What Went Wrong for eastman Kodak Essay Example | Topics and Well Written Essays - 1250 words

What Went Wrong for eastman Kodak - leaven ExampleThirdly, Kodak was unable to make the new digital technology to fit coherently with its other capabilities as a core competency. In the subsequent paragraphs in this discussion, Kodaks approach in these three strategies is compared with IBMs in order to highlight the ultimate failure of the former and the success of the latter. Kodak rise to dominance in the imaging industry was characterised by it use of a razor-edged strategy. This strategy was implemented by selling cameras at a very low cost, and earning profits from the sale of expensive films. The high margins on film fuelled the corporations profitability and growth to the extent that the company became too dependent on its film business. The task with this is that the company concentrated on acquiring core competencies on film technologies while it continued to redeem less attention to equipment. In spite of pioneering in the field of digital cameras, the company discarded the intellection of pursuing future agonistic advantages in that field because of the fear that this would bathnibalise its film business (Nate, 2012). agree to the resource-based view of strategy, firms that have superior systems and structures are profitable not because they engage in strategic investments that may deter entry and raise prices above long-run costs, but because they have markedly lower costs, or offer markedly higher quality or product performance. However, this strategy is often not enough to sustain significant competitive advantage for long. According to Teece, Pisano and Shuen (1997), winners in the global marketplace have been firms that can demonstrate timely responsiveness and rapid and flexible product innovation, coupled with the management capability to in effect coordinate and redeploy internal and external competences. Kodaks failure arose from its managements comfort with its register huge resources and core competencies which prevented them fr om developing dynamic capabilities. In 2011 IBM marked its 100 year milestone. As deuce centenarians, it would be appropriate to compare IBMs continued success against Kodaks demise. IBM, like Kodak, has faced the practiced force of disruptive change on its core business as faster, cheaper and nimbler competitors rapidly ate forth its market leadership. In the early 80s IBM introduced the IBM PC that created the first truly mass market for the personal information processing system (Koehn, 2011). However, within a decade IBM had fallen behind in this market that it had created so much that in the 1992 financial year the company recorded a US$8.10 billion loss (Denning, 2011). Knowing customers good In the early 90s when IBM was performing its worst the financial analysts believed the companys best bet for excerpt was to break it up and sell it. However, the newly appointed chief operating officer Lou Gerstner overcame that pressure and instead focused on interacting with custom ers and industry experts in order to understand IBMs value-proposition from the customer/market perspective. This exercise enabled the new CEO to identify IBMs greatest strength to be its ability to provide customer with integrated solutions. As such the organization dropped the earlier desire to split the company. Splitting IBM would have destroyed its unique competitive advantage. Armed with this knowledge Lou Gestner changed IBM strategy to be an enterprise that could understand and provide its customers wide-ranging IT needs. Today, IBMs orbiculate Services provides the largest share of the companys revenue (Koehn, 2011). On the other hand, Kodak acted as if it were not impact when Sony introduced the Mavica digital camera.