strategic challenges of Kodak Company (Research Paper Sample)

BUSINESS Name Course code Instructor Institution City/State Date * Introduction Ordinarily, about 54% of the organization tends to suffer organizational problems. These problems have over the years been considered to be detrimental to the success of the organization. Most of the organization thus keeps on struggling in the management due to poor strategies that are used. According to Kotter (2014), organization that has failed to use appropriate strategies will always make losses in the long run. Poor strategies include poor financial management, poor marketing, lack of technological development, poor research and development, lack of customer focus and lack of performance evaluation. These strategies are vital to the success of any organization (Kotter, 2014). Fundamentally, failure to use these business strategies may lead to low efficiency in the business and thus reduced sales and profitability. The present of competition in the market make organization to remain innovative, they are constantly researching to understand the consumer behavior so as to be on the competitive advantage. The internal and external environment of the business needs to be scrutinized to make it shine in the market. Basically, this task will analyze the challenges that are faced by Kodak Company which has been a global leader in the films industry for decades. This task seeks to analyze the strategic challenges of Kodak and how they have reduced it efficiency. Besides, it shall discuss the solution to the challenges (Anonymous, 2015). * Overview of the organization. Kodak Company has been in operation for over 130 years. The company started its operations in 1888 and was mandated to fill the huge gap of photography that was present then. Kodak was actually called the corporate dinosaur in the photographic film industry in the previous years. Based in Rochester, New York the company started as a company which sold camera film and diversified to other products that have seen it make huge profits in the recent past. Kodak has majorly invested in the film and colored photography from the year1880's which a major niche was then. The company was able to achieve a $1 billion sales mark in 1962 and this was the beginning of its success. Kodak got the wide market in US by 1976 by about 90% and thus became the pace setters in the photography industry. The company profitability was projected to be $20billion in 2015 10 years ago. However, the target was not met as the company was only able to make $6billion.This was attributed to the management issues and strategies. The profits have been reducing significantly due to poor strategies as shown in the graph below (Anonymous, 2015). * Strategic goals and Challenges. SWOT Analysis SWOT analysis play a pivotal role in scrutinizing Kodak’s strengths, weaknesses, opportunities and threats as it strives to remain competitive by providing quality products. Kodak has been a global giant in the photographic film industries for about 130 years. Its strengths come from the strong brand name that has been established for a century. The brand name is able to draw customers to purchase the products. The company enjoys its sovereignty in the pioneering of the photography since 1888.This means that it has a wide market because of the established brand. Most of the clients both the old and young have perceived the brand as the best. The company has a wide diversification of products that spans from analogue cameras, printers, films, digital cameras, medical films, chemicals equipment, , RIS, digital x-ray and PACs has enabled the company have wide global market and networks. The company’s network has a wide customer base though they are not willing to buy the products due to pricing strategy among other reasons CITATION Mik14 \l 1033 (Myatt, 2014). Though Kodak has a strong brand, it is coupled with a lot of weaknesses that makes it not to make profits. The company has failed to incorporate fully technology into the company. Though the company has been a pioneer in the production of digital cameras, it has strategized to put more focus in the production of more analogue cameras than digital. The fear of digitalization is attributed to the cost implications that the managers are not willing to risk. The company has failed to concentrate on the consumers taste and preferences and thus most of them choose to buy from its competitor (FUJI) which has fully engulfed technology. Besides, the marketing of the few digital appliances is weak and this makes it hard for the customers to buy the new products. These factors have made the company to grow with little direction hence no corporate contro CITATION Kam12 \l 1033 (Munir, 2012)l. However, there are various opportunities that the company can venture in. The company good reputation and experience in the market can make the company secure contracts from the government that may be able to raise its profitability. The various departments in the Kodak Company such as applied and digital imaging, entertainment imaging, professional imaging, consumer imaging and health imaging ensure that the company has wide markets to secure contracts from. In addition, the product diversification is vital in giving the customers product preferences and tastes. The presence of technology and wide market are greater opportunity for the company to engage in so as to be on the competitive advantage CITATION Mar151 \l 1033 (Cohen, 2015). However, the quest for innovation by Kodak has been demoralized by competition in the market. Competition is the major threat to Kodak Company. There are over 75 digital camera producers who make more than 120 models. The competitors of Kodak have chosen to produce what it makes and add more features. Fuji which is a major competitor has mimicked Kodak’s model of production and modified it further to attract more customers. Hewlett-Packard Company has also become a competitor in the printer manufacturing. Apart from the increase in foreign and domestic competition, Kodak also suffers other threats such as slower market growth. The slow growth of market has been attributed to the recent change in customer’s tastes and preferences. The customers are looking for advanced and complex cameras at very low costs which industries have failed to produce CITATION Joh14 \l 1033 (Kotter, 2014). Porters Five Forces. According to this tool, the photographic films industry could be analyzed on the basis of industrial rivalry, substitutes, bargaining power of suppliers and buyers and potential entrants. In the recent past, competition has facilitated the emergence close substitute. The emergence of smart phones has given the customers alternatives for photography. Some of the smart phones such as Infinix and Samsung Galaxy have a high image quality and better storage space than some of the digital cameras. Competitors are also on the rise in the production of other substitutes such as CCTV that are able to take quality photographs at a distance. In addition, there is also the possibility of potential entrant in the market. Due to the advancement in technology, innovation rates are high and therefore there is a high propensity of future camera manufacturing industries. The quest for digital camera that is efficient, water proves and affordable makes most of the companies to plan to produce them in future. Other companies such as Apple, Samsung, Toshiba and HP have visualized photography industry as a potential area of focus in future. Kodak profitability may fail to rise significantly due to high competition in the future. There is need for more innovation in the industry so as to beat the competition and rise in profitability CITATION Don15 \l 1033 (McCubbrey, 2015). According to Mahoney, innovation has created industry rivalry. This may affect the production and profitability of Kodak in the future. Both Fuji and Samsung which are major competitors of Kodak are seeking market attention. The customer behavior has changed in the recent past; most customers have decided to have smart phones that are able to multitask by making quality photos. In addition, they are also seeking for sleek, durable cameras that have more features at the lowest cost. This makes the different companies compete for the customers through innovation. There is also transfer of innovative ideas from one company to another which makes it hard for the production of a very unique product. The bargaining power of the buyers is yet another force that affects the company. Most of the customers tend to be very speculative in the products that they buy. Customers are looking for the latest cameras. Only the latest models tend to be loved by customers. This tends to affect Kodak because the company has majorly focused in the production of more analogue cameras than digital. The few digital cameras that are produced by Kodak have had low sales. This is because the company feels that its price should be high due to the value of the product. Kodak Company uses value based strategy whereby the customers get the values for the product that they buy. This is done by free after sale service and delivery and producing durable goods. However, the customers feel that the values are also given by the other competitors at a lower price CITATION Mar151 \l 1033 (Cohen, 2015). The last force entails the bargaining power of suppliers. The suppliers play a pivotal role in the development of the company. Most of the suppliers have deceased from giving credits to their customers. They will prefer dealing with customers who pay cash first before engaging those that needs raw materials with credit. Silicon Company is one of the suppliers of chips to Kodak which has embraced this strategy. The company prefers those that pay cash than creditors and thus this has affected Koda...