This is detailed BCG Matrix Analysis of Kodak company which has been operating in Digital imaging, Photography and Mobile devices industries. It was founded by George Eastman and Henry A. Strong back in September 4, 1988. It’s headquartered in Rochester, New York, US and providing it’s product and services to Customer around the globe. Kodak is dealing in Digital imaging, photographic materials, equipment and services products.
Introduction and Background
Eastman Kodak Company, is an eminent American technology company, was founded by George Eastman in 1888, famously known by the masses as “Kodak”. It’s headquarter is located in New York. Kodak has diversify divisions, competing in different industries’. Following are the segments of Kodak; Eastman Business Park (industrial and manufacturing complex), enterprise inkjet system, 3D printing and packaging, software and solution, consumer and film, Medical diagnostic equipment and slid projectors.
BCG Matrix of Kodak
BCG matrix is designed for the companies, which have different segments (autonomous divisions). Companies operating in diversify business portfolio, required to formulate distinct strategy for each division. BCG matrix help the companies in doing so. Kodak is a multidimensional firm and has a broad product width and every single segment requires different strategic planning. BCG matrix has four components, question mark, stars, cash cows and dogs. Each component draws attention to the needs of each segment and product line. BCG matrix will examine that, which product of Kodak, comes in the category of which component, with the help of “market growth rate” and “company market share”
Question Mark
In 1979 Kodak was at the zenith of photographic film industry. Segment secured 90 % of market share in camera and its supplementary products. Within few years Fuji films, a Japanese company occupied 25 % of market share. Soon Kodak anticipated, the wants of customers, in addition, threat of losing the market share to its competitor Fuji films. Kodak develop first ever digital camera but did not introduce it in market. CEO was afraid of losing photographic film business, however, Kodak finally entered the market and secured 1st place by securing 40 percent of market share in digital camera industry, by 2005. Unfortunately, when new entrant entered the market i.e. Sony, Nikon and canon, Kodak was not able to compete with the prices of new entrant and lost its market share to its competitors. In a high growth industry Kodak market share declined, thus, Kodak digital camera is question mark and such segment should be sold.
Stars
Since its conception Kodak had many stars segments, till 2013, due to which brand name of Kodak was so elevated in different industry but all those segment did not reach to the level of cash cow. Digital camera, commercial inkjet printers and consumer inkjet printers, were stars segments of Kodak. Mentioned segments had high market share in high growth industry but as the market growth declined their market share declined with it and they could not grasp the level of cash cows. In 2005 digital camera segment of Kodak was market leader but gradually it become question mark and now; is in the category of dogs. Unfortunately, most of its stars segment moved clockwise in regard to BCG matrix. Consumer and commercial printer generated good revenue when there was demand for it but in 2013 market growth declined because of product substitution and those segments to become dogs instead of cash cows. 3D printing segment may become stars, because it’s growing industry and Kodak is focusing to develop this segment.
Cash cows
In 2012, Kodak declared bankruptcy as a result of not having cash cow segments to milk. There are few products of Kodak which fell in to the category of cash cows, on the other hand does not have a segment. In print segment “Digital offset Plates” are cash cows; in 2015 and 2016 revenue generation of the product was quite impressive, it may help the company to come back.
Dogs
The segments of many organization change with the passage of time. Same is the case with Kodak Eastman Business Park, which is an industrial and manufacturing complex, formerly known as Kodak Park. Once this industrial complex was in the category of “Stars” and was the hub of manufacturing photographic product for motion pictures in the world. 154 building were occupied in the complex employing thousands of employees for the sole purpose of manufacturing photographic product. Due to decline in industry growth rate and market share of segment, Kodak started downsizing its manufacturing operation. Many building were demolished, since they were not in use, however, now both segments, Eastman Business Park and consumer and film are dogs. Retrenchment is the best strategy for dogs because such segments could become viable, via this strategy.
References
Annual report of Kodak 2015-2016
http://files.shareholder.com/downloads/EK/3954697192x0xS1193125-16-505191/31235/filing.pdf
September 6, 2013. Retrieved from.
http://whattheythink.com/articles/65235-kodak-proclaims-we-are-ready-whatever-life-after-chapter-11-may-bring/
Kodak emerges from bankruptcy. Retrieved from.
http://variety.com/2013/biz/news/kodak-emerges-from-bankruptcy-1200597234/
Kodak to sell film business that made its name. Retrieved from.
http://articles.chicagotribune.com/2012-08-24/business/chi-kodak-to-sell-film-business-that-made-its-name-20120824_1_patent-sale-chief-executive-antonio-perez-eastman-kodak
History and Segment information. Retrieved from.
http://www.kodak.com/corp/aboutus/heritage/georgeeastman/default.htm
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