The Key Differences Between De Beers Old And New Business Model - Essay Example

 The Key Differences Between De Beers Old And New Business Model 1.What was Kodak’s digital imaging strategy between 1992 and 2012? Between the years, 1992 to 2012 Kodak had a strategy of providing a totally integrated services in photography to supply camera and film. This was to be done by undertaking both processing and printing. One can argue that as a company Kodak monopolized most of the world photographic industry for over 75 years. However, this did not last forever, during the period Fisher George was the CEO of Kodak various strategies failed. He was the main architect of company’s pursuit for digital imaging. But it is worth stating that the digital cameras themselves never offered similar sharpness of resolution as historical photography during the start of the same period. Kodak’s main strategy in this period was to avail to their customer’s high-margin film referred to as the razor blade strategy. This strategy involved Kodak’s development of inexpensive cameras as a way to an end: the company had the objective of facilitating lucrative film sales. In a heart shell, the invention of the digital camera was held back due to management’s worries about the negative effects on film sales. Nonetheless, the developmental dependencies on many other industries were extremely high as microprocessors, advances in electronic storage, and various communication soft wares for the camera and digital data transfer, soft wares for image processing, etc. Microelectronics was a problem for the company during the implementation of its strategy. 2. Why did this strategy fail? However, the strategies that the company employed failed. Normally in a perfect market whenever disruptive technology exists, companies always fail to capitalize on the invention of the day for fearing cannibalizing current product sales. For instance, in 1981 when Sony introduced a filmless digital camera into the market, panic permeated Kodak company‘s executive suite. Explicitly, over the next years, the company invested about $5 billion in digital imaging. Through estimation, this was approximately 45% of the company’s R&D budget. Sadly, with disruptive technologies like digital cameras, whenever a company becomes the first-mover it has a lot of advantages and others who follow suit find it very difficult to overcome the competition. The strategy failed since by the time the company realized that their razor-blade strategy was not workable; the lions were by now out of the barn. Kodak was not able to match the competition. 3. What Kodak could have done in the past? One mistake that Kodak never realized was the potential of PhotoNet in reaching millions of customers around the world. PhotoNet has the capability of storing image then share online with friends. it is one the predecessors (ClubPhoto, PhotoPoint, Fuji.net, Cartogra(HP)) of Facebook. Due to poor management and rush in implementing strategies that are not well thought, Kodak ended up falling into a big trap of failure. Kodak ought to have assessed PhotoNet and many related initiatives to single out their potential value. This should have led to the company capitalizing in more profitable strategies that should have ensured an increase in market share. The other obvious path that the company should have followed is a separation of various subsidiaries. Kodak should have initiated a separate subsidiary that required a unique mindset and skill set the (field of electronics was merging at that time). In the mid-1980s, Intel nearly bit the dust but later emerged as a hero in the business. Just like it was the case for Kodak, Intel faced devastating Japanese competition. But as a company they never hesitated. Intel shed their memory-chip business while betting the ranch on various microprocessors. Through analysis, such a bet though big was ruthless. Memory-chip manufacturing sections were closed, and workers sent packing. Such an action is, simpler to do in Silicon Valley; a place the laid-off may more readily locate new jobs, than in Rochester considered a small city like. All the strategies done should have ensured the company stays in line with the purpose of introducing the imaging technology itself but, unfortunately, this never came to pass. 4. What Kodak should do now? Nonetheless, there are a lot that the company can still do consider the fact that the industry still has a lot of opportunities. Kodak has a planning of concentrating on printers after filing for bankruptcy for business to business. Through critical analysis, the company’s printer business seems profitable and with a lot of potentials in being successful in competing against Canon and HP. According to market research done by Gartner, currently Kodak holds only approximately a 2% market share of the printer. The concern remaining is how big this market share can grow? What type of business strategy Kodak is going to have? Nonetheless, while the analysis of the future growth and potentiality of product sale, one can advise Kodak to focus still on digital cameras. This is where there exist the need for high performance and high-quality cameras where the mobile phones could not substitute digital cameras. Furthermore, currently healthcare is having a lot of expense lot on imaging and scanning. If Kodak might come up with imaging devices for Healthcare that are cost effective, it has chances of bouncing back just like Intel did. For instance, companies like Fuji Film have been able to survive the decline of the traditional photographic film by continuously diversifying into various materials employed in flat-panel displays and medical equipment. The Most interesting trend that Kodak can borrow is the fact that Fuji Film is purchasing SonoSite Inc., a medical-equipment maker in United States. The De Beers diamond case 1. Are diamonds a differentiated product? The De Beers diamond firm was started by Cecil Rhodes in 1888, when he successfully merged two of the biggest diamond mines in the region. De Beers is a well -known family of companies that dominates the diamond, its diamond mining, its diamond trading and the sector of manufacturing industrial diamond manufacturing sectors. De Beers is active in every category of industrial diamond mining. Differentiation has been a concern and a subject of argument since the company operates as a monopoly. This arises from the fact that the ownership of the key resource is in the hands of de beers, the South African diamond company. Despite having substitutes for diamonds such as emeralds, rubies, cubic zirconias and sapphires various customers are made to believe that there are no other gems that portray the same beauty exhibited by diamond. Probably this belief was rooted or created out of heavy investment in marketing through advertising campaign by De Beers. if people view as good substitutes for diamonds, then de beers has relatively little market power.in this case, any attempt by de beers to raise the price of diamonds would cause individuals to switch to other gemstones. But if individuals view this other stones as very different from their diamonds, then de beers can exert substantial influence over the price of its product. 2. What marketing /Sales/PR efforts have diamond companies such as De Beers made to shape consumer perceptions? How successful have they been? One of the marketing strategies that De Beers to manipulate consumers’ perception has been to invest heavily in the advertisement. Persuasion marketing by De Beers applies what customers know about human psychology to create techniques to market diamond products. In many cases, it categorically applies to the promotions features of the marketing mix and developed on a customer's impulsive purchasing behavior to lead them to enhance sales within the company. One can agree that according to the second case analysis this has been successfully done so as to manipulate consumer demand. In doing so, one of the smartest and effective marketing strategies have been the marketing of their diamonds as a symbol of commitment and love. The company pays for a huge sum of advertising, and one may wonder why this the case if it controls such a huge market share. Furthermore, if a monopoly is the main seller of its diamond product, then why does it require such heavy advertisement advertise? The main purpose has been for de beers heavy advertisement has been to differentiate diamonds from many other gems to persuade consumers. Such marketing strategies have led to slogans like "A DIAMOND IS FOREVER" making consumers think that the same is never true for other gems such as emeralds, rubies, cubic zirconias, and sapphires. The notion has been that if the adverts are successful, consumer in a population to view the company’s diamonds as unique, as opposed to one among many gemstones, and this perception has given de beers greater market monopoly. Other successful marketing campaigns have involved the 'eternity ring' considered to be as a symbol of persistent affection or appreciation. All these have been filled with full consumer appeal to enhance sales through the effort to convince customers that diamond lacks substitute. In a heart shell, the advert has 'trilogy ring' which represents the relationship of the past, present and future. The 'right-hand ring' was bought and worn by various women as a representation of independence. The company is also known for its TV advertisements featuring a group of silhouettes wearing diamonds, to the tune of Palladio by Karl Jenkins. The campaign, famously known as 'Shadows and Lights', initially ran in 1993. The tune of the advertisement would later inspire a compilation a famous album all these were in a long way in enhancing customer persuasion to boost sells. De Beers monopolized for years because it could directly control the general business environment’s elements and segments. Accordingly, this has changed due to various consumer perceptions. Likewise, successful firms have in recent days gathered the information needed to understand every segment and its effects for the selection and eventual implementation of the best strategies. By the late of the 1990s, the business for De Beers’ model of supply control and inventory managing to market at all times was no longer workable and they had to shift driving demand. The new model favored the company by increasing demand and control demand. References Bolman, L.G & Deal, T.E. 2008, Reframing organizations: artistry, choice and leadership, 4th Edition, Last viewed 15 October 2011. Camillus, J. 2000, ‘Shifting the Strategic Management Paradigm’ in Strategic Planning: Readings, Juta and Company Ltd, p.15. Castelluccio, M. 2007, Tech Forum: Kodak’s Comeback, Strategic Finance, Institute of Management Accountants. Davis, M., Baldwin, J. 2006, More Than a Name: An Introduction to Branding, AVA Publishing. Deutsch, C.H. 2004, Technology: Advice to Help Kodak compete in the new World of Digital Photography, The New York Times, April 19 2004, viewed 14 April 2015, McGuigan, J.R., Moyer, R.C., deB Harris, F.H. 2010, Part 4: Pricing and Output decisions: Strategy and Tactics in ‘Managerial Economics’, Cengage Learning. Read More