Management Group Assignment Company: Kodak

Submitted to: Dr. Martin Sviatko

Submitted by: Saad Moin - Student ID: 110033052

Mukhtar Auyezov – Student ID: 110020591

What defines success? 3

Suggestions and Recommendations 7

Conclusion 8

References: 9

Executive Summary:

Kodak, for nearly a century, no company commercialized the camera as successfully as Kodak did, whose breakthroughs included the Brownie camera in 1900, Kodachrome color film, the handheld movie camera, and the easy-load Instamatic camera. But Kodak's storied run began to end with the advent of digital photography and all the printers, software, file sharing, and third-party apps that Kodak has mostly missed out on. More than a century Eastman Kodak guides the development of photography in the world. Kodak sold under the brand name equipment for photo, film and television recording, film, paper and chemicals. Broadest distribution centers were branded printing, as well as self-service photo kiosks. In the 1970 the company has been a virtual monopoly in the U.S. market, it accounted for 90% of sales of photographic supplies and services. At the end of the last century, the corporation has entered the market of inkjet printers. The company was never able to find its place in the electronic revolution, despite the fact that she played an important role in it, creating in 1975 the first digital camera. Since the late 1980s, Kodak has tried to expand but the magic has never returned. Its stock price is now about 96 percent below the peak it had once hit in 1997.

What defines success?

Following factors indicate the success of businesses. These are the scales one can use to gauge a company's position, growth and progress. The famous company Eastman Kodak, whose products for decades had been the standard of quality in photography and printing, selling off divisions that defined her face for most of its history. As part of restructuring Kodak get rid of the two business lines: Personalized Imaging and Document Imaging. The first includes solutions for retail printing, production of photographic paper and film for cameras and production of souvenirs. The second deals with the development of hardware and software solutions to capture images for corporate clients.

Fortune 500

Fortune is a business magazine published by Time Inc. Every year it publishes its Fortune 500 that is a list of top five hundred companies around the globe and ranks them, on the basis of the success of their businesses and gross revenues, from1 to 500.

A company listed in the Fortune 500 is a fortunate one and the one ranked at the top is definitely one of the most successful companies in the world.

Effective Management

A company can never run its operations smoothly, unless and until they are planned, organized and coordinated in an effective and efficient manner.

Coordination done by management and allocation of resources helps in achieving goals. Company becomes a sound organization where efforts do not overlap as every function is smooth and coordinated. The most appropriate authority and responsibility relationships are established. It enables the company to survive in the ever changing and challenging environment by coordinating the internal environment that works best in the competing situations and ultimately leads to success. It leads to better economical production. Good management makes difficult tasks easier and helps the company in making profits that is beneficial to the business. It also creates opportunities for the firm and helps in its growth.

Financial Performance

Revenue is a company's income generated from its normal day to day activities. It is the cash inflow in the company that is earned as a result of providing goods and services to its customers.

How revenue indicates success is related to the profit a company makes. And higher the profit, more successful is the company. Profit or net-income is simply the remainder of the company's earnings or income minus the expenses incurred.

The company that learns the methods of maximizing profits by minimizing its expenses usually wins the race in the industry.

Market Share:

Market share is another way of analyzing a company's position. Market share is the percentage sales of a company's products with respect to overall sales in that market. Market share is usually related directly to a business's success i.e. greater the market share of a firm more successful and profitable are its businesses.

Stock Exchange Listing

Companies that are well off and are successful in the run often get registered at stock exchange. They get their stocks floated in the market, initially to leverage their businesses, secondly to attract buyers and then finally to retain their customers. The companies with high stock prices are usually the successful leaders of the market. The demand for their stock is high which raises the rating of the company and one can easily find the flourishing company by its rating on the stock exchange.

Effective Marketing

The product mix usually known as Four Ps plays a vital role in the successful launching and sustaining of a company's products. It also enables the firm to invest into new ideas and come up with new products that enables a company to grow and earn success.

The Four Ps help the management to decide a reliable yet profitable price for the product, its efficient distribution and ensuring its availability to the customers (i.e. Placement) and the efforts that should be made to promote the product.

This ultimately leads to value creation of a product, consumers get to know more about the product and its manufacturers and this ultimately attracts new customers, retains existing buyers and forms a loyal customer base.

Kodak was founded by an energetic and visionary entrepreneur Eastman Kodak. With the slogan "you press the button, we do the rest," George Eastman put the first uncomplicated camera into the hands of a world of consumers in 1888. In so doing, he made a burdensome and complex process, easy to use and handy to nearly everyone.

Eastman had a goal to make photography "as convenient as the pencil," and Kodak continued to expand the ways images touch people's daily lives. But things did not go the way they were expected. The breakthrough of digital photography almost cannibalized Kodak’s business.

The Crisis

Kodak was a successful company in its industry but it got blind sighted by its extreme focus on existing customers and their needs. It followed a customer intimacy strategy i.e. to anticipate existing customers' need and create products that they wanted. Therefore, instead of taking digital imaging as a disruptive innovation, Kodak's approach was towards sustaining innovation by convergence of conventional imaging science with electronics.

The management failed to face the challenges and was biased toward innovation. It could well sense the arrival of digital technology but sat numb in fear of brand cannibalization. The biggest mistake it made was that it wanted to retain its operations in the existing technology and was not ready to invest elsewhere in a new technology. The mismanagement of Kodak made it to land in trouble and ultimately faces big losses.

U.S. company Eastman Kodak, the famous manufacturer of cameras, photography and film, filed for bankruptcy and has filed for protection from creditors. In addition, the company received from Citigroup loan of $ 950 million for 18 months to try to save the business.

Problems Faced by Kodak’s Management

Management had pressures from competitors. Its direct competitor was Fuji Film. Therefore the management gave all its attention in developing ways to overcome existing rivalry, instead of thinking out of the box.

Kodak had entered and the led the market with its Kodachrome, therefore, its management never wanted to invest else where. They feared its core product’s cannibalization.

The structure of the organization seems rigid as its management was biased toward innovation. Even though they were well aware of the arrival of digital technology in the market, they made no efforts for a breakthrough or a new invention. They kept on modifying the features and characteristics of its existing products.

The other reason of not coming up with an innovative idea could be financial pressures e.g. low budgets, limited resources etc.