When margins are high competitors tend to enter the market. The industry that P&G operates in is fairly easy to enter. There are many substitutes for Tide as there are many substitutes for Coke. P&G must be very careful to maintain the prestige and quality of the brand so that competitors can not erode its influence on consumers. Compare the strengths and weaknesses of P&G's resources and capabilities to that of Eastman Kodak (Case 7). These companies are in very different industries. How does this affect strategic analysis of resources and capabilities?

The first major strength of P&G relative to Kodak is its margins and cost structure. P&G has the benefit of increasing earnings without having a corresponding increase in capital expenditures. Eastman Kodak however, as the case indicates, was operating in an industry with shrinking margins. Likewise, for the company to increase earnings, it had to spend more on capital expenditures. These expenditures however didn't bear fruit as the prices of Kodak's prices began to decline as the cost of providing those products increased. In addition, the case indicates that Kodak experienced intense competition from many segments of the market. Many companies including GE, Sony, Fuji Films and others were all eroding Kodak's market share in the digital imaging market space. This intense competition combined with shrinking margins led to a path of insolvency and eventually bankruptcy for Kodak. P&G however, did not have as much competition as that of Kodak. For one, as mentioned earlier, P&G had...

Competitors simply could not mimic P&G distribution network, its brand image, its economies of scale, or its fortress balance sheet. Kodak however, had none of these resources to the extent that P&G had. In fact, it lost its competitive advantage once the company made its foray into the digital imaging arena which was dominated by competitors with more product know-how and market share. These incumbents had already established their foothold within the industry and would not relinquish it to Kodak. As such, the company faltered in its attempt to venture into the industry (Stempel, 2011). Strategic analysis as evident by these two companies varies from industry to industry. Important metrics in one industry may be only marginal in others. Likewise, advantages that companies obtain in one industry may not transfer to the next. This was evident by Kodak once it attempted to venture in the digital imaging software market. The company did not have extensive knowledge in regards to software and thus loss hundreds of millions of dollars.
References

1) "P&G 2010 Annual Report." P&G 2010 AR Letter: Brand Building, Competitive Advantage. Web. 26 Feb. 2012. .

2) "Procter & Gamble Co. (PG) | Statement of Financial Position, Assets." Stock Analysis on Net. Web. 26 Feb. 2012. .

3) Stempel, Jonathan, and Liana B. Baker. "Photography Pioneer Kodak Files for Bankruptcy." Reuters. Thomson Reuters, 19 Jan. 2012. Web. 26 Feb. 2012. .