Kodak

Kodak

INTRODUCTION

Team Commander was tasked with providing a case analysis on Case 8, Kodak: Taking Pictures-Further. In doing so, Team Commander has provided a summary of the important case facts, current history and trends, strategic position, strategic plan, implementation plan, and the anticipated outcome.

CASE SUMMARY

In the fall of 1998 Kodak entered the digital camera market. Their goal was "to change the clarity, usability, and life of Kodak moments- to make them bigger, better, and more enduring." Kodak set out to achieve this goal by supplying the digital camera market with its Digital Photograph Kit. The kit provided the home user with everything they need to take and share digital pictures. The kit included a Kodak DC20 Digital Camera, easy-to-use software packages, and paper for making quality prints. Also, as part of the processing the consumer received a CD, called Photo CD, which contained pictures that could be loaded onto a computer. Kodak hoped its package would be simple and attractive to consumers.

However, sales were disappointing. Kodak found consumers reluctant to move away from their familiar and functional traditional cameras. In addition, this form of picture taking required the user to be wired (connected to a computer). Kodak had not anticipated the magnitude of these problems.

In an effort to bridge the gap between traditional and digital cameras. Kodak teamed with Intel. The result was "digitization," the ability to convert traditional film to digital format through the standard photographic processing method. By checking Picture CD on the envelope containing the regular roll of film to be developed, consumers can receive their prints and a CD containing digital images. The...

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... anticipated goals. Leaving Kodak with no alternative but to develop and introduce a second product, Digitization. Second, Kodak allowed itself to lose focus on its core products, while trying to grow its digital market. As a result, Fuji blasted them in a price war, which ultimately resulted in a huge price differential. Each of these mistakes chipped away at Kodak's bottom line. Alternative 2 was developed to correct these mistakes.

Alternative 2 will permit Kodak to temporarily put the digital camera market on hold and redirect focus and capital to the core products and development of digitization. The primary objective is to ensure Kodak has the financial ability to maintain its strong hold in the traditional camera and film markets. Ultimately, this is the key to providing the resources required for supporting the development and growth of its digital market.