KODAK

STRATEGIC ANALYSIS

1

DONE BY

Romaric  ZEIDA 2337

Aboubacar GARBA 2340

Michele HENRY KILY 2346

Mansour FALL 2349 Mamadou habiboulaye DIALLO P0559

Directed by Ph.D M. WAHABI

2

Kodak’s ultimate aim is to remain to be one

of the most successful business stories.

Thanks to its 130 years of life, this company

has the background and the experience

required to keep being competitive.

1

3

Mission

Kodak searches continually to provide to its consumers the best solutions in the domains of photographic products and to keep giving a good return in investment to the shareholders

Goals Keep to stay the wold’s leader in the sector

of photography.

Diversify its activities toward other different fields

Pursue a general expansion policy and to look forward the acquisition of companies performing in other sectors

4

5

Objectives

To be one of the most important actors in pharmaceuticals and biotechnology thanks to the Life Science Division and Sterling Drug

Take profit from the 100 billion dollars market of the pharmaceutical industry

Promoting the 35mm cameras and equipment which present a large growth potential

Focus on the photofinishing segment by acquiring other sepcialized companies

EXTERNAL ANALYSIS

6

7

PESTEL ANALYSISPolitical / Legal

Political stability in USA George Bush Senior’s presidency and end of

the Cold War The economical sector is ruled by antitrusts

laws which direct the mergers ,acquisitions or joint ventures processes

8

PESTEL ANALYSIS

Economic

Relative stability of the US economy

Fast growth of the international exchanges

Large growth perspectives on the photography sector and specially in Europe

9

PESTEL ANALYSIS

Social

Photographic devices become more and more used in the familial environment

Photography’s use is no longer limited to the professionals

10

PESTEL ANALYSIS Technological

Evolution toward the digital quality of pictures

Particulars can do themselves the photofinishing

(development) with domestic laser printers

11

PESTEL ANALYSIS Ecological

Important use of lithium specially for batteries

Recycling problems risen by this material

People become more and more sensitive to this situation

12

Five factors of Michael Porters

13

14

1) Risk of new entry by potential competitors

The barriers to entry are very high. One of the reasons that there is a high entry barrier is that each company which are currently in this industry have strong brand image leaving a harder job for new company to get in. Additionally, existing companies can take advantage of the absolute cost advantage achieved by large volume of shipments and economies of scale.

15

2) Rivalry between established firms

Established players in shipping service industry compete rigorously for a market share, as demonstrated by the battle between KODAK and Xerox, Sharp, Canon in the photocopier market, the company who responses first to the constantly changing environment wins. Established companies have to strive for continuous improvement in quality, lowering price, and innovation. There is very low switching cost for consumers in this industry making rivalry even more intense.

16

3) Threat of substitute products

There are not many substitutes product in electronic imaging and computer mass strorage devices and Photofinishing market because of the level of the technology that used in that sector.In other hand there are not also many substitutes product in pharmaceuticals and biotechnology market.

17

4) Bargaining power of suppliers

The supplier power within this industry is fairly low. This is because the companies that are operating in that sector are very huge, so they buy in large quantities and can turn to different suppliers easily.

18

5) Bargaining power of buyers

The bargaining power of buyers in photofinishing, electronic imaging and computer mass storage service industry is high. Cost associated with switching from one company to another is very low. Therefore, buyers can turn to a company that offers lower price and service innovation with ease.

19

Keys of Success Factors Finance: The return on investment on the PHOTOGRAPHY INDUSTRY is very high, because the growth in the industry that is attributable to factors according to Standard and Poor’s Industry surveys: new and improved products and services, and a population mix that has increasingly shifted toward a relatively affluent and free spending 25- to 40-year-old age group.

Human Resource: the PHOTOGRAPHY INDUSTRY has now a strong employee base because the need to create a good environment that encourage the innovation. 

INTERNAL ANALYSIS

20

21

Value Chain of Kodak

Imag

e

Cap

ture

Dig

itiz

ati

on

Sto

rag

eR

etr

ieval

Transm

issi

on

Pri

nti

ng

Manip

ula

tion

Pro

ject

ion

R&D

HRM

Finance

22

Kodak’s SBU Kodak has four distinct sub-

market Digital cameras Home printing Online services Retail kiosks and mini-labs

23

Kodak’s strengths

• Innovation• Distribution channel• Leadership in photographic market• Silver-halide technology

24

Kodak’s Weaknesses

• Size and bureaucracy• Corporate Culture• Non rational Escalation of commitment• Kodak has a lot of Unprofitable product

which decrease it’s profit

25

Core Competences/Distinctive Capabilities

Innovation

Distribution Customer services

Technology

26

Financial Ratios (2010)

Current Ratios : Current assets / Current liabilities = 1.4 KODAK’s current assets can cover all of its current liabilities, that is a desirable situation. Quick ratio: Current assets-inventory / Current liabilities = 1.0 The current assets can immediately cover all of the KODAK’s currents liabilities 

27

Asset turnover: Sales / Total turnover = 1.0KODAK’s total assets are used efficiently to produce sales Return on Investment: Net income Before Taxes/Total assets = -10.7%The rate of return on total assets employed by FEDEX is not appreciable in this year. KODAK has a problem of Return on Investment.

28

Competitor Analysis

Kodak’s main competitors include Canon, Nikon, Sony, Fuji

16

29

Canon

•Price•Advertising•Market Share•Product Design •Technology•Product Quality•Distribution

SCORES

1 2 3 4 5

30

Nikon

•Price•Advertising•Market Share•Design•Technology•Product Quality

SCORES

1 2 3 4 5

31

Fuji

•Price•Advertising•Market Share•Design•Technology•Product Quality

SCORES

1 2 3 4 5

32

STATEGIES FORMULATION

33

SWOT analysisSTRENGTHS WEAKNESSES

•A good brand image among retailers provides them with a measure of comfort•Leadership in photographic market•Innovation, taking risk and move quickly•Organizational and management change.•Life science drug division and sterling drug acquisitions

•Size and bureaucracy• Corporate Culture• Non rational Escalation of commitment•Kodak has a lot of Unprofitable product which decrease it’s profit•Kodak had diverted its attention from the retail of photo film business

OPPORTUNITIES

Kodak must go on in growth strategy and continue to innovate new products that can be profitable for them.

Kodak must improve its way to communicate with its employeesIt also must improve its corporate cultureIt must stops manufacturing product that decreasu its profit and stops acquiring without profitability

•Investment•Multi-Cultural marketing•Expansion in the field of Health care•Digital Image• New alliance, acquisitions and merger

THREATS Kodak must not only focus on quality but also on low cost product in order to keep its customer.It should make more market studies for detecting the need of customer in order to sale the most qualified product.

Kodak must do some studies in order to block its competitors and avoid to neglige any productIt has to make some studies about its competitors and get informations about them.

•Competitors: FUJI is taking its place in the photographic industry•The introduction of electronic imaging •Shortage of silvers that made them vulnerable in the foreign market

34

BCG Matrix

Market Growth rate = 17299-13541/13541 = 27,75%

35

The market growth rate of KODAK is High and it is known as the giant of the photographic industry and health care, so it is positionned on the Stars case, it means that i has market share in rapidly growing market the recommended strategy is growth, add resources and build the business further based upon market projections.

BCG Matrix

36

Mc kinsey ‘s Matrix

Evaluation of internal factors:

37

Mc kinsey ‘s Matrix

Comments: Strengths: Kodak must completely take an

advantage from his strengths because it has abilities in certain domains which are very necessary in this sector of activity.

Weaknesses: In the average, Federal Express has some weaknesses that can shoot it down or ruin it. So it must try to adapt itself in order to avoid the risks that might come from its own organization.

Evaluation of internal factors:

38

Mc kinsey ‘s Matrix

Evaluation of external factors:

Comments:Opportunities: The coefficient obtained from this framework is 2,7. So we can say that the company can take advantage from the environment on the average because it’s a very complex environment which is not stable and certain.

Threats: We have a coefficient of 2,45. so there is an average risk that the company must focus on. The most important to take care is the high level of competition.

39

The Strategic Position and Action Evaluation (SPACE) Matrix

Space’s matrix ElaborationFinancial strength (FS):

Return on investment : 1Liquidity : 5Leverage: 2Working capital : 4Average: (1+5+2+4)/4 = 3

Industry strength (IS):Growth potential : 5,5Profit potential : 4Capital intensity : 3,5Average: (5,5+4+3,5)/3= 4,33

Environmental stability (ES):Competitive pressure : -4Technological changes : -4Barriers to entry into market: -2Average: ((-4)+(-4)+(-2))/3= -3,33

Competitive advantage (CA):Brand image : -1Technological know-how : -1Control over distributions: -2Average: ((-1)+( -1)+(-2))/3= -1,33

Conclusion:Directional vector coordinates:X axis: -1,33+(+4,33)= 3Y axis: -3,33+(+3)= -0,33

40

The Strategic Position and Action Evaluation (SPACE) Matrix

41

YOU