SWOT Analysis for Kodak - Case Study Example

Kodak Customer name Subject Name Here Instructor’s Name Here April 6, 2012 Executive summary The article Kodak as “a victim of the digital revolution” depicts the failure of Kodak due to reluctance to change when as it major competitors Fuji film made progress due to immediate acceptance to change. The report mainly focuses on the immediate reluctant to change in terms of the digital revolution and when the company fully decided to change it was too late for them which eventually led to its downfall (Kodak). An explanation of the current market for the films will be useful to readers as it states of the current market environment. With the issues that are discussed in the report, other competitors and companies ought to learn from Kodak so as not to make the mistakes it made, that eventually led to its downfall. Table of Contents 1.0 Overview 3 3.0 Limitation of Kodak Strategy: Theories on Strategy and Change Perspective 6 3.1 SWOT analysis for Kodak 6 3.1.1 Strengths 6 3.1.2 Weaknesses 7 3.2 Competitive Forces Model 7 3.2.1 Lack of Cost Leadership 7 3.3 The Rationalistic Approach 7 5.0 Recommendations 10 5.1 Human resource practices 10 5.2 Leadership practices 11 6.0 Conclusion 11 1.0 Overview This report emphasizes on the case of Kodak as it tries to survive, the company plans to change from a film company to a printer company. Fromm the given case study on Kodak; it is evident that the company is struggling much so as to survive and it hopes that the bankruptcy protection will help to slash what it owes retirees and force much bigger technology companies for the use of its patents, though there are doubts whether Kodak will be able to squeeze the billions of dollars out of its patents. This reports sets out to discuss the reason of Kodak’s failure in the digital revolution, limitations of Kodak’s new strategy of repositioning itself to a printing company, an explanation of how theories of cultural excellence and the concept of organizational learning could help improve Kodak’s adaptability and agility to future challenges in the market, and a list of recommendations of human resource and leadership practices that may promote organizational learning and modify Kodak organizational culture. 2.0 Logic and strategy In the past decade, many companies and industries such as Kodak and Fuji have found it difficult to weather past digital revolution. The technology of phones like smart phone, laptops and digital camera has gradually reduced the need for traditional films. These changes in technology have contributed a big deal to the down fall of not only Kodak but also other digital industries. For any business idea to thrive and yield the required outcome, the strategic choice of its approach must be accompanied by logics and critical decisions. This principle of strategic approach to strategic ideas so that the ideas generate the best possible outcome has been a great debate between two schools of thought i.e. the Generative Thinking Perspective and Rational Thinking Perspective (Dyer, Kale & Singh 2001, 40). Most companies apply the Rational thinking perspective to approach their strategies because of its mutually exclusive and collectively exhaustive nature. From its commencement, Kodak has applied the RTP approach to address the production and sale of their products (film and cameras). Kodak strategy has been selling cameras at a low cost and the films at a relatively high cost which contributed to Kodak growth and profits in its earlier years. The business therefore depended highly on the profitable margins collected from the sale of films. This move made the Kodak management to progressively pay less attention to the equipment (cameras). The situation got worse when Fuji joined in the market share and approached their strategies using GTP. The approach helped the Fuji Company to concentrate more on the equipment and making innovations that moved with the technology since by then the digital technology was at its full swing. The approach enabled Fuji to surpass Kodak in the market share therefore a financial loss. If only Kodak Company had used the GTP approach in the business it would have allowed them to move with technology and hence would have not missed a step in market share (Pettigrew 1987, 655). 2.1 Digital Revolution and Evolution Due to its sluggishness in innovating and inventing in technology, Kodak has been overtaken by event and time. With Sony Corporation introducing a filmless digital camera that can display pictures on the screen then be printed on paper, Kodak was still in the era of silver halide technology. Again, the pace at which they revolutionized their products was too slow so that by the time they introduced the products in the market, the other competitors had already flooded the market with their products. Consequently, in the need to change their products from the traditional ones to digital ones, the company had to change everything in the company so as to embrace technology. This move proved to be more expensive more than they had earlier thought. If only they had revolutionized their products and service gradually without being left behind by technology they would have survived the losses (Schoely 2005, 17). Since the digital age had shaken the imaging industry and that Kodak needed to apply the same revolutionary changes internally but due to its slowness it was forced by the market to change. Kodak would have therefore addressed this change by evolutionary means by slowly allowing and adopting the business strategy incrementally since the beginning introduction of digital change at around 1980. In the presence of this, the film would have benefited from undergoing a radical revolutionary change and it would have allowed Kodak to move free from the past. Finally, the evolutionary change approach has failed Kodak in the past and even to date (Barney 1991, 115). 3.0 Limitation of Kodak Strategy: Theories on Strategy and Change Perspective Kodak in their new paradigm shift strategy has a number of limitations that might see them unable to establish a significant market share in the print industry. Kodak once a victim of the change in technology, to avoid this reoccurrence any new strategy should have gotten Kodak at the front of emerging with and use of technology in the field they choose for their new business (Bala 1997, 72). Instead Kodak do not seem to have a strategy that can ensure their survival for another decade as they choose involve themselves in the printing business which is also coming under threat from new computing devices. Looking at the company’s new strategy through a change theory perspective the following issues were found. 3.1 SWOT analysis for Kodak Kodak seems to not have comprehensively analyzed its internal and external environment. Kodak ignored it’s the photography business where it had outshone rivals in the last decade, they should have innovated this business by involving themselves in software for making changes to photos and devices that would include the technology they had patents to. 3.1.1 Strengths Kodak seems to have disregarded most of the input from its functional level; having more than 1000 patents in its name Kodak’s R&D could have been the most suitable source of technology that Kodak could have used to position itself strategically as the market leader, instead they choose to go into the unfamiliar business of printing. 3.1.2 Weaknesses Kodak shows instability in their executive level of management changing executives many times but still show no time of an improved financial position. Though the leaders at the organization might partly be the reason for this continued poor performance, but the lack of a collective vision at Kodak may be the one issue most responsible for this apathy. Kodak should avoid changing its leadership so many times instead they should make and adopt a good collective vision that the executive can use to steer Kodak into the contest for market share in its new business. 3.2 Competitive Forces Model Kodak failed to factor in the strengths of established players before immersing themselves in the printer and ink making business. They also had information about which rival technologies are popular and make the printing business hazardous as they may soon offer the same functions as printers more at a lesser price (Appelbaum , Normand and William1998,301) . 3.2.1 Lack of Cost Leadership Kodak’s move to sell printers at slight or no profit margin at all, this can only lead to further woe on its financial state. The better move would be to make cheaper printers and ink but of higher quality than printers in the market that have the same prices. 3.3 The Rationalistic Approach The decision to go into the print business fails the rational test as it the goals connected to it is unachievable in the long run. This is reflected in the Organizations being unable to market its printers profitably. Culture Excellence approach and the concept of Organizational Learning Kodak’s adaptability and agility to future challenges in the market can be improves through the aid of the culture excellence theory approach. Inherent to the solution, the concept of organizational learning would be of help. This would be in the aim of improving the company’s effectiveness in its operation towards the attainment of the organization goal coherent of the market efficiency and effectiveness in regard to its products (Taylor & Francis 2010, 14). Remarkably, an organization’s excellence is dependent on managerial practices. This is on functions of planning, controlling, organizing, staffing, leading and coordination. All these functions are inherent to human resources and thus human relation. In relation tom market challenges, these managerial functions will consequently be linked to public relation. Therefore, in solving of the market challenges, Kodak’s managerial team need associate its solution strategies to the theories of culture excellence. The culture excellence approach will enable the company to build value. This will consequently lead to improved product market with an aggressive competitive advantage. Prior to market excellence, organizational effectiveness need first be attained before going to external part of the problem. These will only be attained through organizational learning where Kodak will be able to learn about its environment, both internal and external consequently forming a foundation for their solution strategies (Crossan & Guatto 1996, 109). Organizational culture is a key factor to an organization’s success. Consequently, cultural excellence approach will lead to success of Kodak which will help it retrieve itself from the digital revolution crisis (Shera 2008, 276). On the other hand, external factors that have greatly affected the company will be held under organizational learning. Kodak needs to have extensive knowledge on its external environment and understanding of the digital revolution trend. Kodak products that are mainly lodged in photography and printing machines are highly affected by the digital revolution. Consequently, Kodak should take measures on early tapping of information regarding the trend. This will help the company to immediately move or respond effectively to such changes and market demands. On the other hand, Kodak products’ market has been significantly affected by intellectual property ownership. In regard to cultural excellence, intellectual property ownership and management will be a matter of concern in the solution development. Proper understanding of the copyrights, trademarks and patents in the industry under organization learning will help form them solution strategies (Crossan &Guatto 1996, 112). Concurrently, cultural excellence that will help create organizational value will result to increased share value and effective operation in selling of assets and patents. Consequently, the company will be able give franchises to develop its products as well as manage it effectively. Being a much known company in the industry, Kodak was able to roll over the digital revolution in the beginning bearing in mind that it was among the first in the digital products invention. However, Kodak failure arises when it failed to act when it was needed. Thus, the digital revolution consequently overwhelmed the company inherent of its products. Through the approach of the theory of cultural excellence, Kodak will be able to act when necessary effectively to counter the market challenges. In addition, the company will require organizational learning to effectively understand its internal and external environment improving Kodak’s adaptability and agility to future challenges in the market. 5.0 Recommendations 5.1 Human resource practices Various human resources and leadership practices are applied in most organizations so as to promote organizational learning and modify the organizational culture. Also in relation to Kodak certain human resource and leadership practices ought to be used so as to promote organizational learning as well as modify Kodak organizational culture. It is universally garred that various HR practices as well as leadership practices are essential in the promotion of organizational learning as well as in the modification of the existing organizational culture (Gardiner et al 2001 394). One of the human resource practices that Kodak needs to use is recruitment and selection, Kodak ought to apply a recruitment and selection approach that places a lot of emphasis on the capabilities of the individuals in sharing and creating of knowledge, values and cultural fits in the organization. Also instead of Kodak searching for applicants with the required skills for the job, the center on social background and quality references this will ultimately lead to organizational learning and modifications of organizational culture. Kodak also should incorporate training programs and performance appraisal that locate long term objectives in order to evaluate consequences in terms of knowledge generation and transfer this will enhance organizational culture and organizational learning at Kodak. Kodak can also implement job rotation as well as multi-functional teams this will eventually make up knowledge transfer procedure with a strong unspoken section; employees will be required to play a vigorous function in the description of their own training objectives thus leading to organizational learning and a modification of Kodak’s organizational culture. 5.2 Leadership practices Kodak can also apply transformational leadership since it is said to play a significant role in enhancing organizational learning and modification of the organizational culture. Organizational learning as well as change in organizational culture will be attained through the setting of priorities of the organization this will enable the employees to have a shared sense purpose (Tichy and Ulrich, 1984 68). The managers at Kodak will have to create a culture of trust, caring as well as respect among the staff. Through transformational leadership the manager at Kodak will be able to develop organizational structures that will uphold the common decision making and distributes leadership it also offers individualized support to allow the employees to learn and lead, with this the organizational culture at Kodak will slowly change and the organization will be transformed to a learning organization. 6.0 Conclusion It is devastating to mention that the lack of immediate change led to the fall of Kodak a company which is a company that had survived for more than 100 years. If the company would have adopted change at the right time that is when it was really needed, the company would still be in existence like its competitors Fuji film which upon the acceptance of change at the right time the company was able to survive. Fuji film gradually changed and clinched on the digital era thus it thrived. 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