Kodak Essay Example for Free

Kodak EssayThe purpose of this report is to perform an long analysis of the Eastman Kodak digital motion picturegraphy brand, and ultimately, to provide a sound foodstuffing strategy to their board ground on our findings. We do so by examining devil a macro view of the digital television tv camera pains as well as analyzing the brands history, positioning, success factors, and current ch wholeenges. We discovered that Eastman Kodak, man once the unquestion suitable leader in the film industry, failed to adapt to changing expert market apparent movements and was leftfield behind the digital revolution. Kodaks unsuccessful response to a major(ip) technological discontinuity has leave aloneed in a profound loss of market administer and profitability. We involve developed a market plan for the august state Kodak currently finds itself in, genius that pass on attempt to reinvigorate Kodaks brand as a premium name in digital photography by returning to its traditio nal values and competencies. eyepatch the company currently operates through three distinct parts Digital Film Imaging, Health Group, and Graphic Communications, we nonplus narrowed our scope to focus primarily on the digital film segment as we felt that this argona has the virtually potential for improvement in the near future.The Digital Film IndustryOrigins of the market placeThe evolution of the digital camera market mirrors the evolution of the technology and innovations surrounding photography itself. Throughout the 19th century the motivations behind innovations and discoveries in photography surrounded the speed and affordability of creating an exposure. Some of the earliest photographs took up to eight around hours of exposure to complete, and were often contained on flimsy and expensive materials, that did non lend themselves to creation easily shared. It is transparent that the desire to quickly create and share still imold ages existed more than a century be fore neo digital cameras were ever created.Early attempts at digitizing images for storage remained great(p)ly in the video resource segment, and really little focus was put on the technology for still images. The progress that was made was characterized by measly picture tonus and very difficult storage procedures. As a result, professional photographers and hobbyists clung to the old processes of growth film well into the 1990s. In reality it was the increasingly agonistical nature of the news media, particularly in the newspaper industry that led to some of the more workable innovations in digital still imaging technology. It was seen as a competitive advantage for a media outlet to take, store, and send images through digital transmission, sooner than wait for a slow development process before a picture could even be viewed. It is no coincidence that the first commercially available digital cameras were incredibly expensive and used roughly exclusively by photo journali sts.As was the case with the market, for still cameras relying on 35mm film for picture development, it was technological breakthroughs that spurred the growth of the digital camera market. With the development of JPEG file formats in the late 1980s digital images could be taken and stored on the same device using battery power. Although there are numerous competitive claims as to who entered the market first, Kodak was arguably the first entrant in 1991 with the DCS-100.The Growth of Digital PhotographyThe work shift from conventional to digital photography was a total shift of technology that not that all in all changed the way companies of this industry operate, except withal the carrefours and services they offered. Advancement in the information and communication technologies as well as signifi crouptly contri hardlyed in shaping digital photography, as well as the digital camera itself. Computers were existence used to store and edit photographs, part internet offered an easy way to share and distribute doubled copies of the image to disparate people at the same time. Furthermore, the concept of a photograph being pilot light was eliminated as duplicate, unidentifiable copies of the image were possible. The key growth stages of the digital photography can be summarized as follows.Steven Sasson (of Kodak) invented the digital camera in 1985 in Kodak research laboratories. The low operating cost, easy storage and scattering were the major attractive features of this new product. Instead of using film like traditional analog cameras they were able to store the image on internal storage or on rewritable memory cards.In 1986, many electronic cameras were released by different manufacturers, e.g., mandate released first still video electronic camera, Kodak 1.4 million picture element CCD, Nikon SVC, electronic camera with a 2/3-inch CCD of 300 000 pixels, Sony Mavica A7AF still video camera, (CCD) of 380,000 pixels which records images onto a 2-in ch floppy disks.The populaces first fully digital consumer digital camera was released by fuji cherry, with the feature that images could be digitally recorded on a removable memory cards. Since and so the improvement in camera manufacturing has go on over the years, as new players joined the race with the discovery of new dimensions of digital technology and its applications, and the wishing for new accessories. Hewlett-Pakards ink jet printers became consumer items. Sanyo, Samsung, Olympus also released new digital cameras, and Toshiba manufactured memory cards. union Photographic Experts Group (JPEG) created compression file format to easily transfer digital image electronically.The products were barely improved with the better understanding of digital technology as continued research and costs were well reduced in 1998, leading to exponential rise in gross revenue of digital cameras over the adjoining years. (See Exhibit 1 to see how digital camera gross revenue welcome skyrocketed since the turn of the century).New professions emerged diligence various available features of the digital cameras, and cameras were developed for the specific segments and niches, such as amateur photography, advertizing photography, chromatography column photography, documentary photography and scientific photography.Digital photography is still far from maturity, as products are forever introduced or improved though constant innovation. The need to develop specifications (sizes, dimensional tolerance for imaging media, and formats for all major users) and written standards for digital imaging are realized, developed by American National Standards bring in and International Standards Organization.Ultimately, the arrival of digital photography, combined with the ever-improving capabilities of computers to store and display photographs, and the Internet to share them helped revolutionize the major customer processes associated with photography. Photographs could no w be taken by consumers at virtually no cost, who could then tell apart to save or delete their photos with the push of a button, and decide to print them on a PC printer or via email. It is clear then that the industry is almost completely driven by both social and technological change.CompetitorsOverall, the digital film industry is a luxuriouslyly competitive one. An analysis of the forces that regard the long-run profit attractiveness of this particular segment would reveal that the industry has high threat of segment rivalry (existence of some(prenominal) large competing companies) high threat of new entrants (abundance of digital photography technology on brisk devices) extremely high threat of substitute devices (countless ways to put an image into digital format) high threat of buyer power (low differentiation level of most digital cameras) and finally, high threat of supplier power (cost of switching suppliers for a large digital camera company would be astronomical). Kodak manufactures and distributes a large number of different products, primarily focused around photography. The sale of each line of products comes with its own competitors. However, for the purposes of this report, the focus of the competitor analysis will be on cameras, both digital and non digital varieties.The camera industry had foundationwide sales of $35.5 billion in 2010. Given the large value of this industry, it is important to know what share of the market Kodaks competitors control. A look at the market for digital SLR cameras, disposable cameras and film follows.The serviceman market for digital SLR cameras is dominated by Canon and Nikon, who held world market shares of 37% and 33% individually in 2010. The remaining 30% market share is held primarily by Sony and Olympus/Panasonic. Sony sold 12% of the worlds digital SLR cameras in 2010, and Olympus/Panasonic had 11% of the market in that same period. Kodak was only one of the several competitors who comprise the remaining 7% of worldwide digital SLR camera sales.Low cost digital SLR cameras have come on to the market and are competing in the same space as digital condense cameras. A look at Kodaks website showed only one brand of digital SLR camera is being offered by Kodak. Since Kodak is primarily competing in the digital camera space through compact cameras, the shift in digital SLR cameras to a lower price point does not bode well for Kodak since it increases competition.Disposable camera sales in 2009 were comprised primarily of cameras under the Kodak and Fuji brands. Kodak enjoyed a 52.9% market share in this period, while Fuji held 18.1% of the world market. The majority of the remaining 29% of the worldwide market of disposable cameras came from private say brands, who sold 28.4% of disposable cameras worldwide. Disposable cameras like any other cameras come in two varieties, analog and digital. The market for analogue cameras has been decreasing over the years. For instance, t he sales of analogue cameras decreased from US$1,335.5 million in the United States in 2004 to only US$9.5 million in 2009. This is a decrease in sales of over 99% in only 6 years. Although Kodak has kept a leading position in the analogue market, the dissolution of the market for analogue cameras limits the value of Kodaks leading position in this segment.Kodak has also kept a leading position in the sale of camera film. However, this market segment has seen a similar fall in sales as the decrease in the disposable camera market. In this segment, Fuji is once again Kodaks largest competitor. Kodaks tagline Kodak Moments helps it maintain its leadership position in film, but the sharp decline in the sale of film and a strong competitor in Fuji once again limits the value of this leading position. The market for cameras has seen a rise in the competitiveness of one particular alternative product that may limit the growth potential of the camera industry in the future. Mobile phones w ith cameras built in now form the main substitute to cameras. Since these devices have many features such as video, audio, and internet browsing, and are relatively inexpensive, they represent a real threat to the camera industry. 80% of the world demand for the imaging devices and optical modules that comprise the cameras in mobile phones is handled by Panasonic, Sony, Sharp and Konica Minolta. Kodak does not compete in this market.Other substitutes that Kodak will need to compete with are counterfeit items. Not only are these items likely to be sold at lower prices, they are also generally lacking(p) in quality and could harm the brand of the companies whose products are being counterfeit.From this analysis of the current competitive landscape, we can see that Kodaks most important competitors in digital cameras are Canon, Nikon, Sony, Panasonic and Fuji. (See Exhibit 2 for a look at Kodak compared to its traditional competitor, Fuji). CustomersThe digital film industry targets a large number of consumers spanning different segments and demographics. The following will illustrate who these main consumers are and which kinds of individuals digital photography appeals to. SegmentsDigital photography is targeted to two major segments professional and non-professional consumers. As expected, the needs of these two target segments are quite different, and organizations in the digital camera industry market their product to appeal to these distinct expectations and needs. Digital camera companies, therefore, market their product to these diverse groups and consequently identify further submarkets and niche markets.DemographicsIn the world of photography demographic part plays very vital role in marketing the product. In this method of segmentation, demographics is important because customers wants, desires, preferences, and usages are potently associated with demographic uncertains. Interest in photography generally starts at early age, usually early teenagers . Consumers are not especially conscious about the brand but want to fulfill their purpose. However, this is the phase where a perception of the brand starts taking position in the minds and get stronger and stronger with the time. After this phase consumers of age 20 to 50 are divided into different groups. Some people adopt photography as profession, some use it for their extensive tourism habits, and finally some take it as fun and leisure action at law and some use it as their need. This use depends on their nature, living style and job requirement.Professionals, who adopt photography as occupation or as their hobby, are always more conscious about the quality and success results. They dont want to see that there is no photo in their camera after any event coverage or after returning from an adventure. They need more bona fide equipment with guarantee of better results because this is their earning source. If someone is pursuing photography just for fun and dont have passions for the hobby then they will typically not pay as close attention to the bells and whistles of the product.In terms of gender, photography appeals to both men and women alike. Marketing does not generally target men or women, although recent manufacturing of point and shoot cameras includes the product in a variety of colours for the consumer to choose from.Lastly, demographics in the digital film industry relies on the consumers income. The major manufacturers of digital cameras have realized this, and typically offer product ranging from budget quality, to expensive professional equipment.PsychographicsPsychology is also a strong variable to understand consumers. People are different based on their personality traits, psychology, life style and values. Psychographic compose could be completely different within same demographic group of consumers. For example, two individuals of same age group have same range of income like photography as a fun but they have different psychology. One is more caring about quality with regard to details captured in the pictures and the other more focus on the originality of the colours of the pictures. For this reason, camera manufacturers have produced cameras with a plethora of adaptable features, which can be modified to suit the users preferences.Important TrendsThe broad industry of photo imaging and cameras has gone through some profound changes over the past several decades. As expected, technological advancements over the past century are the prime drivers of the various trends this industry has witnessed.Perhaps the greatest switching this industry has seen has been the relatively recent rise of the digital camera phenomenon. Although the prototype for the digital film industry began with the development of Sonys analog-type Mavica electronic camera, this product did not gain immediate acceptance in the grocery store due to its high price and the lack of suitable peripherals (i.e personal computers). The larger tre nd towards digital cameras then was truly popularized in the late 1990s and early 2000s with digital point and shoot cameras, of which Kodak participated in at a much later stage than its competitors. With the release of these user friendly devices, digital camera sales increased by 75% per year by 1997 where film cameras increased by 3%. At first, the absence of an LCD screen for formatting, shooting, and reviewing purposes proved to be a hindrance to the popularization of digital cameras. once the LCD screen was introduced, the trend was ignited. Photos could now be viewed immediately, and kept or discarded as the consumer desired.Today, most major camera manufacturers have made the exodus from film to digital. Canon as well as Nikon surprised the world when they agreed to stop production of most film cameras, setting another trend that has continued to this day.Another major shift in the world of digital photography was the gradual branch of cameras on mobile phones. As technol ogy improved, so did the quality of cameras included with virtually every mobile device. As expected, this had an impact on the sale of cheap digital cameras, as the phenomenon was now available to anyone who had a mobile device. This trend continues to this day, with both iphones and Blackberries including high quality cameras with their mobile devices.Currently, there has been a revival of DSLR cameras, with Canon and Nikon holding the majority of market share. Although it is difficult to predict future trends in the camera industry, many market researchers, trend watchers, and technology prognosticators agree that digital is here to stay. Easy access to necessary peripherals such as personal computers and even printers has garnered quick acceptance of the digital camera by consumers. The move to digital will remain however, the relative maturation of the Japanese, North American and European digital camera markets may result in repeat buyers, as well as marketing cameras to for l ate adopters. This could all culminate in lower profit margins for some of the worlds leading camera manufacturers.