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Eastman Kodak
Case Analysis
Eastman Kodak Company controlled clear dominance in the photo film industry. The emergence of competitors posed threat as they offered products at a lower price to consumers. Kodak watched its United States market share, where it held most of its dominance, decrease from 76% to 70%. With 70%, Kodak is still in control of the market by far as shown in Table A within the case. However, with the addition of competitors like Fuji Photo Co. and Konica Corp. wooing buyers with low prices raises a fair amount of concern for Kodak. Furthermore, "Kodak's stock had lost 8% in value on rumors of a price cut on film" within a week. Recognizing the beginning of depletion, CEO George Fisher along with analysts and investors, sought for a new strategy in Kodak's products. They sought for a new brand that would compete with their competitor's products. Ultimately this brand would be priced lower than Kodak's existing products. In addition, it would be "available only in limited quantities during two off-peak selling seasons." It would be priced 20% below Kodak's premium brand, GoldPlus. This new brand would be called Funtime.
Kodak's main competitor, Fuji Photo Film Co. saw steady growth beginning in the early 1980's. Headquarted in Tokyo, Japan, Fuji made a huge appearance in the United States market by becoming the official film of the 1984 Summer Olympics in Los Angeles. Viewed nationwide, they attracted a lot of potential consumers to their products. Furthermore, worldwide Fuji's sales are already half of Kodak's @ 10 billion. In fact, Fuji's United States "dollar sales grew at over 15% in the past year, compared with Kodak's 3% growth rate." Fuji's strategy included offering its products to consumers at "lower-priced versions" than the products of Kodak. In other words, Fuji was able to maintain a line on price, an area where Kodak struggled and was unable to do so. In addition to Fuji, private labels had grown 10% within the past year. Private labels include films produced by certain manufacturers and sold under store labels, for example Walmart or K-mart. Kodak's inability to sell film on a private label because of a 1921 consent decree kept the from exploring private label basis as an option to reach non-brand loyal and lower priced consumers. Moreover, Kodak was seeing increased competition throughout the 1980's and 1990's as customer enjoyed lower priced versions of film.
Due to the private labels 10% trend within the past year, other store labels may believe this to be a profitable move. For example, many other discount and department stores, camera shops, and supermarkets and convenience stores may private label their film in direct competition with Kodak. Another concern of Kodak may be price, their competitor's ability to provide less expensive and higher quality film. For instance, three of the top six films of overall quality were Economy brands in price tiers in film market. They key reasons to Kodak's market share loss were: competitors, consumer behavior, and pricing.
Case Analysis
Eastman Kodak Company controlled clear dominance in the photo film industry. The emergence of competitors posed threat as they offered products at a lower price to consumers. Kodak watched its United States market share, where it held most of its dominance, decrease from 76% to 70%. With 70%, Kodak is still in control of the market by far as shown in Table A within the case. However, with the addition of competitors like Fuji Photo Co. and Konica Corp. wooing buyers with low prices raises a fair amount of concern for Kodak. Furthermore, "Kodak's stock had lost 8% in value on rumors of a price cut on film" within a week. Recognizing the beginning of depletion, CEO George Fisher along with analysts and investors, sought for a new strategy in Kodak's products. They sought for a new brand that would compete with their competitor's products. Ultimately this brand would be priced lower than Kodak's existing products. In addition, it would be "available only in limited quantities during two off-peak selling seasons." It would be priced 20% below Kodak's premium brand, GoldPlus. This new brand would be called Funtime.
Kodak's main competitor, Fuji Photo Film Co. saw steady growth beginning in the early 1980's. Headquarted in Tokyo, Japan, Fuji made a huge appearance in the United States market by becoming the official film of the 1984 Summer Olympics in Los Angeles. Viewed nationwide, they attracted a lot of potential consumers to their products. Furthermore, worldwide Fuji's sales are already half of Kodak's @ 10 billion. In fact, Fuji's United States "dollar sales grew at over 15% in the past year, compared with Kodak's 3% growth rate." Fuji's strategy included offering its products to consumers at "lower-priced versions" than the products of Kodak. In other words, Fuji was able to maintain a line on price, an area where Kodak struggled and was unable to do so. In addition to Fuji, private labels had grown 10% within the past year. Private labels include films produced by certain manufacturers and sold under store labels, for example Walmart or K-mart. Kodak's inability to sell film on a private label because of a 1921 consent decree kept the from exploring private label basis as an option to reach non-brand loyal and lower priced consumers. Moreover, Kodak was seeing increased competition throughout the 1980's and 1990's as customer enjoyed lower priced versions of film.
Due to the private labels 10% trend within the past year, other store labels may believe this to be a profitable move. For example, many other discount and department stores, camera shops, and supermarkets and convenience stores may private label their film in direct competition with Kodak. Another concern of Kodak may be price, their competitor's ability to provide less expensive and higher quality film. For instance, three of the top six films of overall quality were Economy brands in price tiers in film market. They key reasons to Kodak's market share loss were: competitors, consumer behavior, and pricing.