A NEW STRATEGY FOR KODAK

Running head: A NEW STRATEGY FOR KODAK
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A NEW STRATEGY FOR KODAK 2
Abstract
This paper intends to identify the new strategies for Kodak. In order to achieve the objective of
the paper, the key performance objectives of the firm have been pointed out. Different
approaches related to horizontal and vertical integration of the company have been suggested to
boost up the performance of the company. 
A NEW STRATEGY FOR KODAK 2
Five key objectives for Eastman Kodak
In 2011, the chief executive officer (CEO) of Eastman Kodak analyzed the present
situation of the company and decided to launch a new strategy that will help the company to
become the leader in imagining market. However, the progress for the new strategy was slow. He
has given effort to reduce the cost for developing new products but the strategies have failed to
draw enough sales to the company. The company has spent millions of dollars on developing its
competitive advantage and secures the future of the company. Kodak was considered as the most
profitable corporation in America, which gave its shareholders a return of 18% for many years.
The company has continuously invested in developing its competitive advantage in photography
business. It is observed that 40% of the revenue of company came from outside United States
(US). Though the company had encountered huge profit but the situation was not the same over
the past few years as it encountered external pressure in form of competition (A. Rahim, & M.A.
Rahim, 2009).
The five key objectives of the company that guides its growth are as follows:
1) Mass production helps the company to reduce the cost of production.
2) The company aims at maintaining its position in the market through technological
developments.
3) The company advertises its products extensively which helps them top cater to as many
customers as possible.
4) Kodak aims at developing the multinational business so that it can explore different parts
of the globe. 
A NEW STRATEGY FOR KODAK 2
5) The quality of film processing is to be maintained by adopting constant research in the
laboratories so that new aspects of photography come forward.
However, the objectives are latter modified by Chandler as he analyzed that there should
be drastic change in the business model of Kodak. There are four significant changes that
are made to the business:
1) Increase in control over the existing chemical imaging business.
2) Aims at creating Kodak the leader in electronic imagining.
3) Kodak made changes in altering its business motives by diversifying into new
businesses in order to increase the profit.
4) Give effort to minimize costs and improve the productivity level of the company
(Pride & Ferrell, 2007).
All the above mentioned objective is created for supporting innovation and development in the
company.
Objective essential for the success of Kodak
The new objective changed the imaging group of Kodak which included motion pictures,
consumer products and audiovisual products, consumer electronics and photo finishing. The new
objective filled the gap in the product line by introducing several new products, which are either
prepared by Kodak or any Japanese manufacturers or sold it under the name of Kodak. In order
to manage the market share of the company, Kodak took major steps to solidify the market of
film processing. It has strategized to stem the flow of low cost foreign photography papers for
acquiring control over processing market. The company has also acquired many companies in 
A NEW STRATEGY FOR KODAK 2
order to make its base strong in electronic photography sector. This acquisition increased the
number of customers for chemical paper products. The declining profit of the company was
forced to maintain tits level by massive cost – cutting, which improved efficiency of the products
related to photography. The objective of the company highlighted the fact that there is a need for
new strategies that will satisfy the customers to their imagining and recording needs. Kodak
entered information system, it was a new experience for the company, where they encountered
extensive competition from big players such as IBM and Apple. Kodak made a huge mistake in
entering market where it does not have expertise knowledge and is also unaware of the
competitive forces. Thus, the information system of Kodak declined very fast and reducing the
retained earnings of the company.
Vertical and horizontal integration of Kodak
Recently, the company has encountered troubles from various sources, which are related
to transformation of traditional to digital photography. The issues have originated from new
areas. Kodak was severely threatened by Fuji as the latter produced the same products at a rate
20% less cost than the former (Smith, 1999). However, Kodak remained ignorant to the threats
that were imposed on it by Fuji. The