Company analysis provides brief information about a company. The information includes the company vision, mission, goals and objective and how the company has used them in attaining its market objectives. Company analysis also gives information on structure of the organization in relation to its mission. At the same time important information about internal operations and external impacts affecting the company are viewed. This paper is going to examine Eastman Kodak Company, one of the major companies in photography industry and how the company is perform and dealing with external factors. In order to get a clear picture marketing analyzing tools such as Porters five force model will be applied. Lastly the paper will make a recommendation and a conclusion based on the findings and reviews.
Eastman Kodak Company is a multinational company that is involved in production of photographic materials and equipments. The company was established in 1881 in Rochester, New York by George Eastman. The company become to be known as Eastman Kodak Company in 1892 and its business slogan become “You press the button, we do the rest.” Currently the company has grown with estimated revenue of $13.274 billions as at 2006 and a net income of over $601 millions in 2006 and a work force of 51,000 as at 2005. The current business slogan is “Share Moments. Share life” For many years Kodak Company has been recognized for its photographic film materials. However, the company in the recent past has taken a focus on three main market products, which are digital photography, printing and health imaging. (Kodak, 2007)
Mission and value statement
The company has core values that define its mission, the core values of the company are outlined below.
Respecting dignity of individuals
Upholding uncompromising integrity
Giving and receiving total trust
Maintaining of continuous credibility
Supporting of continuous improvement and personal replenishment
Recognizing and celebrating achievements (Kodak, 2007)
To grow faster than our main competitors through providing our customers with business solutions they require for capturing, storing and processing images, and communicating them- anywhere anytime. The company will get its competitive advantage through delivering unique cost effective business solutions. (Kodak, 2007)
Company Analysis of the Environment Applying Porters Five Forces Model
Porter generic strategies, this is a strategy on the dimensions of the strategic scope meaning the market penetration and strategic strength referring to the company. For porter a company is impacted by five forces. (Porter, 1985)
In a convectional economic setup, competition among rival companies reduces profits of the companies to nil. However, competition can not be perfect and companies are so sophisticated to counter competition by gaining competitive advantage over their rivals. Competition varies depending on the different industries. (Porter, 1985) In the Photographic industry the competition is high as there are many companies offering the same services. In pursing the competitive advantage in the industry, Kodak have continued to improve products, by providing more cost effective products as in line with their mission and also through providing high technology products.
Threat of substitutes
Substitutes in an industry according to porter are products from other industries. A threat of a substitute will occur when the demand of the product is affected by changing of price of a substitute product. In The case of the Photographic industry, Kodak has build a strong brand name, good customer orientation and creating of patent of some of its products to ensure that they are protected. This has given Kodak distinctive advantage and has been able to keep its market share and as its Photographic products has continued to attractive high demand. (Porter, 1985)
This is the impact that buyers have on a specific industry. Generally if there is a strong buyer power, the relation between the industry and the buyer is termed as “monopsony” such a condition happens when there is one buyer and many suppliers. Photographic industry has a weak buyers, Kodak have taken advantage of this by setting prices of its products which are customer friendly and offering more products on the market to satisfy the demands of various customer segments. (Porter, 1985)
Each industry needs raw material, components and labor and other provisions. This need creates supplier-buyer relationships between the companies which provide the raw material and the industry. In the Photographic industry, suppliers are many and the industry is not impacted by the suppliers. Kodak is a main buyer in the industry and it has used it economic of scale to source for better deals to ensure that it gets the best quality of raw material at the best prices. (Porter, 1985)
Barriers to Entry
Apart from rivals posing threat to existing companies, new entries in the industry also pose a threat the existing companies and increases competition in the industry. In practice any company should be able to enter and leave the market. The Photographic industry has remain open for any player to enter as the there is free and liberal market. However, Kodak has protected its market share through patent and ensuring that it opens more branches so that it can reach more customers in order to keep its market share. (Porter, 1985)
Macro environment includes all external forces that impact a business industry some of the forces are close to the company while others are not. Those external forces close to the company includes company’s suppliers, agents and distributors. These “closer” external factors are generally termed as proximate macro environment. Wider macro environment are other macro factors which may not have a direct impact on the operation of the company, this are political and legal factors, economic aspects, social and cultural issues and technological factors. These factors are termed as PEST. (Barney, 1997)
How Kodak Deals With the Macro Environment
The company has a strategic approach of dealing with the proximate macro environment, the company being one of the major plays in the industry sources for competitive suppliers who supply the company with the required raw material at competitive prices. The company also manufactures by its own most of its products and thus sources only for what it does not have. On the agency and distribution, the company has acquired other small companies and made them their distribution channel, for example the company acquired Creo Inc in 2005`it also have entered into partnership with other multinational such as Motorola, Inc the partnership agreement also covers marketing. (Business week 2007)
Threats and Opportunities in the Environment
To many companies threats and opportunities arises from the wider macro environment factors, these vastly impacts an organization. (Barney, 1997)
Since Kodak is a multinational company, political policies, and activities in countries which the company has established its branches will also pose as threats. These policies includes, taxes, licenses, tariffs and other policies which can be a barrier for the company to do business in those specific countries or may reduce the profits of the company. Economic factors have a direct impact on financial aspects e.g. inflation and purchasing power of customers this factor also poses as a threat as bad economical factor will negatively impact the company. (Barney, 1997)
The biggest opportunity for the company lies in technological factors, with ever increasing demand from customer for better technological products, the company has an opportunity of exploiting this aspect by inventing more efficient and high technological products to meet the customers’ needs. Technology is dynamic and the need for more advanced technological superior products will continue to be there. (Business week, 2007)
Even though Kodak Company is accredited with success in its business undertakings there are various challenges that the company to face in terms of competitor and environmental factors both internal and external. However, it is clear that the company will be able to succeed in its challenges as it has enough resources in terms of revenue and manpower, it as technological advancement and good management policies. Never the less, the company should utilize opportunity of its strong financial base exploring more markets. The amount of revenue that the company collects presents an opportunity of development of unique photographic products that will give it a competitive edge.
Company analysis in important in improving and ensuring the success of a company, in company analysis there are several tools that are used to analyze the performance of a company. Porter’s five model analysis is one of the tools that are used in company analysis. Kodak Company has continued to succeed because of its strong financial base, good and high quality products and its expansive distribution channels. Offering good service and good customer orientation are some of the strong points of the company.
Barney, J. B. (1997): Gaining and Sustaining Competitive Advantage. Reading, MA: Addison- Wesley.
Business week (2007); Kodak Launches a Printer Offensive; retrieved from; www.businessweek.com/techonolgy; Accessed on 4/11/07 (Feb, 2007 issue)
Business Week (2005): A digital warrior for Kodak; New York: (May 23, Issue 3934)
Kodak (2007): About Kodak company; retrieved from; www.kodak.com ; Accessed on 4/11/07
Porter, M.E. (1985): Competitive Advantage: The Free Press, New York, 1985.