Eastman Kodak Company: Funtime Film - SPARCS

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TO: George Fisher, chief executive officer, Eastman Kodak Company FROM: Dong-ock Kim, Min-geuk Kim, Keehyung Kim, Yohan Jo, Huang Qiuling, Dorjsuren Bayarmaa RE: Eastman Kodak Company: Funtime Film DATE: April 10, 2007 First of all, we’ve analyzed about Kodak’s circumstances and problems. Next, we will recommend a strategy for Kodak. From surveys, people started to think films as commodities, but buyers often select films depend on price only. Even though pretty high percent of films are sold by private label, Kodak can’t sell film on a private label basis because of 1921 consent decree still in force. According to SWOT analysis [Exhibit 1], BCG matrix [Exhibit 2] and Porter’s 5 forces [Exhibit 3], we tried to understand the circumstances of Kodak. From these analyses, we’ve found that Kodak is in trouble now because of shrinking of market share and low sales growth rate. Therefore, we thought that Kodak should use the strength of their overwhelming market share and high gross margin compared to other companies to break through this hardship. After that, we analyzed the reason of decreasing market share. First of all, 'Price' is relatively higher than other products and their quality is not very outstanding. - 1 -
By the evaluation of the consumers, even Kodak Ektar has lower quality than Kodak Gold Plus. Furthermore, though Polaroid High Definition is price brands ($2.49, which 0.71 of Kodak Gold Plus, it means very cheap), consumers evaluated it has the best quality. Appearance of many competitors can be another reason of shrinking market share. Polaroid and Fuji started incursion into Kodak's territory. Then, let’s think about the situation of doing nothing. Market share of Kodak will diminish continuously like it has been. Through the calculation [Appendix 1], we can conclude that there is a risk of decreasing profit of Kodak. It means that Kodak has to make some strategies. According to the case, film market’s annual unit growth rate is only about 2%. It means that you can’t expect exponential growth of new-comer consumers anymore, so you have to make potential consumers to buy Kodak’s product. Potential consumers here not only include present consumers who buy competitors’ product but also future consumers such as children. Therefore, Kodak’s first objective is to make at least 76% of new-comer consumers and 20% of competitors’ consumers buy Kodak’s product in a year. In addition, Kodak can get more profit if Kodak’s customers buy - 2 -
Page 1: Eastman Kodak Company: Funtime Film
Page 5 and 6: than Gold Plus, if Gold Plus users
Page 7 and 8: Exhibit 1. SWOT analysis Internal S
Page 9 and 10: Exhibit 3. Porter’s 5 forces Fact
Page 11: Appendix 2. Funtime evaluation Gold

Eastman Kodak Company: Funtime Film - SPARCS

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