Value Through Human Resources. Retrieved 11 13,

2012, from Deep Blue:

http://deepblue.lib.umich.edu/bitstream/2027.42/34580/1/4_ftp.pdf


Cambridge, U. o. (2012, 3 14). The rise and fall of Kodak's . Retrieved 11 24,

2012, from University of Cambridge Research Features:

http://www.cam.ac.uk/research/features/the-rise-and-fall-of-kodaks-moment/

Cohan, P. (2011, 10 1). How Success Killed Eastman Kodak. Retrieved 11 2012,

from Forbes: http://www.forbes.com/sites/petercohan/2011/10/01/how-success-

killed-eastman-kodak/

Corporation, N. (n.d.). Kodak sharpens focus, plans leaner cost structure.

Retrieved 11 2, 2012, from Reliable Plant:

http://www.reliableplant.com/Read/15757/kodak-sharpens-focus,-plans-leaner-

cost-structure

Daye, D. (2011, 12 6). Branding Management: The Last Kodak Moment?

Retrieved 11 2, 2012, from The Blake Project:

http://www.brandingstrategyinsider.com/2011/12/brand-management-the-last-

kodak-moment.html

Denver. (2012, 1 10). Kodak External Analysis. Retrieved 11 24, 2012, from

Business Papers:

http://essaysforstudent.com/essay/Kodak-External-Analysis/39742.html

Eastman Kodak. (n.d.). Retrieved 11 12, 2012, from Wikipedia.

Elliott, S. (2010, 4 25). Modernizing the "Kodak Moment" as Social Sharing.

Retrieved 11 24, 2012, from The New York Times:

http://www.nytimes.com/2010/04/26/business/media/26adco.html


Fowlkes, M. (2007, 2 8). More bad news for Kodak employees. Retrieved 11 13,

2012, from Daily Finance: http://www.bloggingstocks.com/2007/02/08/more-bad-

news-for-kodak-employees/

FUJIFILM. (n.d.). Business Fields. Retrieved 11 7, 2012, from FUJIFILM:

http://www.fujifilm.com/about/profile/business_fields/

Grio, T. (2012, 9 3). Judge approves Kodak settlement of racism lawsuit.

Retrieved 11 3, 2012, from The grio: http://thegrio.com/2010/09/03/judge-oks-

kodaks-settlement-of-race-based-lawsuit/

Hanley, R. (1990, 4 6). Eastman Kodak Admits Violations of Anti-Pollution Laws.

Retrieved 11 26, 2012, from New York Times:

http://www.nytimes.com/1990/04/06/nyregion/eastman-kodak-admits-violations-

of-anti-pollution-laws.html

Hutson, B. (2011, 1 20). Behind Kodak's Hip-Hop Insired Marketing Campaign.

Retrieved 11 7, 2012, from Madame Noire:

http://madamenoire.com/107195/kodak-gets-an-image-booster-from-hip-hop’s-

hottest-stars/

Kodak. (n.d.). Community Affairs Initiatives. Retrieved 11 26, 2012, from Kodak:

http://www.kodak.com/ek/US/en/Global_Sustainability/Community_Affairs/

Community_Affairs_Initiatives.htm

Kodak. (n.d.). Corporate Political Contributions and Expenditures Policy.

Retrieved 11 26, 2012, from Kodak:

http://files.shareholder.com/downloads/EK/2159819155x0x558909/BF8B277A-

AF88-4EED-B0BD-412D64B900D8/Political_Activity_Policy.pdf


Kodak. (n.d.). Enviornmental Responsibility. Retrieved 11 26, 2012, from Kodak:

http://www.kodak.com/US/plugins/acrobat/en/corp/HSE/issuesandchallenges.pdf

Kodak. (n.d.). Life at Kodak. Retrieved 11 13, 2012, from Kodak:

http://www.kodak.com/US/en/corp/careers/life/newindex.jhtml?pq-

path=2217/923/10672

Kodak Monitoring, V. a. (n.d.). Monitoring, Verification and Mitigation.

Retrieved 11 13, 2012, from Kodak:

http://www.kodak.com/ek/US/en/Global_Sustainability/Governance/Monitoring_

Verification_and_Mitigation.htm

Kodak. (n.d.). Printing Technologies. Retrieved 11 25, 2012, from Kodak:

http://www.kodak.com/US/en/corp/researchDevelopment/whatWeDo/technology/

inkjet.jhtml?pq-path=9861/9868

Kossovsky, N. (2012, 1). Reputation for innovation lost. Retrieved 11 3, 2012,

from I Am Magazine: http://www.iam-magazine.com/Issues/Article.ashx?

g=7d8d3634-4bcd-43c3-b6a8-27602601165e

Munarriz, R. (2012, 1 19). Eastman Kodak: This Stock Probably Going to Zero.

Retrieved 11 11, 2012, from Daily Finance:

http://www.dailyfinance.com/2012/01/19/eastman-kodak-this-stock-is-probably-

going-to-zero/

Munir, K. (2012, 2 26). The Demise of Kodak: Five Reasons. Retrieved 11 7,

2012, from The Source: http://blogs.wsj.com/source/2012/02/26/the-demise-of-

kodak-five-reasons/


Nations, U. (2012). World Economic Situation and Prosects 2012. Retrieved 11 6,

2012, from United Nations :

http://www.un.org/en/development/desa/policy/wesp/wesp_current/2012wesp_pre

rel.pdf

Palank, J. (2012, 7 25). Ex-Kodak Employees Blast Bonus Plan. Retrieved 11 13,

2012, from The Wall Street Journal:

http://blogs.wsj.com/bankruptcy/2012/07/25/ex-kodak-employees-blast-bonus-

plan/

Parker, R. A. (2000, 10 1). A Kodak Moment: Eastman Kodak's Robert H. Burst.

Retrieved 11 3, 2012, from Business Finance Magazine:

http://businessfinancemag.com/article/kodak-moment-eastman-kodak’s-robert-h-

brust-1001

Perez, A. (2012, 9 10). Kodak Makes Organizational Changes to Align with

Restructuring Plan. Retrieved 11 11, 2012, from Kodak:

http://www.kodak.com/ek/US/en/Kodak_Makes_Organizational_Changes_to_Ali

gn_with_Restructuring_Plan.htm

Ramakrishnan, S. (2012, 9 10). Eastman Kodak to cut more jobs. Retrieved 11 24,

2012, from Reuters: http://www.reuters.com/article/2012/09/10/us-eastmankodak-

jobs-idUSBRE8890KQ20120910

Rowse, D. (n.d.). Best Digital Camera Manufacturers. Retrieved 11 7, 2012, from

Digital Photography School: http://digital-photography-school.com/best-digital-

camera-manufacturers-a-graph


Services, K. M. (n.d.). MarketMover. Retrieved 11 2, 2012, from Kodak:

http://graphics.kodak.com/KodakGCG/uploadedFiles/Grow_Your_Business/

MngdCmpgnSrvcs_brch_030211_lo.pdf

Services, K. (n.d.). Services. Retrieved 11 25, 2012, from Kodak:

http://graphics.kodak.com/DocImaging/US/en/Business_Services/index.htm

Smith, A. (2011, 11 18). How an Iconic Company Destroyed Shareholder Value.

Retrieved 11 11, 2012, from Fool:

http://www.fool.com/investing/general/2011/11/18/how-an-iconic-company-

destroyed-shareholder-value.aspx

Sony Company Profile. (n.d.). Retrieved 11 2012, from Sony: http://www.sony-

europe.com/article/id/1178278971157

Tirrell, M. (2009, 3 13). Kodak Targets Soccer Moms; Analysts Say Think Young.

Retrieved 11 11, 2012, from Bloomberg: http://www.bloomberg.com/apps/news?

pid=newsarchive&sid=a5xJ1K2rAgx4&refer=news

Westlake, D. (n.d.). The Strengths of Hewlett-Packard. Retrieved 11 2012, from

eHow tech: http://www.ehow.com/list_6938201_strengths-hewlett_packard.html

Williams, S. (2012, 1 20). Eastman Kodak: How a CEO Destroys an Icon.

Retrieved 11 7, 2012, from The Motley Fool:

http://www.fool.com/investing/general/2012/01/20/eastman-kodak-how-a-ceo-

destroys-an-icon.aspx

Zhang, M. (2011, 6 29). Camera Companies Among Top 100 Most Reputable.

Retrieved 11 7, 2012, from Peta Pixel:


http://www.petapixel.com/2011/06/29/camera-companies-among-top-100-most-

reputable-nikon-misses-the-cut/
