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Case Presentation on Eastman Kodak:

organizational life cycle

Presented by: Shekhar kumar Batch: MBA-2017-18Department: Centre of management studies(Jamia millia Islamia)

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INTRO: Who was George Eastman?

• George Eastman was a philanthropist a genius and a high school dropout who invented a dry p late process in 1880 for making photographic plates.

• He was born in Waterville New York on July 12 1854.He dropped the school after the death of his father in 1868 and started working in an an insurance company and later became clerk in a local bank at the age of 19.

• He has achieved great success in his life.• In 1932 estman after a long illness committed

suicide by a gun shot leaving a note “my work is done.Why wait.

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EASTMAN KODAK • .

• Kodak is a worldwide renowned company which ranks as a premier multinational corporation and one of the 25 largest companies in US.

• Kodak company was one of the first in America to establish a plant for large scale production of a standardized product and to maintain a fine chemical laboratory

A MODEL OF ORGANIZATIONAL LIFECYCLE

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• The founding of an organization

• Occurs when entrepreneurs take advantage of opportunities to use their skills and competences to create value

ORGANISATIONAL BIRTH

• The life-cycle stage in which organizations develop value-creation skills and competences that allow them to acquire additional resources

ORGANISATIONAL GROWTH

• The life-cycle stage that an organization enters when it fails to anticipate, recognize, avoid, neutralize, or adapt to external or internal pressures that threaten its long-term survival

Organizational Decline and Death

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ORGANIZATIONAL BIRTH

1879 • George Eastman invented the dry-plate process and filed patent for a machine that coated dry photographic plates

1880 • George Eastman established the Eastman Dry Plate Company, at Rochester N.Y.

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ORGANIZATIONAL GROWTH

1884 • Introduced paper roll film

1889• Invented perforated

celluloid film

1900 • The Brownie box camera

went on the market with a price of $1

1935• • Introduced color film

1960• Brought the Instamatic

camera to the market

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ORGANIZATIONAL DECLINE

1980 • Fuji emerges as a serious competitor

1984• KODAK abandoned the drug

company and finally began to invest in the digital imaging product

2005• Perez began investing heavily in

digital technologies, shutting down film factories and eliminating 27000 jobs.

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Five stages of decline

There are five stages of decline:-• Blinded - In this stage organization are unable to recognize internal

and external problem that threaten their long term survival. example of internal factor are management change, employee morale, culture changes, financial issues etc, where as external problems are changes to the economy, political, government regulation, threats from competition etc.

• Inaction - In this stage gap between actual performance and acceptance performance increases. Top management takes little action to correct problem.

• Faulty action - In this stage manager may have made wrong decision because of conflict in top management team.

• Crisis - This stage has arrived only radical change in strategy and structure can stop the decline.

• Dissolution-This is the last stage of decline stage. In this decline is irreversible and the organization can not be recovered which leads to the death of the organization.

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ORGANIZATIONAL DEATH

December 2010: • Standard & Poor's removed

Kodak from its S&P 500 index

January 19, 2012:

• Kodak filed for Bankruptcy Protection The company's stock was delisted from NYSE and moved to OTC exchange. Following the news it ended the day trading down 35% at $0.36 a share

Feb 9, 2012• Kodak announces it will exit

the digital image capture business.

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Weitzel and Jonsson’s Model of Organizational Decline

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Blinded stage and its solutions

• Perez was blinded with the past success.• Hierarchal structure believing in the

omnipotence of leadership.• Could have implemented more innovative

and dynamic work culture.• Engagement of employees in decision

making processes.

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Inaction Stage and its solutions

• Shouldn’t have dumped Adobe’s innovative idea of transferring photo prints to CD’s.

• Could have focused on innovation to cope up with the competition with low priced Fuji.

• Kodak chairman Kay Whitmore should have taken the idea of integrating Kodak’s photo CD’s with Windows(instead of sleeping during the meeting).

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Faulty actions vs Prompt actions

• Perez, on becoming the CEO in 2005, brought out radical changes , which he shouldn’t have done.

• Instead of focusing just on innovation, Perez should have tried to reinvent the company.

• Kodak was late to recognize the problem, slow to react and went down the wrong innovation path.

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Crisis stage

• Once ranked among the top companies of the world, Kodak lost its share value and it came down to almost $1.

• After incurring heavy losses from operations(almost $70 a month), its future revenue depended heavily on winning patent lawsuits against Apple and Blackberry.

• It was time for Kodak to realize that it was an image company, not a film/camera company.

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Death stage

• Since the photo and image gallery have become digital, and advent of the smartphones, the digital cameras have become obsolete. The last pool of yellow-boxed Kodachrome rolled out the door of a Mexican factory in 2009.

• Became bankrupt in 2012, after listing assets of $5.1 and a debt of $6.8.

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Conclusion• Great example of strategic failure.

• Lessons we can learn: • External environment can be deceiving • Change happens• Greatest strength can be weakness • Innovation is not the perfect solution • Its not all over till its over

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Thank you