Kodak’s strategy of growth Essay

1. What was Kodak’s strategy of growth in the early years of its history? What corporate-level strengths did it accumulate during this time?
In its early times Kodak developed a unique technology of silver halide photography, and strongly focused on research and development perspectives. Kodak’s photography was utilized in several areas and although the company was developing one core technology, its popularity created certain diversification. Other strengths of Kodak gained since the creation of the company were competitive advantage in technologies, good financial position and strong branding.
2. What was Kodak’s core and distinctive competency in its early years? Was Kodak successful in creating new distinctive competencies when their core competency became obsolete? Why or why not?
Distinctive competency of Kodak since its early years was the technology of silver halide photography. The company over-relied on developing this technology, and when digital photography and electronic devices started replacing printed photography, Kodak did not manage to create new competencies. There was an attempt to enter such areas as health industry (photography and later biotechnology), chemicals and information technologies. The very idea of entering neighboring industries and developing new competencies was successful, as well as the strategy of acquisitions based on strong financial position of Kodak. However, the realization of this idea resulted in non-justified multiple mergers and acquisitions; many of these were overpriced, and required extensive advertising. Kodak attempted to enter several areas where the company was not competent simultaneously. These areas also had tight competition, and even Kodak’s rich financing did not improve the situation. Kodak has lost valuable time and used its strongest resource (funds) without managing to develop a new area of competency.
3. What are some of the options available for Kodak? Is Perez on the right track?
Perez has adopted a reasonable strategy of changing the rigid management style of the company and reducing the workforce. The decision to sell branches of business not directly related to Kodak’s main competencies (photography and digital solutions) was also successful, since it allowed to improve financial situation of the company. Focus on digital kiosks and digital processing is also an effective solution since these products are associated with Kodak’s main branding areas. However, the decision to cell medical imaging part is doubtful, since it is one of the areas where Kodak could use its high R&D potential. In addition to this, focus of Perez on printing might be partly determined by its former HP background. Current tendencies in digital world such as the popularity of tablet PCs, the invention of flexible screens and growth of mobile devices market shows a tendency to replace printed media with electronic analogues. From this perspective, Kodak should also focus on partnering with manufacturers of electronic devices and integrating their products and services with these devices.