Kodak Digital Imaging Strategy

Submitted By elespud
Words: 1032
Pages: 5

Kodak´s digital imaging strategy was to develop a transitional development from a chemical photo company to be the leader of a digital high-tech imaging business. To do this Kodak hired George Fisher as the new CEO, this was a strategic move because he had experience in the field of R&D and he had previously transformed the strategy of Motorola and Kodak was looking to do the same. The strategy was decided in the context of the situation which the firm was facing. Even though, that during the 1990´s, Kodak was the leader of the industry, the CEO knew that there was a rapid change in the technology and Kodak had to respond to it. In consequence, they had to modify their internal resources to be able to respond positively to these changes. Kodak decided to transform their chain value into the digital industry. So during the first years they only made selective incursions into traditional photographic imaging, which it did work for Kodak because the change was not so fast until the 2000´s. Therefore, as Kodak was hoping that in the commercial markets, people in emerging countries would still use film cameras, they decided to apply a hybrid approach where the firm would introduce those aspects of digital imaging that could offer truly enhanced functionality for users. Thus, they created a self service facility for digitizing, editing and printing images.
Kodak was the pioneer on innovation for digital images. For this their main resource was the role of the retail kiosks. The idea was to develop a network on the commercial market and they had the pervious infrastructure from the old technology that they had to transform for the digital imaging. The firm was going to use the opportunity it had: build and extend the existing market strength due to the positioning they had at that point in time and gradually change to serve the digital market. Therefore, Kodak was presenting an incremental approach strategy to the transforming market, on both commercial and consumer market. However, Kodak´s main idea was to maintain a mass-market leader by providing simplicity, quality, and value in the consumer market because they were providing easy solutions to customers to transition to digital photography while exploiting Kodak´s core brand and distributions, both of their best resources the firm had in its value chain. So in 2005 the software Easyshare system was in place and enabled a network where customers could take pictures on digital cameras and view their images on different devices, print them all through Kodak´s system. Figure 2 shows clearly how the network was going to maintain a growing network through their commercial and consumer market. To follow this strategy, Kodak had to generate activities to its chain value and this meant to partner up with companies that were leaders in digital technologies and hardware & software products. In consequence the firm allied with Canon, AOL, Intel, HP, Olympus, Sanyo Electric Co. and IBM. Additionally they made some acquisitions that are shown on table 2 that were essential to complement its own expertise.
In conclusion, Kodak focused its strategy on their internal resources and its core competences which were: Brand, Distribution, Technology, New product Development and Financial Resources and tried to adapt gradually the value chain so that they would be able to develop their products assuming that Kodak would be able to move away from its tradition long and meticulous product development to be able to enter the fast-cycle world of electronics.

The strategy failed because of three main reasons. The first one is the development of their strategy towards the fitting of the industry by the 2000s, the second the ability that Kodak had to sustain the competitive advantage and finally the organizational capabilities that were not adequate to the competitiveness of the market.
The development of the strategy worked for the first decade, however from the 2000´s onwards, the industry was