Kodak case study and strategic analysis

Kodak

There are several key objectives that Kodak should set. The first is that it has to achieve significant financial objectives. There should be revenue and profit targets for the company, as declining revenues and profits have been identified as key issues. The third objective should be with respect to operations. Kodak has suffered in recent years because it has not adjusted quickly to changing technology. The company should set as an objective that it needs to be much faster on its feet. Thus, the company needs to establish itself both operationally and culturally as an innovator. Innovation can be measured in the number of new patents or in the number of new product launches. Human resources objectives should include lowering the average age of the workforce, and bringing in more creative young people to the business. The company recognizes that it needs to revitalize the way it approaches business, but it needs a human resources strategy that will facilitate that. So these are the five key objectives for the company, and it is believed that if the human resources objectives are met that the company will be able to meet the other objectives. It should be noted that achieving these objectives will require significant commitment from leadership to mark a shift in the focus of the company -- without leadership buy-in none of this will work (Kotter, 2010).

2. Kodak has sought to build its competencies through horizontal and vertical integration. The company has long been a vertically-integrated company that built its own solutions, but today this technique is not fast enough -- competitors are innovating at a much faster rate. For consumer applications especially, Kodak's strategy with respect to vertical integration is inadequate. It needs to be more open to outside technology and not so reliant on internal research and development, which is costly and can move slowly (Wharton, 2012). A similar view can be taken of Kodak's horizontal integration. The company right now does not have a lot of viable businesses, and there is the temptation to continue to engage in horizontal integration in order to acquire technologies that can drive the business forward. The issue now is that because Kodak is bankrupt, acquisitions will be smaller and less immediately fruitful. As a long-term strategy option, Kodak might still be able to rely on vertical integration to some extent but it should not expend too much energy on horizontal integration outside of partnerships.

3. The multibusiness model of innovation is based on the idea that business innovation can come from bringing together ideas and people from different areas of specialization. When a company has a number of businesses, there are times when the intersection of those businesses can increase profitability. A good example of this is Google. That company makes most of its money from online advertising, but it is also an industry leader in browsers (Chrome) and mobile operating systems (Android). Google has taken the time to become a leader in those technologies not because those businesses are inherently profitable, but because they work in a multibusiness sense -- both drive more users to Google sites, which increases advertising revenue, and both drive greater acquisition of consumer data, which is a major competitive advantage that Google has.

There are five recommendations for Kodak to increase profitability using a multibusiness model. The first is that the company reaches each market on its strengths. One of the major problems for Kodak in the past has been that it had a premium film business but never accepted that this business would one day be commoditized -- and the same goes for electronic cameras. So simply meeting each market where it is rather than where Kodak wants it to be will help it better balance costs with revenues. The second recommendation is that Kodak should create new technologies that complement each other. They will need to understand how consumers use their products in order to do this effectively. The third recommendation is technology transfer between units. Kodak has a lot of sophisticated imaging technology that it uses in medical and other fields -- finding uses for this in consumer markets is a great example of exploiting multibusiness opportunities. A fourth recommendation is that the company can move people around different business areas, and this will give Kodak employees a better global perspective of the opportunities that exist in the world. A fifth recommendation is that Kodak streamlines some of its back office functions so that different parts of the company do not duplicate effort -- this approach will lower costs and should therefore have a positive impact on profitability.

Implementation

Implementation is a critical issue. The most important recommendation with respect to organizational design is that there needs to be more links between the different parts of the company in order to leverage multibusiness knowledge and capabilities. Communications links and formal links at the leadership level are both important and recommended. Cross-fertilization among business units in the company will increase innovation at a lower cost as well (Cooren, et al., 2011). This type of design change will also help the company to foster a cohesive culture, one that is more modern in nature than has traditionally been the case at Kodak. Further, this recommendation for implementation will all for there to be strategic control systems in an informal way. In that, people who move around the company will have a good sense of whether there are parts of the company where the culture and strategies are not the same - it is easier to build a more cohesive organizational culture when there are people moving around who can recognize differences between units.