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Kodak and the Digital Photography

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KODAK and the Digital Revolution

1. Evaluate Kodak's strategy in traditional photography. Why has the company been so successful throughout the history of the industry? Kodak had several core competencies to its advantage. Of primary importance were its “user-friendly” qualities, cost, extensive advertising that helped built its name; perceived quality of its products and its customer focus that lead to strengthening an important core competency i.e. customer satisfaction. Kodak’s leadership also came from marketing and its relationships with retailers (for shelf space and photo-finishing) and also its investments in R & D. During its heyday, its technological capabilities and its rapid design to market cycle times were success factors. Kodak used a razor-blade strategy wherein film was regarded as the consumable so it sold cameras for low cost and profited from increased sales of films. 2. Compare traditional photography to digital imaging. What are the main structural differences in the industry? (Use the 5-forces model) | Traditional | Digital | Rivalry among competing firms in industry | Initially none until 1976 when Fuji came in | High- many companies producing different brands at all price category | Bargaining power of suppliers | Low – since Kodak was their main consumer | Low to Mod (number of types of digital cameras; global move towards digital suppliers); many China-base suppliers – lowering cost | Threat of new entrants | Low (shifting trend to digital photography) | Low (strong entry barriers due to high cost of R& D) | Threat of substitute products | Low – Kodak had many patents new…...

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