Kodak

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Kodak is engaged in all aspects of the imaging industry, which includes the production of traditional cameras and film as well as the development and production of new digital imaging technologies for both professional, medical and personal use. The firm's core business lies in the sale of traditional cameras and film products, which produced an estimated $8.5 billion in global sales in 2001. Although the firm has a position of global leadership in this market, the gradual consumer trend toward electronic imaging has resulted in a lack of growth in film sales.

Imaging Technology Strategies

As a result, the firm has begun exploring alternative strategies in other imaging technologies in order to meet future consumer needs and maintain its share of the imaging market. The size of the market and the market share of Kodak' competitors largely depends on the specific product line and the geographic area. In the traditional film market, which continues to represent the largest share of the imaging segment, consumer purchases of film estimated at approximately $50 billion annually on a global basis.

In the United States and Europe, Fuji, Kodak's primary competitor, commands approximately 20% of the market share, and focuses on a price strategy and distribution through mass-market retail outlets. In emerging nations such as China and Southeast Asia, however, Fuji's market share rises dramatically to the 70% range, which is largely attributable to the firm's price strategy. In addition, Fuji has achieved almost total dominance of the very lucrative Japanese film market due to protectionist legislation in Japan that inhibited the import of foreign film products prior to 1999.

• Eastman Kodak began in 1888 as Eastman Dry Plate Company.
• Founded by George Eastman, the Eastman Dry Plate Company was incorporated in 1901 to become Eastman Kodak.
• During the company's development Eastman had developed a plethora of new technologies that enabled Eastman Kodak to quickly enter into the photography industry.
• Eastman created a portable photographic plate, which he was subsequently capable of uniformly mass producing.
• In 1884, Eastman developed a sliver halide paper based roll film.
• Combining the photgraphic plate and film, Eastman was able to create the first portable camera for commercial sale in 1888.

Using patented technology, Eastman was able to take control of the entire photographic process from camera and film making to film development.

What is perhaps most important about the Eastman Kodak is that it represent a company formally built on the development of technology. Because Eastman was able to effectively understand all aspects of the film and camera making process, the Eastman Kodak organization was able to garner a sizable share of the market and retain this share for a long period of time. Although the Eastman organization was focused on the development of technology, it utilized four basic principles to guide development: the development of mass production to lower costs; maintaining a competitive edge through technology development; building the Kodak brand through advertising; and multinational operations to exploit foreign markets. While these goals are not considered revolutionary in the modern business environment, at the time of their introduction-i.e. the late nineteenth century-they were considered to be quite novel.

As a direct result of the organization's technological development and business practices, the Eastman Kodak organization was able to retain a strong position in the American economy. Specifically, the organization retained an 18 percent return on investment for stockholders during the mid-twentieth century. The central focus for the organization to retain its competitive advantage was its investment in research and development. Foreign market development was also critical. By the 1990s, Kodak reaped more than 40 percent of its revenues from foreign markets.

Despite the notable success of Kodak in both domestic and foreign markets, by the 1970s, Kodak was beginning to experience a drop in overall revenues and profits. During this time period the photographic industry began to change, focusing more on digital imaging than halide film. As a direct consequence of this change Kodak was now forced to compete with other photographic companies that had advanced photographic technologies. Today, Kodak is still struggling to compete in a technologically changed industry.