A New Strategy for Kodak - Assignment Example

A New Strategy for Kodak Introduction This study is based on the analysis of the key objectivesand corporate strategies of Eastman Kodak Company. It illustrates the benefits of these strategies in order to increase the profitability of the organization. Eastman Kodak Company was incorporated in 1988 by Mr. George Eastman. Headquarter of the organization is situated in New York. They are specialized in manufacturing and marketing different equipment and services supporting photographic technologies. In 2009, the organization recorded a massive loss of $137 million, precisely due to rapid transformation of technologies and a drastic decrease in the demand of their products (Marketline, 2015). This study discusses different ways of perusing a diversified multi-business model, as well as the effect of ethics, corporate social responsibility (CSR), and organizational sustainability on the corporate strategy. Key Objectives for Eastman Kodak Over the last few years, the Eastman Kodak Company has been suffering low profitability due to the fierce competition in the global market (Gavetti, Henderson & Giorgi, 2005). To regain the competitive position in the market, the organization needs to establish some new strategies to develop new services and products to support the Cloud service industry. The analysis of the current structure of the organization has assisted to derive five major objectives which need to be followed for the successful reformation of business operations. Operational Objectives Restructuring of the recent business model. Amalgamation of different software supporting programs into one Cloud service. Financial Objectives Lowering the cost of the organization by selling different non-profit making hardware business. Attracting investment from the economical developing countries. Human Resources Objectives To be focused on the hiring process of young candidates with good technological knowledge. To restructure their business, Kodak should start a partnership with any reputed organization which is specialized in the area of printers and digital cameras. Sharing the responsibilities of these business operations will influence the organization to invest their resources in developing new cloud services. It will also assist them to achieve their cost-cutting objective, which will be beneficial in gathering the investments for new Cloud services. Storage-purposed Cloud services are common in the current market (Capgemini, 2012). Integrating different software programs of the organization, such as their digital photofinishing and photo processing with Cloud services, will enable them to create a niche market. Their innovative Cloud service can bring revolution to the market of developing countries. The increased demand of the products of The Eastman Kodak Company in developing countries like China will allow the organization to attract investment for their Cloud service project (Currie & Alon, 2011). The recruitment of new talents will assist the organization in boosting their research and development facility of the digital services, such as photofinishing as well as digital processing. Horizontal and Vertical Integration Strategy and Corporate Level Strategy Horizontal integration can be defined as the integration of the current infrastructure and assets of two similarly structured organizations. This acquisition results in the expansion of the current operations of any organization. A horizontal integration strategy will enable the organizational managers to lower the operating cost (Garvey, 1995). The partnership strategy of Kodak with another reputable organization in the digital market will assist in the reduction of operating costs. It will also influence the successful execution of the digital camera and printer operations during their new Cloud service venture. Vertical integration can be described as a process of business expansion. This kind of expansion allows organizations to welcome new operations, which will minimize their dependency on other businesses (Harrigan, 1985). Kodak’s managers can adopt a vertical integration strategy for its new business venture as it is very new in the Cloud services industry. The most appropriate corporate strategy for the organization would be their collaboration with medium-sized IT companies that are specialized in the Cloud services. This integration will help them to understand the different requirements of Cloud services. Therefore, it will allow them to indulge in the research and development of new Cloud products. Different Ways of Pursuing a Multi Business Model based on Diversification The organization needs to follow five different to peruse the multi-business model. Those five steps have been described below. Sharing the resources with different business units of other industry to understand the economies of scope. Increase in the competencies of the company to strengthen its position in new business industries. Offering sales discount on the less profit making products and bundling them with the higher selling items. Distributing resources and competencies as per the requirement of different business units within the organization. Transferring the competencies of the organization in different business units of other industries (Zott, Amit & Massa, 2010). Transfer of the Competencies The core competencies of Kodak Company are their digital processing and photofinishing operations (UK Essays, 2015). The organization can share these competencies with another IT company to develop new Cloud service. The amalgamation of Kodak’s core competencies and the newly-designed Cloud service will help Kodak managers to attain a sustainable competitive advantage. In addition to that, Kodak will also be able to gain synergistic benefits from a company that operates in a different sector. In that way, the managers of Kodak can diversify their business operations. It will also assist them to manage their revenue stream. Resource Sharing The existing resources of Kodak are their distribution channel, technology, finances, manpower (UK Essays, 2015). Any well-established IT organization can assist them with resources such as industrial contacts, engineers, equipment (Fai & Tunzelmann, 2014). They can utilize these resources in collaboration with the competencies of any other IT company to develop a new technologically advanced product. This will enable them to increase their competitiveness in the global market. By doing so, the company will enhance its chances of becoming the leader in the market. In addition, the organization will also be able to enhance its brand image in front of its customer base in this intensely competitive business environment. Recommendation of Implementation Strategy Creating a multidivisional organizational structure has been recommended to the organization. This kind of structure will allow the organization to expand their business while simultaneously providing the managers with the opportunity to control and reduce obstacles with the help of a self-contained division and separate corporate headquarter staffs (Hoskisson, 1987). This strategy will be best suited to the organization, as they are not at all experienced in the Cloud service industry. This strategy will enable the organization to concentrate on their current business operations while developing new ventures. This strategy will help the organization to reduce different problems and conflicts within the control systems, as it separates the operations of those organizations. The application of this strategy will also affect the hierarchical structure of the organization. Various new positions need to be created to successfully execute the traditional operations of both the organizations. The strategy will influence the organization to change the corporate structure by adding new managers to handle their new venture. The primary job of the separate corporate headquarter staff is to properly monitor all these divisions and to control the finances. To successfully execute this strategy, the management needs to establish a new control system that will allow them to reduce the overall cost. The presence of different divisions will also be beneficial in maintaining the work culture of both of the organizations. Effect of Ethics, Corporate Social Responsibility (CSR), and Environmental Sustainability  This study has already discussed that the management of the organization needs to adopt vertical integration strategy, which will allow them to expand their business by collaborating with other Cloud service providers. After this integration, they need to create a multidivisional corporate structure to properly execute individual operation of these organizations. These recommendations will enable the organization to evaluate their current work culture and corporate structure. The restructuring procedure can be followed by new sets of ethical guidelines, which will enable the organization to manage all the different departments. These strategies also influence greater communication among the employees of the organizations, which will further reduce the ambiguities about the operations. Impact of Business Ethics Different guidelines of ethical codes and conducts will help the employees of the organization to follow the laws and rules to eliminate negative practices. Establishment of different guidelines and ethical codes will further help them to increase their productivity and profitability. Business ethics need to be a part of the performance evaluation of the employees of the organization. Yearly evaluation of financial report, proper guidelines for behavioral codes and conducts is essential to maintain the ethical practices within the organization. Proper training programs need to be designed to eliminate racial and gender discrimination within the workplace. Impact of CSR The organization needs to follow different social responsibilities, which will support their main cause for the implementation of these strategies. The organization need to focus on the Green IT practices to support environmentally sustained Cloud computing services. The details of the CSR ventures, CSR strategies need to be published in the company-owned website and interim report. They must focus on using the environment friendly packaging material for their products. The information related to the company’s CSR endeavors will educate the consumers and investors about the positive social impacts of their new venture. Impact of Environmental Sustainability Analyzing the environmental sustainability is extremely important for the new venture. This analysis will allow the management to engage the eco-friendly customers towards their product line. It is imperative for the company to establish two different departments and assign them with responsibility to handle environmental issues faced by the organization. Their goal and actions will also be different due to their separate work pattern. Conclusion This analysis of the corporate structure and organizational objectives of the Kodak Company has allowed this study to establish a new corporate strategy. This strategy will assist the organization to improve their market position and profitability. The organization is advised to start a partnership with a new technology company to increase its horizon into the Cloud service industry. Multidivisional corporate structure has also been recommended to successfully execute the individual operations of these partner organizations. References Capgemini. (2012). Trends in cloud computing. Retrieved from http://www.in.capgemini.com/resource-file-access/resource/pdf/Trends_in_Cloud_Computing_Secure_Journey_to_the_Cloud_____a_Matter_of_Control.pdf Currie, D. & Alon, I. (2011). Estimating Demand in Emerging Markets for Kodak Express. Massachusetts: Harvard Business. Fai, F. & Tunzelmann, N. V. (2014). Industry-specific competencies and converging technological systems: Evidence from patents. Retrieved from http://www.bath.ac.uk/management/research/pdf/2000-08.pdf Garvey, G.T. (1995). Why reputation favors joint ventures over vertical and horizontal integration: A simple model. Journal of Economic Behavior & Organization, 28(3), 387-397. Gavetti, G., Henderson, R. & Giorgi, S. (2005). Kodak and the Digital Revolution. Retrieved from http://isites.harvard.edu/fs/docs/icb.topic667366.files/Kodak%20and%20the%20Digital%20Revolution%20A.pdf Harrigan, K.R. (1985). Vertical integration and corporate strategy. Academy of Management Journal, 28(2), 397-425. Hoskisson, R. E. (1987). Multidivisional structure and performance: The contingency of diversification strategy. Academy of Management Journal, 30(4), 625-644. Marketline. (2015). Eastman Kodak Company: Company overview. Retrieved from file:///C:/Users/USER/Downloads/Eastman%20Kodak%20Company.pdf. UK Essays. (2015). The resources and capabilities of Kodak commerce essay. Retrieved from http://www.ukessays.com/essays/commerce/the-resources-and-capabilities-of-kodak-commerce-essay.php Zott, C., Amit, R. & Massa, L. (2010). The business model: theoretical roots, recent development, and future research. Retrieved from http://www.iese.edu/research/pdfs/DI-0862-E.pdf Read More