What Went Wrong for eastman Kodak Essay Example | Topics and Well Written Essays - 1250 words

What Went Wrong for eastman Kodak - Essay ExampleThirdly, Kodak was unable to make the raw digital technology to fit coherently with its other capabilities as a core competency. In the subsequent paragraphs in this discussion, Kodaks approach in these 3 strategies is comp ard with IBMs in order to highlight the ultimate failure of the former and the success of the latter. Kodak rise to dominance in the imaging industry was characterised by it drill of a razor-edged strategy. This strategy was implemented by selling cameras at a very low cost, and earning profits from the sale of expensive asks. The high margins on film fuelled the companys profitability and growth to the extent that the company became too dependent on its film business. The problem with this is that the company concentrated on getting core competencies on film technologies while it continued to pay less attention to equipment. In spite of pioneering in the field of digital cameras, the company toss out the idea of pursuing future competitive vantages in that field because of the fear that this would cannibalise its film business (Nate, 2012). According to the resource-based view of strategy, firms that have superior systems and structures are profitable not because they engage in strategic investments that may deter entry and raise prices above long-run costs, but because they have markedly take down costs, or offer markedly higher quality or product performance. However, this strategy is often not enough to sustain significant competitive advantage for long. According to Teece, Pisano and Shuen (1997), winners in the global marketplace have been firms that can demonstrate timely responsiveness and rapid and flexible product innovation, coupled with the management capacity to effectively coordinate and redeploy internal and external competences. Kodaks failure arose from its managements comfort with its present huge resources and core competencies which prevented them from developing pr ojectile capabilities. In 2011 IBM marked its 100 year milestone. As two centenarians, it would be appropriate to compare IBMs continued success against Kodaks demise. IBM, like Kodak, has set about the full force of disruptive change on its core business as faster, cheaper and nimbler competitors rapidly ate away its market leadership. In the early 80s IBM introduced the IBM PC that created the first truly mass market for the personal computer (Koehn, 2011). However, within a decade IBM had fallen behind in this market that it had created so oftentimes that in the 1992 financial year the company recorded a US$8.10 billion loss (Denning, 2011). Knowing customers intimately In the early 90s when IBM was performing its thrash the financial analysts believed the companys best bet for survival was to break it up and sell it. However, the newly appointed CEO Lou Gerstner overcame that pressure and instead centre on interacting with customers and industry experts in order to understan d IBMs value-proposition from the customer/market perspective. This exercise enabled the new CEO to identify IBMs greatest effectivity to be its ability to provide customer with integrated solutions. As such the organization dropped the earlier desire to split the company. Splitting IBM would have destroyed its preposterous competitive advantage. Armed with this knowledge Lou Gestner changed IBM strategy to be an enterprise that could understand and provide its customers wide-ranging IT needs. Today, IBMs Global Services provides the largest share of the companys revenue (Koehn, 2011). On the other hand, Kodak acted as if it were not affected when Sony introduced the Mavica digital camera.