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Kodak

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Eastman, who founded Kodak in 1885, had two prerogatives. The first one was to create a common product: something as a user friendly product “as convenient as a pencil”, and second was to develop a revolutionary invention, anticipating customers’ needs. This long run approach allowed Kodak to blow away all its competitors consequently leading the firm to dominate the film and camera markets by 1976. At that time Kodak represented 90% of the film market and 85% of the camera market. Since the beginning Kodak was able to base its strategy on innovation, having at the same time a customer focused policy. Great innovation could result worthless without a customer fidelity policy. Therefore the firm decided to create user-friendly products. That is the reason why suddenly after the firm introduced onto the market a revolutionary product such as the roll of film, this could have created new opportunities alone, it also launched a new camera, easy to use for all the people, marketed with an emblematic slogan: “You press the button we do the rest.” Hence, Kodak carried out a penetration strategy with mass production at low cost and an aggressive marketing policy, with the objective of increasing market share or sales volume, rather than to make profit in a short term. Kodak’s core business was films, but it understood early that “money come from consumables and not from hardware”, hence they started to produce cameras, perceiving that the market was offering such a great opportunity to become a household name since the two businesses were complementary. This approach allowed Kodak to develop a razor-blade strategy, selling cameras at low cost, but profiting on film sales. Selling the cameras even below break-even point allowed to have a dominant market share in both markets, low camera prices boosted the market penetration of its camera and at the same time it increased film

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