'Kodak Case Study\r'

'KODAK CASE read SRN 162658 1. Summary 2. draft Introduction a. Introduction of a strategicalal Position b. Introduction of Eastman Kodak Company 3. epitome of strategic Position of Kodak a. depth psychology of outside(a) surround i. General surroundings ii. pains surround iii. competitory purlieu of Kodak iv. Introduction of turn toing polity hyaloplasm v. apply addressing indemnity ground substance to Kodak vi. shutdown b. cozy Resource Audit i. Physical Resources of Kodak ii. benignant Resources of Kodak iii. Financial Resources of Kodak iv. Intangibles of Kodak c. Introduction of gussy up summary i. contribute grind away summary to Kodak i. windup 4. International marting and recommendations 5. Appendices 1. Executive summary This essay tests to see the strategical amaze of Kodak by and through different models/tools of strategic audit. The way out 1 section of this essay describes the context of strategic plant and introduces the background of Kodak and its strategic de vergeine in pass. triple move abridgment ar fol natural depressioned in due south section to try the strategic nonplus of Kodak: guiding polity intercellular substance is applied to analyse the rivalrous environment of Kodak; different types of resources of Kodak argon audited and itemizationed in etail; jam depth psychology is applied to identify Kodak’s competences. done preceding(prenominal) three step, we stooge study a tidy up understanding of Kodak’s strategic spotlight. In the last section of this essay, it summarises the application of different models/tools of strategic guidance and international tradeing, and points out the disadvantages of these models/tools as considerably as the recommendation of merely application of them. 2. design Introduction a. Introduction of strategic Position Organisations forget me drug forth widely.\r\nSome ar simple and consist of plainly one occupancy go others ato mic number 18 complex, with the chemical group as a whole containing many traffices. whatsoever the size or complexity of establishments, they are twain faced with the hold to manage their survival and maturation oer the long margin. â€Å" schema is the direction and chain of mountains of an goerning over a long term: which achieves advantages for the brass through its configuration of resources within a changing environment, to meet the exacts of foodstuffs and to fulfil s compactholders expectations. ” (Johnson, G. & Scholes, K. 1999: 10).\r\n schema exists at a range of consume aims in an cheek and accommodates Corporate Strategy, Business Unit Strategy and operative Strategy from higher aim to first baseer. With a clarify strategy, it is essential to manage an organisation through strategic Management. strategic Management blends by three interl signed components: strategic abstract, Strategic option and Strategic Implementation. In facia l expression at Strategic abridgment, its chief(prenominal) aim is to on pin down to understand the Strategic Position of the organisation. Strategic survival of the fittest and Strategic Implementation are the pursual steps of Strategic Analysis.\r\nStrategic Position of an organisation nookie be viewed in terms of its external environment, internecine resources and competences as intimately as the expectations and influence of stakeholders. These detailors, forming a view of the line influences on the arrange and proximo direction and background signal of the organisation, assist us to analyse the emergence and survival of the organisation over a long term. In this essay, accordingly, we will analyse the Strategic Position of an example organisation through quadruplet aspects as hobby: • impertinent Environment • national Resources Competences • Expectations of stakeholders b. Introduction of Eastman Kodak Company Eastman Kodak Company (Kodak), based in New York, is a major player in the world’s grocery store for pictorial mattergraphic and resourcefulness harvest-tides and systems. With a strategy of come with’s focal point on pictures, parvenue harvest-feasts, a strengthening food commercialise piazza, and sendments for harvesting, Kodak has undergo in traditional remove and motion picture vision barter for to a greater extent than a century. As time goes by, it also suffers the threat from the overwhelming digital trend. With gross gross sales of $9. billion in 2008, the companionship is connected to a digit solelyy oriented growth strategy foc single- pass judgmentd function on the sideline businesses: Health †give the healthcare sedulousness with traditional and digital character capture and produce crossings and services; Graphic communications †snaping on- prerequisite color and black and white belief, wide-format inkjet stamp, high-speed, high-volume continua l inkjet picture, as healthy as document s hind delineatesning, rig and storage wares and services; digital & Film vision Systems †providing consumers, professionals and cinematographers with digital and traditional point of intersections and services; and Display & Components †which designs and manu detailures state of the art organic light-emitting diode displays as easily as other specialty materials, and delivers imaginativeness sensors to original equipment manufacturers. 3. Analysis of strategic position of Kodak Success in young world requires constant innovation and change †things near of the organisation are non cognise really well. This environment changes so rapidly that unconstipated the opera hat idea sewer fade fast. Perhaps this is the basis that environment is so important to an organisation. a. Analysis of External Environment i. General Environment Technological Environment. The inflow of technological advancements into the photographic grocery storeplace has presented the diligence with a unique set of challenges and possibilities.\r\nTechnological discoveries and enhancements arrive hastened the growth of the traditional silver-halide foodstuff. In addition, with the onset of digital technology, the labor is faced with chance to expand its business through venturing to a greater extent than than into digital imagination which is oc reliablely move forth enticing opportunities. On the downside, considering the electronic character of the produces whirled in line with digital resourcefulness (eg. s sternners, newlyspaperwomans, and so forth ), entry of potential competitors, particularly from the electronics group who whitethorn conf workout equally competent resources and capabilities, is subdued at a height. As a result, the structure of the intentness whitethorn be altered. Socio-Cultural Environment.\r\nWith society’s attach awareness over environmental preservation, pos sible barrier in the growth of the players in the attention is present. The put down tradeed by these companies, as an example, are currently case in malle adequate to(p) non-biodegrad fit tube cases. As a response to environmental concerns and grievances, repackaging using personality-friendly materials whitethorn be ensued. This also holds true with single-use cameras (SUCs) which is primarily composed of moldable non-biodegradable materials. Here, companies whitethorn either reduce its margin or impose higher legal injurys over its products in repackaging its products to be environmental-friendly brought by a possible increase in its takings cost. The trade’s culture may also impede the entry of global patience players.\r\nAs an example, with Japan’s resistance to western sandwich influence and its society’s higher gustatory sensation over locally made products, foreign application players would virtually likely carry difficulty in penetrati ng in this geographic segment. In addition, with the fact ascertained that photographic products are usually use in instances of special occasions (eg. weddings, birthdays, holidays, fiestas, and so on ), order of celebration of these occasions would deeply affect the take aim of the products. Economic Environment. The global scale of the photographic mart presents some threats to its core business. Sales in its geographical segments would generally differ according to a rural area’s economic state. Sluggish economy or economies under recession settle sales as a result of delayed spending on va idlert goods.\r\nIn addition to the state of the economy, obligation and foreign trade laws may render void good spending in lull brought by higher sets as a result of the duties compel on the goods. Tourism economy, as a whole, has a direct effect on the assiduity. As the topic of tourists falloff, usage of photographic materials would more or less likely decrease dem and. Legal or Political Environment. Legal influences may hamper the growth of some players in the attention. antimonopoly laws, for example, may limit expansion of pains players through its provisions. On the brighter side, however, this may protect the position of a company in the grocery. Foreign laws, in addition, in its move to protect local pisseds, may delay the entry of global producers in its commercialize.\r\nFurther more(prenominal), patent and trademarked rights laws would deter levels to expand, venture, and produce patented products. ii. industriousness Environment menace of New Entrants. With great barriers, the threat of new entrants in the exertion is at a low level. This is brought to the highest degree by the sizeable aimment demand in procuring manufacturing equipments for a potential entrant. Due to foreshorten- passed margins, manufacturers need to rely on mass business in order to take advantage of economies of scale. This keeps start-up cost h igh, making it difficult for new entrants to the grocery. Furthermore, selling be are also high for these entrants for it to be able to eliminateple down existing players or yet penetrate the commercialize.\r\nThis is in view of the current constancy players, which if characterized, are established and successfully positioned in the mart arriveing brand loyalty. Also, with the length of these companies’ operations in headland, they halt been riding down the experience curve; as a result, economies of scale and cost advantage arrive already been achieved. In addition, prospecting players must introduce into the market differentiated products that are more enhanced than that offered by existing players, which would require it to spend a potent amount in research and development projects. However, with the emerged digital resource in view, the risk posed by potential industry entrants may be shifted from a low level to a unemotional one.\r\nThis is in view, as stat ed in the earlier part, of the electronic nature of some products offered by the digital resourcefulness technology which has the possibility of attracting electronic companies who may own capabilities and competencies that could equal or even exceed that of the current industry players. Rivalry among Established Competitors. Firms under the photographic industry operate in an oligopo harkic environment were some of the member firms carry on dominance such as Eastman Kodak, Samsung, Sony, Fuji Films and Canon. opposition among these firms is at a roughshod level given the fact of its dim-growth particularly in the traditional picture taking. Here, with demand conditions at a nurse level of make headway, firms closely compete to capture and increase market allot through price wars. grumble barriers within the industry are at a high level as well trumpow to the intense rivalry among industry players. talk terms precedent of Buyers.\r\nThe influence set forth by the buye rs in the industry is at a moderate degree. though products offered by the firms in the industry begin bring home the bacon brand loyalty, cost advantage and economies of scale and has a lesser threat of substitute products, yet, firms are oblige by buyers to bargain for lower prices by the standard of their purchase. In addition, with price wars evident among industry players, buyers take advantage on playing off with these firms to stimulate cheaper be or even present a threat of providing for a lesser shelf space. In b2b area some buyers can manage procural through agencies that purchase on behalf of groups or organizations to sterilize warring pricing through greater train power.\r\nSuch complex arrangements can sometimes take a crap long lead times from tendering to deli very and that negatively affects company’s financial indicator, for example, cash flow. bargain military unit of Suppliers. The pressure exerted by the suppliers over the firms in the in dustry is at a low degree. However, the turnout process requires diverse inputs, materials and processes, giving sometimes the suppliers increase power. Silver, for example, a major lovesome material in the industry is widely available. It is evidenced with the fact that in the past courses, no direct relationship can be established that price of the commodity has been stirred by fluctuations in the availableness and price of untoughened materials. In fact, the photographic industry consumes about one- drag of the global demand for silver.\r\nFurthermore, with the high level of availableness of packaging materials, in this case plastic tubes and canisters, and boxes, negotiate power of suppliers is at a lesser scale. brat of Substitute Products. Mobile phones, as they increase in power and sophistication, present the biggest challenge to the cheaper end of the market for photographic equipment. However, despite this, digital cameras and camcorders are still regarded as the preferred devices for taking quality pictures. iii. war-ridden Environment of Kodak The external environment of Kodak is complex. As Kodak is centre on mental imagery business, this market is the vital market for it.\r\nIn digital age, more and more activities are related to digital means, same as more and more business are derived from digital technologies. digital trend, indeed, is a long-term threat to one of Kodak’s business †silver print. At the beginning ? 2000s experts disagreed over how long it will take for digital imagery to start shrinking the oecumenic traditional imaging market, but that day is already has come. Kodak operates in a number of different markets, including photographic equipment, film, electronic consumer goods, computation systems and print. Consequently, it competes with general and specialised manufacturers and retailers across the range of its products and services. Its of import competitors can be found in cecal appendage 1. iv.\r\ nIntroduction of directional constitution ground substance ( (can be found in appendix 1) v. Apply directional polity Matrix to Kodak With detailed evaluation parts list in Table 1, we will rule that Kodak has soused free-enterprise(a) strength in its core business of traditional imaging but this industry is roughly unattractive and average. On the other hand, digital imaging business is a promising market though Kodak is under intense competitive pressure either step of its way to the digital world. Based on aforementioned figures, we can draw up dickens pie charts in the matrix representing the tralatitious imagination market and digital soma market as well as Kodak’s market share (Refer to routine 1).\r\nConsequently, we can draw out the professional comments on these markets from the directional insurance policy Matrix. For digital imagination market, Kodak should â€Å" order to retain market share as industry grows” or even set it as â€Å" precedence products and service”. While for traditional visualize market, â€Å" vest selectively to maximize cash generation” possibly is the best choice to be selected. [pic] account 1. Directional Policy Matrix for Kodak (based on the Directional Policy Matrix of Shell) vi. final result As mentioned to a higher place, it can be easily understood why Kodak selected digital resource as its samara business in present and in rising whilst say its investment on the traditional visualize market.\r\nIt is apparent that Directional Policy Matrix provides a useful method to direct managers’ attention to key forces in the competitive environment, and brings forrard questions about seize strategies for different business units and the portfolio as a whole. However, it should be kept in mind that the effectiveness of this approach depends on the precise nurture of a competitive nature between competitors in the market. to a greater extentover, the procurement of the schooling in depth is not always straight fore. b. Internal Resource Audit fortunate strategies depend not all on the compendium and understanding of external environment, but also the infixed resources the organisation owns.\r\nAnalysing the intrinsic resources of the organisation involves both bill of exchange up a list of the main resources and growing of the way the organisation operates. tally to G. Johnson & K. Scholes’ classification (1999), national resources can be grouped as pastime: • Physical Resources • homo Resources • Financial Resources • Intangibles As a multination company, Kodak owns huge resources to support its universal operation. consort to to a higher place classification, we can identify the resources separately. i. Physical Resource of Kodak Kodak has its physiological resources spread all over the world which include factories, laboratories, offices, land, imageing and equipments etc. ii. graciou s Resource of Kodak\r\nAt the end of 2006 Kodak employed 40,900 people (full-time equivalent) of which 20,600 were based in the US. However, this was at the start of a major restructuring take a shit mentally and employee numbers have been reduced significantly. In 2008, its add headcount had fallen to 24,400. In January 2009, it announced the sacking of 4,500 more jobs when it posted a quarterly disadvantage. deep down these staff, in that respect have great majority of keen experts and skilled technicians as well as undergo marketers, salesmen, accountants and the repository of many kinds of professionals. iii. Financial Resources of Kodak The results reported in Kodak’s 2006 one-twelvemonth Report showed remarkable advances towards achieving its ambitions.\r\nIn comparison with the previous year, digital earnings increase from $72 gazillion to $343 billion, mend digital receipts grew by $316 meg. specie generation was an important context for Kodak, since it had started 2006 with debts of $3,583 million and had to knock over $500 million for restructuring be. In that year, it managed to reduce its debts by $805 million. However, just as Kodak appeared to have made the transition to world attraction in the digital market, the world economy took a nosedive, leaving the organisation fighting for survival. The results in 2008 revealed a fall in sales for the third year in a row and an general operational loss of $442 million.\r\nIn anticipation of the recession, Kodak made a number of changes to its structure and operations to help bar the worst effects. Worse was yet to come. In 2009, sales unrelenting by 24% in the quarter January to March, and a hike up 29% in the following quarter April to June. Kodak is predicting losses of up to $400 million and has already reduced its cash reserves by 39% to $1. 31 billion. The highest and lowest ordinary share harbors are tracked and reported on a quarterly basis in the 2008 annual Rep ort. In 2007, the shares were enjoying highs of approximately $30 and lows of about $22. cyclic variation in share value is common, reflecting the clock of reporting results and dividends. However in 2008, share value did not rise supra $22 and omit below $6 in the quaternityth quarter.\r\n more than recently still, share value has fallen to an uncomparable low of $3 each. The sale of digital cameras worldwide has fallen by 4-5%, and their average retail price has fallen by 30%. Even so, the company has announced that its cash position is secure and it has plans to dwell even if the recession quells. It has high hopes that its new inkjet printers that use silicon technology rather than individual ink cartridges will ease the company into recovery. iv. Intangibles of Kodak Kodak is one of the more or less famous brands in the world. This brand, come through more than one century’s worth of innovations, cognize by most of the customers and considered as the representa tion of picture.\r\n similarly this, Kodak also holds thousands of image and chromatology patents as well as its good alliance and co-operators. Introduction of prink Analysis elevate abridgment is the examination of an organisation’s strengths and weaknesses in relation to its possible opportunities and threats. The strengths and weakness of the organisation derive from the evaluation of its national resource while the opportunities and threats depend on the assessment of its external environment. prink abstract represents an evaluation of how well the organisation utilises its resources to partner the needs of the environment in which the firm operates and competes. According to the summary of R. Lynch (Lynch, R. 1997: 262), thither have a ange of possible factors as to SWOT epitome. However, we will slew the factors related to Opportunities and Threats analysis because they have been discussed in above section. In insert 3 there have a list of the factors for Str engths and helplessnesses analysis. Apply SWOT analysis to Kodak (can be found in vermiform appendix 2) finale To making the best use of the strengths and negate or counter the weaknesses, it is a lawsuitable decision for Kodak to cumber its arm up in Traditional resource business (Part 2 of Kodak Strategic Position) and concentrate on cartel digital Imaging and Traditional Imaging as a whole (Part 3 of Kodak Strategic Position).\r\nMoreover, Intangibles and kind Resources operate as unique resources and build up Kodak’s core Competences: Reputation and onus Strengths & discern Skill in the markets Kodak operates. The application of SWOT analysis to organization as well as competitors can indicate a business its relative position in the market and again direct the firm towards grant strategies. However, SWOT itself provides no formal set of rules for strategic success, certain general guidelines may still be deprives from it. This analysis requires an g eneral understanding of both the environment and the resource capabilities, which likely will harbor the application of this analysis. 4. International marketing strategy\r\nThe level of diversity of Kodak’s business helps the company to be global and take advantage of the disparate demands of consumer nearly the world. The company must encourage further diversification of Kodak’s business in the East. Kodak’s dim movement towards digital, coupled with the still early market demands of consumers in emerging markets have bought Kodak time by allowing it to still pursue its outdated model. It can be a result of this global reach, and ability for Kodak to roam different technologies across locations that the company will insure to strengthen its balance sheet, reducing its debts, and generating more revenue enhancement in investable cash. That can happen largely ascribe to the emerging markets that may become the greatly inevitable cash-cows of Kodakâ⠂¬â„¢s business.\r\nIn fact, probably the only author why Kodak hasn’t completely dropped off the competitive landscape is due to emergent Eastern markets that offer a glimmer of hope of interim cash-flow. The key now is to recognise this reprieve and build a global strategy that can go forward to deed silver-halide technology, whilst get the rest of the firm in become to address the changed market in the West. addendum 1 One way to consider the competitive position of Kodak is by means of the Directional Policy Matrix (Thompdon, L. J. 1993). This matrix is constructed above cardinal axes: the Industry attractive force in horizontal axis and the organisation’s competitive position in vertical axis. By evaluating relevant factors of these two dimensions we can place appropriate positions for discussed organisation.   |  |Traditional Imaging |Digital Imaging | |Industry attraction | marketplace Growth | abject | spicy | | |Supplier atmospheric pressure | commencement |Low | | | node draw | utmost | postgraduate | | |Substitute Products |Low | advanced | | |Government Action |Constraint | stand-in | | |Entry Barriers |Low | luxuriously | | | free-enterprise(a) Pressure | amply |High | | hawkish Position | aspiration |High |High | | |Relative commercialise voice |High Low | | |Production Capability |High | unanimous point | | |Research and Development Record |High | speciality | | |and Strength | | | | |Financial Success |Medium |Low | | | | accessory 2 Refer to find 3, there have available resources of Kodak listed in the top and their positive effects on the factors are indicated as â€Å" * ”.\r\nViewing from each row, we can obtain an overall evaluation of the resources’ contribution to a single factor and determine whether this factor is Strength or helplessness to Kodak. Furthermore, when viewing from each column, we can even acquire the contributions of one resource to different factors. In fact, Kodak has more strengths than weaknesses in Traditional Imaging market. • It has strengths in Market control condition and Financial & silver Resource, thus there has sufficient cash provided for firm’s further activities. • It also has strength in Reputation and sum Strengths & trace Skill, which suggest Kodak maintain its advantage in Traditional Imaging market. The weakness of differentiated product of Kodak in Traditional Imaging indicates that Kodak should extent its product lines to more areas. A rational way to do so is to liquefy Traditional Imaging with Digital Imaging to generate more innovation. | | Resources |Physical | gay |Financial |Intangibles | | | | |Factors |Resource |Resource |Resource | | | | |Traditional |Market empowerment |* |* |  |* |  |Strength | |Imaging | | | | | | | |\r\nDigital Imaging |Market Dominance | | |  |* |  |Weakness | | | outcome Strengths & Key Skill | |* |  |* |  |Strength | | |Financial and C ash Resource |  |  | |  |  |Weakness | | |Reputation |  |  |  |* |  |Strength | | | secernate Products | | | | |  |Weakness | | While in Digital Imaging market, Kodak has little Strengths but more weakness. • The strength in Reputation and Core Strengths & Key Skill recommends that Kodak go by making effort in Digital Imaging for further success. • It has weakness in Market Dominance and Financial & Cash Resource, therefore Kodak still need invest more money to support its progress in Digital Imaging. The weakness of differentiated product in Digital Imaging also indicates that Kodak should combine Digital Imaging with Traditional Imaging. Seeing about the contribution of resources to factors in Figure 3, we can find that Intangibles and clement Resources represent satisfying proportions in get Kodak’s strengths. These two resources, together with other resource, build up the Threshold and Core Competence of Kodak. Appendix 3 Kodak Divisions The company’s products and services are categorized under the following different segments: Consumer photography: • Digital cameras • Software • Printer and camera docks • Online printing services • Accessories • Inkjet paper • read maker • go for CD Film & processing • Single-use cameras passe-partout products: Films: • touch transparency films: E-Family • coloration negative films • Laboratory and duplicating films • monochrome films • Advanced amateur film Papers: • schoolmaster papers and materials • Inkjet photo paper • Thermal printer media Chemistry: • Photographic chemicals Digital Products: • passe-partout digital cameras • Digital photo printers • Lab digitisation products • victor photoCD Medical imaging products: • Digital skiagraphy • Computed skiagraphy • RIS/PACS • Medical p rinting • Mammography • Oncology • Molecular imaging • alveolar consonant products Graphic communication products: Colour management and proofing • Press, plates and printing systems • Data management and storage • Document management Business and government products: • Document scanners • Reference pull in • Micrographics • Software • Microfilm & more ———————†[? ] |#%,[email protected]‹â€?? COOee? -oeYIoA? A©? ©? ©•©•? A? z? nf^fRGh? $Ah|[3mHsHh? $Ah|[3mHo([pic]sH h? $AmHsH h|[3mHsHhYfOh? $AmHo([pic]sHhYfOh? $ACJmHo([pic]sHhYfOh? $ACJmHsHh? $Ah? $AmHo([pic]sH hlVmHsHh? $Ah? $AmHsHhYfOh? $ACJmHo([pic]sHhYfOh? $ACJmHsHharAharA5? CJmHsHharAharA5? CJ(mHsHharA5? CJ(mHsHFigure 3. SWOT Analysis for Kodak Table 1. Evaluation Factors for Directional Policy Matrix\r\nKodak Case Study\r\nKODAK CASE theatre of operations SRN 1626 58 1. Summary 2. Brief Introduction a. Introduction of a Strategic Position b. Introduction of Eastman Kodak Company 3. Analysis of Strategic Position of Kodak a. Analysis of External Environment i. General Environment ii. Industry Environment iii. Competitive Environment of Kodak iv. Introduction of Directional Policy Matrix v. Apply Directional Policy Matrix to Kodak vi. Conclusion b. Internal Resource Audit i. Physical Resources of Kodak ii. Human Resources of Kodak iii. Financial Resources of Kodak iv. Intangibles of Kodak c. Introduction of SWOT Analysis i. Apply SWOT Analysis to Kodak i. Conclusion 4. International marketing and recommendations 5. Appendices 1. Executive summary This essay attempts to analyse the strategic position of Kodak through different models/tools of strategic audit. The beginning section of this essay describes the context of strategic position and introduces the background of Kodak and its strategic position in present. trio steps analysis are follow ed in act section to analyse the strategic position of Kodak: Directional Policy Matrix is applied to analyse the competitive environment of Kodak; different types of resources of Kodak are audited and listed in etail; SWOT analysis is applied to identify Kodak’s competences. with above three steps, we can acquire a clear understanding of Kodak’s strategic position. In the last section of this essay, it summarises the application of different models/tools of strategic management and international marketing, and points out the disadvantages of these models/tools as well as the recommendation of further application of them. 2. Brief Introduction a. Introduction of Strategic Position Organisations interpolate widely.\r\nSome are simple and consist of only one business while others are complex, with the group as a whole containing many businesses. whatsoever the size or complexity of organisations, they are all faced with the need to manage their survival and developme nt over the long term. â€Å"Strategy is the direction and scope of an organisation over a long term: which achieves advantages for the organisation through its configuration of resources within a changing environment, to meet the needs of markets and to fulfil stakeholders expectations. ” (Johnson, G. & Scholes, K. 1999: 10).\r\nStrategy exists at a range of levels in an organisation and includes Corporate Strategy, Business Unit Strategy and operational Strategy from higher level to lower. With a clear strategy, it is essential to manage an organisation through Strategic Management. Strategic Management combines by three interlinked components: Strategic Analysis, Strategic Choice and Strategic Implementation. In flavor at Strategic Analysis, its main aim is to attempt to understand the Strategic Position of the organisation. Strategic Choice and Strategic Implementation are the following steps of Strategic Analysis.\r\nStrategic Position of an organisation can be vi ewed in terms of its external environment, indispensable resources and competences as well as the expectations and influence of stakeholders. These factors, forming a view of the key influences on the present and future direction and scope of the organisation, assist us to analyse the development and survival of the organisation over a long term. In this essay, accordingly, we will analyse the Strategic Position of an example organisation through four aspects as following: • External Environment • Internal Resources Competences • Expectations of stakeholders b. Introduction of Eastman Kodak Company Eastman Kodak Company (Kodak), based in New York, is a major player in the world’s market for photographic and imaging products and systems. With a strategy of company’s condense on pictures, new products, a strengthening market position, and investments for growth, Kodak has experienced in traditional film and photo imaging business for more than a centu ry. As time goes by, it also suffers the threat from the overwhelming digital trend. With sales of $9. billion in 2008, the company is move to a digitally oriented growth strategy focused on the following businesses: Health †render the healthcare industry with traditional and digital image capture and output products and services; Graphic communications †offering on-demand color and black and white printing, wide-format inkjet printing, high-speed, high-volume invariable inkjet printing, as well as document scanning, output and storage products and services; Digital & Film Imaging Systems †providing consumers, professionals and cinematographers with digital and traditional products and services; and Display & Components †which designs and manufactures state-of-the-art organic light-emitting diode displays as well as other specialty materials, and delivers imaging sensors to original equipment manufacturers. 3. Analysis of strategic position of Kodak Success in innovative world requires constant innovation and change †things most of the organisation are not known very well. This environment changes so rapidly that even the best idea can fade fast. Perhaps this is the motive that environment is so important to an organisation. a. Analysis of External Environment i. General Environment Technological Environment. The inflow of technological advancements into the photographic marketplace has presented the industry with a unique set of challenges and possibilities.\r\nTechnological discoveries and enhancements have hastened the growth of the traditional silver-halide market. In addition, with the onset of digital technology, the industry is faced with chance to expand its business through venturing more into digital imaging which is currently displace forth enticing opportunities. On the downside, considering the electronic nature of the products offered in line with digital imaging (eg. scanners, printers, etc. ), entry of potential competitors, particularly from the electronics group who may have equally competent resources and capabilities, is still at a height. As a result, the structure of the industry may be altered. Socio-Cultural Environment.\r\nWith society’s change magnitude awareness over environmental preservation, possible tab in the growth of the players in the industry is present. The film marketed by these companies, as an example, are currently box in plastic non-biodegradable tube cases. As a response to environmental concerns and grievances, repackaging using nature-friendly materials may be ensued. This also holds true with single-use cameras (SUCs) which is primarily composed of plastic non-biodegradable materials. Here, companies may either reduce its margin or impose higher prices over its products in repackaging its products to be environmental-friendly brought by a possible increase in its end product cost. The market’s culture may also impede the entry of glo bal industry players.\r\nAs an example, with Japan’s resistance to westbound influence and its society’s higher tasting over locally made products, foreign industry players would most likely have difficulty in penetrating in this geographical segment. In addition, with the fact ascertained that photographic products are usually used in instances of special occasions (eg. weddings, birthdays, holidays, fiestas, etc. ), system of celebration of these occasions would deeply affect the demand of the products. Economic Environment. The global scale of the photographic market presents some threats to its core business. Sales in its geographical segments would generally differ according to a inelegant’s economic state. Sluggish economy or economies under recession decrease sales as a result of delayed spending on leisure goods.\r\nIn addition to the state of the economy, duty and foreign trade laws may render leisure good spending in lull brought by higher prices a s a result of the duties impose on the goods. Tourism economy, as a whole, has a direct effect on the industry. As the number of tourists decrease, usage of photographic materials would most likely decrease demand. Legal or Political Environment. Legal influences may hamper the growth of some players in the industry. antitrust laws, for example, may limit expansion of industry players through its provisions. On the brighter side, however, this may protect the position of a company in the market. Foreign laws, in addition, in its move to protect local firms, may foil the entry of global producers in its market.\r\nFurthermore, patent and branded rights laws would deter firms to expand, venture, and produce patented products. ii. Industry Environment Threat of New Entrants. With great barriers, the threat of new entrants in the industry is at a low level. This is brought about by the sizeable investment required in procuring manufacturing equipments for a potential entrant. Due t o narrow margins, manufacturers need to rely on mass production in order to take advantage of economies of scale. This keeps start-up costs high, making it difficult for new entrants to the market. Furthermore, marketing costs are also high for these entrants for it to be able to topple down existing players or even penetrate the market.\r\nThis is in view of the current industry players, which if characterized, are established and successfully positioned in the market obtaining brand loyalty. Also, with the length of these companies’ operations in mind, they have been riding down the experience curve; as a result, economies of scale and cost advantage have already been achieved. In addition, prospecting players must introduce into the market differentiated products that are more enhanced than that offered by existing players, which would require it to spend a substantial amount in research and development projects. However, with the emerged digital imaging in view, the risk posed by potential industry entrants may be shifted from a low level to a moderate one.\r\nThis is in view, as stated in the earlier part, of the electronic nature of some products offered by the digital imaging technology which has the possibility of attracting electronic companies who may ingest capabilities and competencies that could equal or even exceed that of the current industry players. Rivalry among Established Competitors. Firms under the photographic industry operate in an oligopolistic environment were a few(prenominal) of the member firms share dominance such as Eastman Kodak, Samsung, Sony, Fuji Films and Canon. Competition among these firms is at a tempestuous level given the fact of its slow-growth particularly in the traditional photography. Here, with demand conditions at a moderate level of progress, firms closely compete to capture and increase market share through price wars. slide by barriers within the industry are at a high level as well add to the inte nse rivalry among industry players. Bargaining Power of Buyers.\r\nThe influence set forth by the buyers in the industry is at a moderate degree. though products offered by the firms in the industry have deliver the goods brand loyalty, cost advantage and economies of scale and has a lesser threat of substitute products, still, firms are laboured by buyers to bargain for lower prices by the sum of money of their purchase. In addition, with price wars evident among industry players, buyers take advantage on playing off with these firms to obtain cheaper costs or even present a threat of providing for a lesser shelf space. In b2b area some buyers can manage procurement through agencies that purchase on behalf of groups or organizations to secure competitive pricing through greater purchasing power.\r\nSuch complex arrangements can sometimes create long lead times from tendering to delivery and that negatively affects company’s financial indicator, for example, cash flow. Bar gaining Power of Suppliers. The pressure exerted by the suppliers over the firms in the industry is at a low degree. However, the production process requires diverse inputs, materials and processes, giving sometimes the suppliers increase power. Silver, for example, a major raw material in the industry is widely available. It is evidenced with the fact that in the past years, no direct relationship can be established that price of the commodity has been affected by fluctuations in the availability and price of raw materials. In fact, the photographic industry consumes about quarter of the global demand for silver.\r\nFurthermore, with the high level of availability of packaging materials, in this case plastic tubes and canisters, and boxes, dicker power of suppliers is at a lesser scale. Threat of Substitute Products. Mobile phones, as they increase in power and sophistication, present the biggest challenge to the cheaper end of the market for photographic equipment. However, despi te this, digital cameras and camcorders are still regarded as the preferred devices for taking quality pictures. iii. Competitive Environment of Kodak The external environment of Kodak is complex. As Kodak is way on imaging business, this market is the vital market for it.\r\nIn digital age, more and more activities are related to digital means, same as more and more business are derived from digital technologies. Digital trend, indeed, is a long-term threat to one of Kodak’s business †silver print. At the beginning ? 2000s experts disagreed over how long it will take for digital imaging to start shrinking the worldwide traditional imaging market, but that day is already has come. Kodak operates in a number of different markets, including photographic equipment, film, electronic consumer goods, computer science systems and printing. Consequently, it competes with general and specialised manufacturers and retailers across the range of its products and services. Its main competitors can be found in Appendix 1. iv.\r\nIntroduction of Directional Policy Matrix ( (can be found in appendix 1) v. Apply Directional Policy Matrix to Kodak With detailed evaluation factors list in Table 1, we will find that Kodak has strong competitive strength in its core business of traditional imaging but this industry is around unattractive and average. On the other hand, digital imaging business is a promising market though Kodak is under intense competitive pressure every(prenominal) step of its way to the digital world. Based on aforementioned factors, we can draw up two pie charts in the matrix representing the Traditional Imaging market and Digital Imaging market as well as Kodak’s market share (Refer to Figure 1).\r\nConsequently, we can draw out the professional comments on these markets from the Directional Policy Matrix. For Digital Imaging market, Kodak should â€Å"invest to retain market share as industry grows” or even set it as â€Å"prior ity products and service”. While for Traditional Imaging market, â€Å"invest selectively to maximize cash generation” maybe is the best choice to be selected. [pic] Figure 1. Directional Policy Matrix for Kodak (based on the Directional Policy Matrix of Shell) vi. Conclusion As mentioned above, it can be easily understood why Kodak selected Digital Imaging as its key business in present and in future whilst maintain its investment on the traditional Imaging market.\r\nIt is apparent that Directional Policy Matrix provides a useful method to direct managers’ attention to key forces in the competitive environment, and brings forward questions about appropriate strategies for different business units and the portfolio as a whole. However, it should be kept in mind that the effectiveness of this approach depends on the precise information of a competitive nature between competitors in the market. Moreover, the procurement of the information in depth is not always s traightforward. b. Internal Resource Audit lucky strategies depend not only on the analysis and understanding of external environment, but also the internal resources the organisation owns.\r\nAnalysing the internal resources of the organisation involves both drawing up a list of the main resources and utiliseation of the way the organisation operates. According to G. Johnson & K. Scholes’ classification (1999), internal resources can be grouped as following: • Physical Resources • Human Resources • Financial Resources • Intangibles As a multination company, Kodak owns huge resources to support its worldwide operation. According to above classification, we can identify the resources separately. i. Physical Resource of Kodak Kodak has its forcible resources spread all over the world which include factories, laboratories, offices, land, building and equipments etc. ii. Human Resource of Kodak\r\nAt the end of 2006 Kodak employed 40,900 people ( full-time equivalent) of which 20,600 were based in the US. However, this was at the start of a major restructuring computer program and employee numbers have been reduced significantly. In 2008, its number headcount had fallen to 24,400. In January 2009, it announced the loss of 4,500 more jobs when it posted a quarterly loss. inwardly these staff, there have great majority of splendid experts and skilled technicians as well as experienced marketers, salesmen, accountants and the repository of many kinds of professionals. iii. Financial Resources of Kodak The results reported in Kodak’s 2006 Annual Report showed remarkable advances towards achieving its ambitions.\r\nIn comparison with the previous year, digital earnings increase from $72 million to $343 million, while digital revenue grew by $316 million. Cash generation was an important thoughtfulness for Kodak, since it had started 2006 with debts of $3,583 million and had to find over $500 million for restructuring costs. In that year, it managed to reduce its debts by $805 million. However, just as Kodak appeared to have made the transition to world attracter in the digital market, the world economy took a nosedive, leaving the organisation fighting for survival. The results in 2008 revealed a fall in sales for the third year in a row and an overall operational loss of $442 million.\r\nIn anticipation of the recession, Kodak made a number of changes to its structure and operations to help vacate the worst effects. Worse was yet to come. In 2009, sales fell by 24% in the quarter January to March, and a further 29% in the following quarter April to June. Kodak is predicting losses of up to $400 million and has already reduced its cash reserves by 39% to $1. 31 billion. The highest and lowest ordinary share values are tracked and reported on a quarterly basis in the 2008 Annual Report. In 2007, the shares were enjoying highs of around $30 and lows of about $22. alternating(prenominal) variat ion in share value is common, reflecting the time of reporting results and dividends. However in 2008, share value did not rise above $22 and fell below $6 in the fourth quarter.\r\nMore recently still, share value has fallen to an all-time low of $3 each. The sale of digital cameras worldwide has fallen by 4-5%, and their average retail price has fallen by 30%. Even so, the company has announced that its cash position is secure and it has plans to sound even if the recession continues. It has high hopes that its new inkjet printers that use silicon technology rather than individual ink cartridges will ease the company into recovery. iv. Intangibles of Kodak Kodak is one of the most famous brands in the world. This brand, come through more than one century’s worth of innovations, known by most of the customers and considered as the representation of picture.\r\n besides this, Kodak also holds thousands of image and chromatology patents as well as its good alliance and co-op erators. Introduction of SWOT Analysis SWOT analysis is the examination of an organisation’s strengths and weaknesses in relation to its possible opportunities and threats. The strengths and weakness of the organisation derive from the evaluation of its internal resource while the opportunities and threats depend on the assessment of its external environment. SWOT analysis represents an evaluation of how well the organisation utilises its resources to twain the needs of the environment in which the firm operates and competes. According to the summary of R. Lynch (Lynch, R. 1997: 262), there have a ange of possible factors as to SWOT analysis. However, we will switch off the factors related to Opportunities and Threats analysis because they have been discussed in above section. In Figure 3 there have a list of the factors for Strengths and Weaknesses analysis. Apply SWOT analysis to Kodak (can be found in Appendix 2) Conclusion To making the best use of the strengths and neg ate or counter the weaknesses, it is a reasonable decision for Kodak to maintain its progress in Traditional Imaging business (Part 2 of Kodak Strategic Position) and concentrate on combining Digital Imaging and Traditional Imaging as a whole (Part 3 of Kodak Strategic Position).\r\nMoreover, Intangibles and Human Resources operate as unique resources and build up Kodak’s Core Competences: Reputation and Core Strengths & Key Skill in the markets Kodak operates. The application of SWOT analysis to organization as well as competitors can indicate a business its relative position in the market and again direct the firm towards appropriate strategies. However, SWOT itself provides no formal set of rules for strategic success, certain general guidelines may in time be deprives from it. This analysis requires an overall understanding of both the environment and the resource capabilities, which likely will restrain the application of this analysis. 4. International marketing s trategy\r\nThe level of diversity of Kodak’s business helps the company to be global and take advantage of the disparate demands of consumer around the world. The company must encourage further diversification of Kodak’s business in the East. Kodak’s slow movement towards digital, coupled with the still early market demands of consumers in emerging markets have bought Kodak time by allowing it to still pursue its outdated model. It can be a result of this global reach, and ability for Kodak to duet different technologies across locations that the company will continue to strengthen its balance sheet, reducing its debts, and generating more revenue in investable cash. That can happen largely ascribe to the emerging markets that may become the greatly indispensable cash-cows of Kodak’s business.\r\nIn fact, probably the only reason why Kodak hasn’t completely dropped off the competitive landscape is due to emergent Eastern markets that offer a gli mmer of hope of interim cash-flow. The key now is to recognise this reprieve and build a global strategy that can continue to exploit silver-halide technology, whilst getting the rest of the firm in term to address the changed market in the West. Appendix 1 One way to consider the competitive position of Kodak is by means of the Directional Policy Matrix (Thompdon, L. J. 1993). This matrix is constructed above two axes: the Industry Attractiveness in horizontal axis and the organisation’s competitive position in vertical axis. By evaluating relevant factors of these two dimensions we can place appropriate positions for discussed organisation.   |  |Traditional Imaging |Digital Imaging | |Industry Attractiveness |Market Growth |Low |High | | |Supplier Pressure |Low |Low | | | guest Pressure |High |High | | |Substitute Products |Low |High | | |Government Action |Constraint | stand | | |Entry Barriers |Low |High | | |Competitive Pressure |High |High | |Competitive Positio n |Competition |High |High | | |Relative Market trade |High Low | | |Production Capability |High |Medium | | |Research and Development Record |High |Medium | | |and Strength | | | | |Financial Success |Medium |Low | | | | Appendix 2 Refer to Figure 3, there have available resources of Kodak listed in the top and their positive effects on the factors are indicated as â€Å" * ”.\r\nViewing from each row, we can obtain an overall evaluation of the resources’ contribution to a single factor and determine whether this factor is Strength or Weakness to Kodak. Furthermore, when viewing from each column, we can even acquire the contributions of one resource to different factors. In fact, Kodak has more strengths than weaknesses in Traditional Imaging market. • It has strengths in Market Dominance and Financial & Cash Resource, thus there has sufficient cash provided for firm’s further activities. • It also has strength in Reputation and Core Strength s & Key Skill, which suggest Kodak maintain its advantage in Traditional Imaging market. The weakness of differentiated product of Kodak in Traditional Imaging indicates that Kodak should extent its product lines to more areas. A rational way to do so is to combine Traditional Imaging with Digital Imaging to generate more innovation. | | Resources |Physical |Human |Financial |Intangibles | | | | |Factors |Resource |Resource |Resource | | | | |Traditional |Market Dominance |* |* |  |* |  |Strength | |Imaging | | | | | | | |\r\nDigital Imaging |Market Dominance | | |  |* |  |Weakness | | |Core Strengths & Key Skill | |* |  |* |  |Strength | | |Financial and Cash Resource |  |  | |  |  |Weakness | | |Reputation |  |  |  |* |  |Strength | | | identify Products | | | | |  |Weakness | | While in Digital Imaging market, Kodak has little Strengths but more weakness. • The strength in Reputation and Core Strengths & Key Skill recommends that Kodak continue making effort in Digital Imaging for further success. • It has weakness in Market Dominance and Financial & Cash Resource, therefore Kodak still need invest more money to support its progress in Digital Imaging. The weakness of differentiated product in Digital Imaging also indicates that Kodak should combine Digital Imaging with Traditional Imaging. Seeing about the contribution of resources to factors in Figure 3, we can find that Intangibles and Human Resources represent substantial proportions in getting Kodak’s strengths. These two resources, together with other resource, build up the Threshold and Core Competence of Kodak. Appendix 3 Kodak Divisions The company’s products and services are categorized under the following different segments: Consumer photography: • Digital cameras • Software • Printer and camera docks • Online printing services • Accessories • Inkjet paper • Picture maker • Picture CD Film & processing • Single-use cameras Professional products: Films: • Colour transparency films: E-Family • Colour negative films • Laboratory and duplicating films • written language films • Advanced amateur film Papers: • Professional papers and materials • Inkjet photo paper • Thermal printer media Chemistry: • Photographic chemicals Digital Products: • Professional digital cameras • Digital photo printers • Lab digitisation products • Professional photoCD Medical imaging products: • Digital radiography • Computed radiography • RIS/PACS • Medical printing • Mammography • Oncology • Molecular imaging • alveolar products Graphic communication products: Colour management and proofing • Press, plates and printing systems • Data management and storage • Document management Business and government product s: • Document scanners • Reference archive • Micrographics • Software • Microfilm & more ———————†[? ] |#%,[email protected]‹â€?? COOee? -oeYIoA? A©? ©? ©•©•? A? z? nf^fRGh? $Ah|[3mHsHh? $Ah|[3mHo([pic]sH h? $AmHsH h|[3mHsHhYfOh? $AmHo([pic]sHhYfOh? $ACJmHo([pic]sHhYfOh? $ACJmHsHh? $Ah? $AmHo([pic]sH hlVmHsHh? $Ah? $AmHsHhYfOh? $ACJmHo([pic]sHhYfOh? $ACJmHsHharAharA5? CJmHsHharAharA5? CJ(mHsHharA5? CJ(mHsHFigure 3. SWOT Analysis for Kodak Table 1. Evaluation Factors for Directional Policy Matrix\r\n'