Kodak Case Study

Kodak Case Study

Table of Contents

Contents

I. Problem Statement 1

1. Company 1

2. Collaborators 1

3. Customers 1

4. Competitors 1

5. Context 2

B. Segment Analysis 2

III. Objectives 2

IV. Our Recommended Plan 2

A. Brief 2

B. Core Plan 3

C. Strategy & Tactics 3

1. Short Term Tactics 3

2. Long Term Strategy 3

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I. Problem Statement

1. To prevent erosion of market share in the US market and re-capture lost ground.

2. To mitigate the low-pricing strategy of competition

II. Analysis

A. Situation Analysis

To understand and gauge the given scenario of the Eastman Kodak company, we've performed a %c analysis of the situation.

1. Company

Perception & Standing: Kodak enjoyed strong brand presence and market dominance in the US in early 90's targeting the Superpremium and Premium tiers. The flagship product, Kodak Gold Plus was well recognized and perceived as industry standard.

Profit Shares: Kodak's sales were 6.33 times that of its closest rival – Fuji. The gross margins on Gold Plus amounted to $2.44/roll resulting in a total gross margin of approximately $1100mil.

Technology: Kodak planned to reinvent its product line by introduction of a new emulsion technology to increase exposure latitude.

? Kodak had established an impactful presence in the market and had developed a good lead, in terms of profits and market share, ahead of its biggest competitor.

2. Collaborators

Dealers: The company's large distributor network helped kept the market penetration levels high. The incentives for the dealers were the high margins offered per roll by Kodak - 70 cents as opposed to 61 cents offered by private labels.

3. Customers

Market Size and Share: The US photo film market in 1993 was approximately 670 million 24-exposure rolls, with Kodak owning 469 million of this pie.

Product Awareness: The average consumer perceived film as a commodity, and differentiated between the available options based on brand awareness/loyalty and price sensitivity .

Purchase Motivation: Professionals' and serious photography enthusiasts' purchase decisions are driven by film quality, while the price sensitive segment differentiated between products based on prices. There's also a third consumer type – the Kodak brand loyalists.

Usage Rates: Varies across different segments and also depends on peak seasons.

Positioning: Kodak's stronghold in the market has been based on customer loyalty and product quality albeit at a higher price.

Information Sources: Advertisements and distribution networks are the main consumer information channels.

? This analysis illustrates a market opportunity which hasn't been tapped by Kodak yet, but where its competitors are well-established.

4. Competitors

Types: The competition is broadly categorized into Other Brands and Private Labels.

Threat: The competitive pricing offered by other competing brands appeals more to the price sensitive user. Private Label products have a lower price advantage over the branded products. The higher gross margins vis-à-vis the norms of the photo film industry, which is effectively contributing to the decline in its market share.

Technology: Fuji and Konica are working with advanced technology to provide higher quality films at discounted prices. Reports indicate that the quality differences, which are the basis for higher pricing, are uncertain.

Positioning: Kodak has a good standing in the Premium tiers, but no product catering to the rapidly growing economy segment of the market. While Fuji, its main rival in the battle for global market share supremacy, has presence in both premium and