BUSN11082 Influencing Organisational Strategy

Disruptive changes remain one of the most challenging aspects of business, especially digital technologies. Changes within the digital technologies have been driving many companies to the edge leaving many performing dismally. The digital industry is a competitive market with many businesses having their share and this requires a response to digital revolution. Failure to respond to changes has made many companies make huge losses leading to the collapse of the business. Moreover, the company experiencing disruptive changes without faster response performs poorly in terms of financial. Disruptive change especially in innovation results in change in market or value chain aspects that need faster re-strategizing to prevent negative implication of these changes within the business profit. Eastman Kodak is an example of a company that has experience disruptive changes leading failed strategy. Kodak had remains focusing on print imaging and consumer market despite changes in the value chain leading to a massive loss. The following paper analyses the case of Eastman Kodak citing some important aspects that business can learn.    

Kodak came up with digital imaging strategy that helps in driving the company’s growth within the period of 1992-2012. The company had digital imaging strategy that was embedded with four core aspects mainly emphasis on print imaging, harvesting traditional photography, external sourcing, and managing the transition. These four major aspects were the key themes that assist the company to manage its transition from traditional imaging to digital imaging platform.

Emphasis on print imaging

The digital imaging strategy that the company uses is the focus on printed imaging strategy that believed in the inability to eliminate print imaging. The company invested heavily on the printed imaging strategy that ensures that the business develops its consumer and commercial aspect. Within the strategy, the company invested in various techniques that will ensure the company dominates the market.

Firstly, the company invested in the purchasing of printers to increase photographic business. The strategy was focusing on printers and developing and improving the available inkjet printers to increase the printing know-how in the industry. The Kodak increases its investment in inkjet technologies that make the company better print image technologies. Focusing on printing business during the period made the company to realize growth within the printing business though with limited profitability (McAlone 2015).  

Secondly, the company also invested in the digital imaging initiatives with a focus on building Kodak presence within the inkjet technologies market. The company heavily invested in building the digital image presence and position within the market. In addition, the company also aimed to increase its market share for inkjet within the digital imaging industry. Despite the effort to increase the market share, the company struggles to achieve 6% market share as compared to other companies such as Hewlett-Packard that has more than 60% market share within the digital imaging and printing market (Glowik & Bruhs 2014).   

External outsourcing

The company had another aspect of its digital imaging strategy that mainly focuses on acquiring other businesses within the photography market. External sourcing is an area of focus is the acquisition of other companies that majorly provided the film industry (Masaaki & Swan 2007). The company through its digital image initiative aimed to acquire other companies within the market to increase its share. Failure to perform within the market ensures that the company reduces its involvement within the photographic market as it continues to make loss leading to total withdrawal. This made the company to cut jobs within the company and it also reduces the film products (Baaken & Teczke 2014).

Harvesting from traditional photography

Kodak increases its investment within the traditional photography portfolio to ensure that harvesting from the business. The company had indicated that despite the transition to digital business the company will remain and increase its dominance within the traditional photography market. The company also acquire other companies within the photography market to ensure its increase its film investment and this reduces its chance of other business (Sandström 2010).

Managing transition

The Kodak forms a key pillar of its digital market strategy that would help in managing the transition into digital imaging innovation. The company, therefore, devised the approaches that can be used to manage the transition. The market approaches to transition include the consumer-oriented market, professional and commercial market. With these approaches, only the consumer market was already in operation leading to a concentration on a single part of the value chain.  This aspect of the strategy focuses on simplicity and quality market approach to ensure the company remains within the market leadership (Numssen 2012).

The Kodak had a vision of becoming a market leader within the digital image and photography industry. The approach of the company or its strategy failed to materialize especially due to much financial poor performance that was realized by the company CEO Perez. There are different reasons for the failure of the strategy that was used by the company to realize its vision within the photography market.

Firstly, poor choice of the market is one reason that leads to the company realizing that it had failed in its strategy. The company had heavily invested in the consumer market that forms the core focus and the traditional market for the company. The financial result of the market performance was dismal as compared to other areas that the company had also invested over the years. In addition, the case presented indicates that high competition within the consumer market was intense making the company has the low financial capability to perform. In addition, the consumer market which had comprised of majorly printing was misconceived leading to poor financial performance (Weeks 2015).

Secondly, the company had focused on the wrong part of the value chain within the photography industry marking the whole company to show dismal financial progress over the years. The company had focused on a single area of the value chain and this was the consumer market. This made the company invest heavily within this area leaving other areas that had little competition. Furthermore, overemphasis of the company on the consumer market mad the company to reduce its ability to control the financial investment that results in growth and performance over time. The miss-focus of the company on the consumer market, as opposed to many other areas such as sensor and displays, made the company to channel all the scarce resources to this market leading to failed strategy (Lucas 2012).

Failure to recognize the digital threat as early as possible is another reason for the failed strategy by Kodak. It important to understand, that the digital market is a highly competitive market that has attracted a variety of companies. There were many different companies that pose threat to the Kodak and the entire digital market that were not identified and dealt with on time. In addition, the company did not understand the various threats that exist in terms of the substitutes to its products making the overall competition intense. This made the company to register low performance disputes its leading within the digital image market at the time. This implies that the company succumbs to the threat that was within the market leading to low performance as compared to its other competitors such as Fujifilm. The company did not understand its weaknesses and market force and some of these are presented in SWOT Analysis and STEEPLE analysis below (Briones 2012).

STEEP Analysis

The company failed to monitor and strategize its financial performance within the digital market. Despite the high adoption of the digital technologies and digital revolution within the market, the company failed to strategize financially leading to failure of the whole strategy. Monitoring the financial progress and performance is an important aspect of the business that Kodak failed to conduct leading to limited financial performance. Moreover, the company through its CEO, realize that over a long period of time the performance of the company has not been reflected in its financial performance within the market. For instance, the CEO Perez realize that the three CEOs that has served the company failed to build a financially viable digital imaging business. This is important for the overall performance of the company within the market since the progress of the company is also measured in terms of the profitability of the business within the market (Hüsig & Soppe 2011).

Poor choice of product is another reason that leads to a failed strategy that was witnessed within Kodak’s market performance. The company had focused on the image printing that shows little performance as compared to other products within the company’s products line. Printing made the company to spend huge capital investment in the product that did not perform within the market leading to financial challenges. Furthermore, the company had highly invested in printing as its traditional product or stronghold leading to failure (Teczke 2014).

Kodak also prioritizes on areas that were non-existence such as “infoimaging” industry that ensures high spending leading to financial challenges.  The company had indicated its vision of becoming a leader in “infoimaging” within the industry, a portfolio that never existed in the first place. This implies that the company had intended to invest in areas that were not initially strategized for and the financial feasibility of the area was in doubt.  As the strategy continues to stager, the company has to reconsider becoming a market leader in “infoimaging” leading to poor financial strategy. Moreover, the company did not understand its business environment so as to act according and the analysis of PESTLE show the market situation as shown below (Durantin, Fanmuy, Miet & Pegon 2017).

The better alternative strategy that Kodak ought to have used was business diversification. The best strategy that the Kodak company would have used was diversification of its products or portfolios. A close comparison between Kodak and Fuji shows that the Fujifilm had diversified its products to increase the performance of the company within the market. Diversification of the business was an alternative strategy the business ought to have used to ensure that its business remains competitive within the market. Kodak mainly focused on digital imagining, print imaging, and consumer market. This made the company to only concentrate on a single aspect of the value chain as compared to its competitors that diversified its business. The company ought to have diversified its business to ensure it is not laggard in adopting changes within the digital imaging market. The company was slow in adapting to changes within the market and this was critical to ensure that the business remains relevant within the market (Martin 2011).

Firstly, the diversification of value chain focus was another area that the company would have focused on as a strategy to improve its performance within the value chain. The company focus should have changed from the consumer market to other areas also as this ensures that the company competes within the market. The digital imaging market is competitive and companies that diversify its products within the value chain have high performance. In addition, the company focusing on other areas also is important for increasing its profits within the market. One of the reasons for the failed strategy was focusing on the consumer rather than other players along the value chain. This made the company to produce a single product that cannot help the company compete within the market (Scott, Johnson, Sinfield & Altman 2008).

Secondly, response to digital changes within the market is another area that the company would have used to solidify the diversified strategy. The company had a poor response to changes within the digital market and this made the company remain focusing on the limited area. Moreover, the company would have focused on other products as a strategy used in responding to the digital revolution. The slow responses also enable the company to perform dismally within the market despite high invested the company had made within the print imaging market. This implies that the company needed to change its strategy on time by diversifying its product line to ensure intense competition. Responding to changes was also important for ensuring that other companies within the same market do not use its downfall for maximizing their profits (Rees 2012).  

Lastly, in order for the company to diversify its business the company needed to forms alliance, partnership or acquisition of other business with different business focus or portfolios. The diversification of the company needed to have used its acquisition of businesses to increase other portfolios or products. During the acquisition of other companies, the Kodak needed to increase its consumer products by acquiring other companies or businesses with different products. The company had made some acquisition with a similar product line as it uses to sell and this was still focusing on the same consumer market without diversification. Moreover, the company would have focused on some of its markets such as commercial and professional markets as this would have help in containing the disruptive changes within the market (Scott, Johnson, Sinfield & Altman 2008).

There are many different things that companies that are facing disruptive change in their core business can learn from the Kodak. Companies that are undergoing disruptive changes in their core business experience both financial and operational challenges that can lead to negative effects. Changes are also experienced in a competitive business environment and require more strategic understanding to ensure success. Therefore, these business or companies need to learn various issues that range from the product line, financial, adaptability and understanding the strategy itself (Martin 2011).

Firstly, companies should learn to adapt to changes in the business environment as this will determine the capability of the business to remain within the competitive market. There various changes that are occurring in the market that need a quicker response. Kodak was slow or lagged on responding to the digital revolution within the market that made the company fail in competing with other companies within the market (Raja & Cohen 2015). The slow response also made the company remain focusing on a single area of print imaging despite changes and revolution in digital imaging technology. Slow response to changes was also witnessed within the market when the company started performing poorly leading to losses. Companies need to learn to make faster changes to their core business in case of poor performance within the market. In addition, the company needs to increase its restructure its business as a response to changes in the market. Within a competitive market such as the digital imaging technology that Kodak ventured into, response to changes in the core business require a faster response to ensure that there is not a failure (Archibugi, Filippetti & Frenz 2013).

Microsoft Corporation

Microsoft is another company that has been undergoing technological disruptive changes that require proper handling to ensure performance. Microsoft products have been experiencing changes that result in lower product prices. Microsoft has been slow to adapt to changes in innovative technologies. The company, therefore, needs to adapt to changes in order to compete with other companies such as Apple Inc. in addition, the company need to consider restructuring its product line to increase its profitability. This is to adapt to changes in the market leading to changes in the prices of products (Rahman et al. 2017).

Secondly, companies need to learn to diversify their product line to help in containing disruptive changes in the core business. Despite changes within the core business of Kodak, the company continues to focus on print imaging business thereby having a limited product line. Failure to diversified result in the failure of the Kodak as a company and companies such as Microsoft that have been going through changes should consider diversifying their products line. In addition, the company was reluctant to diversify it is earning to help in competition within the market. Diversification helps in increasing the earning within a competitive business environment and ensures that the business remains relevant within that environment. This help the company to understand its market forces and the following is the analysis of the Porter’s five forces of market where Kodak operates (Raja 2014).

Thirdly, monitoring of strategy especially financial progress or performance is another area that companies experiencing disruptive changes should learn from Kodak. Kodak had performed in many different aspects without performing in the financial aspect. This lead to a loss despite increased investment leading to failure as the company could not relate its performance and financial result in the market. Companies should, therefore, learn to monitor its financial performance and financial capabilities as this help in the determination of the overall performance of the company. In addition, the company experiencing disruptive changes in its core business need to understand the financial implication of the changes. This is important, particularly when evaluating the likely negative effect of adapting to changes (Christensen, Wang, & van Bever 2013).

Sony Corporation

Sony is another company that has also experience disruptive changes that has affected its operations. The company has been struggling to contain these changes within the digital market making it experience some financial challenges. The company needs to learn from the experience of the Kodak that has also undergone the same path. The Sony being one of the leading technological corporation need to response faster to changes at it has been name one of the largest companies with slow adaptability to changes leading to financial challenges. In addition, the company needs to learn to focus on various value chain aspects such as professionals market as this will help it maintain its market position (Rees 2012).

In conclusion, disruptive changes within the business have massive implication in operation and profitability. Kodak had various challenges that lead to a failed strategy that it had used due to changes within the digital imaging market. Changes within the core business remain one of the tricky business changes that affect many companies leading to changes. There are many different aspects of disruptive changes that business such as Microsoft, Sony and Walt Disney that are experiencing changes can learn. Some of the aspects of the business that help in containing disruptive changes are diversification of business and products line.

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