Eastman Kodak Company The Fall from Grace Paper

Eastman Kodak Company The Fall from Grace Paper

 
Critical Thinking: The Nature of Change



In this module, we learned that everything is in a state of constant change. This is a challenge of strategic management, as the industry environment is driven by technology, consumer needs, politics, economic conditions, and many other influences. Consider these influences as you analyze the following cases.



Eastman Kodak’s (Kodak) Quest for a Digital Future (R. M. Grant, Contemporary Strategy Analysis: Text and Cases, 10th ed., Wiley, 2019)



To support the case analysis read Chapter 8 and the assigned reading. In addition, view the following video:



Company Man. (2018, June 13). The decline of Kodak…What happened? [Video file]. Retrieved from 



Remember that a case study is a puzzle to be solved, so before reading and answering the specific case questions, develop your proposed solution by following these five steps:



Read the case study to identify the key issues and underlying issues. These issues are the principles and concepts of the course area which apply to the situation described in the case study.
Record the facts from the case study which are relevant to the principles and concepts of the course area issues. The case may have extraneous information not relevant to the current course area. Your ability to differentiate between relevant and irrelevant information is an important aspect of case analysis, as it will inform the focus of your answers.
Describe in some detail the actions that would address or correct the situation.
Consider how you would support your solution with examples from experience or current real-life examples or cases from textbooks.
Complete this initial analysis and then read the discussion questions. Typically, you will already have the answers to the questions but with a broader consideration. At this point, you can add the details and/or analytical tools required to solve the case.



Case Study Questions:



What were the challenges of technological change for Kodak given “disruptive” digital technologies?
What were Kodak’s competencies? Was the idea to ‘brand’ the company an imaging company versus a chemical company a mistake?
Evaluate Kodak’s approaches to managing strategic change including organizational ambidexterity, scenarios, crisis management, capability development, dynamic capabilities, and knowledge management.
Was Kodak’s failure inevitable? What could Kodak have done differently?



Explanation & Answer length: 4 pages3 attachmentsSlide 1 of 3



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UNFORMATTED ATTACHMENT PREVIEW



CONTEMPORARY STRATEGY ANALYSIS tenth edition Robert M. Grant John Wiley & Sons Ltd., 2019 Chapter 8 Industry Evolution and Strategic Change 1 Industry Evolution and Strategic Change OUTLINE • The industry life cycle • The challenge of organizational adaptation and strategic change • Managing strategic change Copyright © 2019 John Wiley & Sons, Inc. THE INDUSTRY LIFE CYCLE Industry Sales Stages of the Industry Life Cycle MATURITY DECLINE GROWTH INTRODUCTION Time Drivers of industry evolution : • demand growth • creation and diffusion of knowledge Copyright © 2019 John Wiley & Sons, Inc. THE INDUSTRY LIFE CYCLE Rate of Innovation Product and Process Innovation Over Time Process Innovation Product Innovation Time © 2016 Robert M. Grant, www.contemporarystrategyanalysis.com THE INDUSTRY LIFE CYCLE How Typical is the Life Cycle Pattern? • Technology-intensive industries (e.g. pharmaceuticals, semiconductors, computers) may retain features of emerging industries. • Other industries (especially those providing basic necessities, e.g. food processing, construction, apparel) reach maturity, but not decline. • Industries may experience life cycle regeneration, e.g. motorcycles, TVs: Sales Sales Color Flat screen Portable HDTV B&W MOTORCYCLES 1900 • 1950 1980 2017 TELEVISIONS 1930 1950 1970 1990 2010 Life cycle model can help us to anticipate industry evolution—but dangerous to assume any common, pre-determined pattern of industry development Copyright © 2019 John Wiley & Sons, Inc. THE INDUSTRY LIFE CYCLE Innovation and Renewal over the Life Cycle: Retailing Department Stores e.g. Le Bon Marché, Macy & Co., Harrods 1840 Mail Order, Catalogue Retailers e.g. Sears Roebuck, Montgomery Ward 1880 1900 Copyright © 2019 John Wiley & Sons, Inc. Chain Stores e.g. A&P, Woolworth’s, W.H. Smith Warehouse Clubs Internet Retailers e.g. Price Club Sam’s Club e.g. Amazon, JD.com Discount Stores “Category Killers” e.g. K-Mart Wal-Mart 1920 1940 e.g. Toys”R” Us, Home Depot 1960 1980 Pop-Up Stores 2000 2018 THE INDUSTRY LIFE CYCLE Evolution of Industry Structure over the Life Cycle INTRODUCTION GROWTH MATURITY DECLINE DEMAND Early adopters Rapid increase in market penetration Replacement/ repeat buying; price sensitive customers Obsolescence TECHNOLOGY Competing technologies; rapid product innovation Standardization; rapid process innovation Diffused know how; incremental innovation Little innovation PRODUCTS Wide variety of features and designs Design & quality improve; dominant design emerges Commoditization; brand differentiation Differentiation difficult Capacity shortage, mass-production Over-capacity emerges; deskilling Overcapacity MANUFACTURING Short-runs, skill intensive TRADE ------Production shifts from advanced to emerging countries------ COMPETITION Few companies Entry, mergers exit Shakeout & consolidation Price wars & exit KSFs Product innovation Design for manufacture; Process innovation Cost efficiency (scale economies, low cost inputs) Low overheads; rationalization Copyright © 2019 John Wiley & Sons, Inc. THE INDUSTRY LIFE CYCLE The Driving Forces of Industry Evolution BASIC CONDITIONS INDUSTRY STRUCTURE Customers become more knowledgeable & experienced Customers become more price conscious Products become more standardized Diffusion of technology COMPETITION Production becomes less R&D & skill-intensive Demand growth slows as market saturation approaches Copyright © 2019 John Wiley & Sons, Inc. Production shifts to low-wage countries Excess capacity increases Distribution channels consolidate Quest for new sources of differentiation Price competition intensifies Bargaining power of distributors increases 8 THE INDUSTRY LIFE CYCLE Changes in the Population of Firms over the Industry Life Cycle: US Auto Industry 1895-1960 250 200 150 No. of firms 100 50 0 1895 1905 1915 1925 1935 1945 1955 Source: S. Klepper, Industrial & Corporate Change, August 2002, p. 654. Copyright © 2019 John Wiley & Sons, Inc. THE INDUSTRY LIFE CYCLE Strategy and Performance across the Industry Life Cycle 12 10 Growth Maturity Decline 8 6 4 Advertising/Sales Investment/Sales Age of Plant & Equip. Product R&D/Sales % Sales from New Products New Products Technical Change Value Added/Revenue 0 ROI 2 Note: The figure shows standardized means for each variable for businesses at each stage of the life cycle. 11 Copyright © 2019 John Wiley & Sons, Inc. THE CHALLENGE OF ORGANIZATIONAL ADAPTATION AND STRATEGIC CHANGE Organizational Adaptation and Change: The Sources of Inertia 1. Organizational Routines: existing patterns of coordinated activity make it difficult to develop new capabilities 2. Social & political structures: change threatens existing social relationships and power structures 3. Conformity: imitation locks firms into common structures and strategies (“institutional isomorphism”) 4. Limited Search: “bounded rationality” encourages local search; this is reinforced by managers’ contentment with satisfactory rather than optimal solutions 5. Complementarities between strategy, structure, and systems: firms create unique configurations of close-fitting organizational features--localized changes tend to be dysfunctional, while systematic change difficult Copyright © 2019 John Wiley & Sons, Inc. THE CHALLENGE



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