Eastman Kodak & the Competitive Environment

Eastman Kodak once dominated the consumer photographic market, but has recently lost some market share to Fuji film in photographic supplies, and to Polaroid in instant cameras. The high rate of usage of 35mm cameras also meant a loss of market share as consumers moved away from Kodak's flagship instamatic cameras and to the higher quality (but now easier to use) reflex cameras. This research considers the current strategies in place at Kodak, the competitive environment in which the company operates, and evaluates alternatives the company might follow in coming years in order to ensure its success.

Kodak develops, manufactures and markets consumer and commercial imaging products. The consumer imaging products are used for capturing, recording or displaying a consumer originated image. For example, traditional amateur photography requires, at a minimum, a camera, film and photofinishing. Photofinishing, in turn, requires equipment and supplies, including chemicals and paper for prints.

Kodak manufactures and markets various components of these imaging systems. For amateur photography, Kodak supplies films, photographic papers, processing services, photographic chemicals, cameras and projectors. Recent imaging products developed by Kodak include new generations of films, cameras, photographic papers and single-use (disposable) cameras.

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e risk associated with this strategy since it assumes that a single appeal will be equally effective in all markets. Kodak's strategy also includes aggressively protecting its domestic market and pursuing international markets, particularly the lucrative Japanese market where Fuji film dominates. The U.S. government agreed to investigate trade practices in the Japanese film market in mid-1995 as part of ongoing talks with the Japanese. The Office of the United States Trade Representative accepted Kodak's petition to investigate trade practices in the Japanese film market based on Kodak's allegations that Fuji Photo controlled the Japanese film market through its ownership of the most powerful wholesale film distributors and other illegal practices. Kodak believes that its relatively small (ten percent) share of the Japanese market is the result of anti-competitive practices of Fuji Photo. While the Kodak filing with the office of the United States Trade Representative is persuasive, Fuji has already made initial comments that strongly counter a number of the allegations. Also, Fuji argues that the situation between Kodak and Fuji is exactly reversed in the United States, with the home supplier (Kodak) having about 70 percent

Category: Business - E