Read the case "Eastman Kodak in 2012: Will Its Post-Bankruptcy Strategy Be Successful?".
What are the primary reasons that Eastman Kodak was forced into bankruptcy in 2012? Does it appear that the company’s restructuring will allow it to emerge from bankruptcy as a stronger rival in the digital imaging and printing industry?
What are Kodak’s competitively important resources and capabilities? Which of its resources have the greatest competitive power? Are any of its resources and capabilities able to pass all four VRIN tests for sustainable competitive advantage? Explain.
What recommendations would you make to Eastman Kodak to bolster its standing in the commercial and consumer printing industry? What should be done to strengthen the company’s competitive position in its other segments and improve its financial performance?
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The primary reason Eastman Kodak went into bankruptcy in 2012 was its lack of transition in the 1990s and early 2000s from film to digital camera. Through a serious of bad decisions Kodak went from a front-runner in the amateur camera industry to an obsolete, indecisive player in the market. In the late 1970s Kodak predicted digital cameras would take over the whole market by 2010 and years before had started to develop digital technology through its own R&D. However the failed to act on their own research and technology. It’s quiet reasonable and strategically accurate. Kodak probably wanted to wait someone else to start digital camera selling. Then they could see whether digital camera is going to be sold as well as film.
In 1981 Sony launched its first digital camera. In the following year instead of developing a product based on their years on research on digital products, Kodak introduced a compact disk film camera. This new Kodak camera was nearly the same size as Sony’s digital camera but by doing so Kodak jeopardized quality by creating a lousy camera that took grainy photos. In 1988 after 6 years the compact, disk film camera was scrapped by Kodak. Only in 1995 would Kodak enter the digital camera market. Unfortunately these cameras were priced far higher than the competition (particularly Fuji). The first 2-generation digital cameras failed to generate sales. 1999 was the first time it had a successful digital camera but lack of profit margins due to pricing wars with Fuji forced Kodak to lay off 20,000 employees and restructure the company....
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