Assignment 3: A New Strategy for Kodak
Review Case 28 “The rise and fall of Eastman Kodak: Will it survive beyond 2012?” located in the textbook. Assume that you have been hired by Kodak as a business consultant to recommend a new corporate-level strategy for the company to improve declining sales, increase profitability, and expand the company to the Cloud service industry.
Write a five to seven (5-7) page paper in which you:
- Establish five (5) key objectives for Eastman Kodak that encompasses the operational, financial, human resource aspects of the business. Next, argue that each of the established objectives is essential to the success of the company within the Cloud service industry.
- Analyze Kodak’s horizontal and vertical integration strategy and determine the corporate level strategy that is more appropriate for the company to establish a competitive advantage in the Cloud service industry. Provide a rationale for the determination.
- Determine five (5) ways in which pursuing a multi-business model based on diversification may increase profitability for the company. Provide at least two (2) examples of such use of a multi-business model from industry to support the rationale.
- Recommend one (1) implementation strategy for Eastman Kodak that considers organizational design, strategic control systems, structure, and the type of organizational culture fitting for the organization and its new industry. Justify the recommendation.
- Speculate on the way in which both the corporate-level strategy and the implementation strategy you recommended in Question 2 and Question 4 would support ethical business behaviors. Analyze the significant manner in which ethics, corporate social responsibility, and environmental sustainability impact the implementation of the strategies that you have recommended.
- Use at least three (3) quality academic resources in this assignment. Note: Wikipedia and similar type Websites do not qualify as academic resources.
The specific course learning outcomes associated with this assignment are:
- Recommend effective business strategies based on an analysis of domestic and global operating environments, market dynamics, and internal capabilities.
- Analyze a plan to implement a firm’s strategy and manage the change from current operations.
- Assess how ethics, corporate social responsibility, and environmental sustainability impact strategy.
- Use technology and information resources to research issues in strategic management.
- Write clearly and concisely about strategic management using proper writing mechanics.
A New Corporate-Level Strategy for Kodak
Eastman Kodak Five Key Objectives
Eastman Kodak is among many firms that have given way to a troublesome technology commonly known as digital divide. The company recently managed out of chapter 11 bankruptcy that permitted it to restructure its organization. Entering the firm at this moment as a company business consultant, I would advocate for a restructuring of the inner core of the firm. The restructuring should focus on financial and business operational aspects and on ways to leverage the novel venture, to maintain a competitive advantage and increase profitability. To start the procedure, the company should identify a suitable organization and make a contract with it to implement the cloud services by use of the current business model of the company. This will lower the probability of the selective firm to be a competitor. The next objective would be to duplicate this business model across various divisions to include the novel joint venture firm that will offer the cloud service. This will ensure consistency in the business and support both companies’ objectives and goals, developing a stronger market force.
The next objective will be to input more resources in cloud service research and development that will promote innovations and ascertain that the Kodak cloud service maintain competitiveness. This is essential since technology is changing at a very swift rate and the cloud service is a technical service which will need steady market monitoring to remain competitive. In regard to human resource factor, with unstable economy and layoff history, the next objective would be to enhance infrastructure of the organization and to evade risky investment that would demand so much input to remain competitive. This will reduce the company operation cost and encourage the company to invest in more profitable businesses that will always enable them to maintain its workers and give them a good package. The next objective is to employ well trained and innovative employees who will assist in developing unique and reliable services at a cheap cost, without demanding extra training. This will enable the company to grow and to offer services that will be more competitive and preferred and thus, bettering its performance.
Kodak’s Horizontal and Vertical Integration
Eastman Kodak is so much into vertical balanced integration system where it controls all its business operation. Moreover it offered wide range of services and products in which majority are produced by the company from the beginning. The firm is structured along three sections that include the consumer digital imaging group, the film, photofinishing, entertainment group, and the graphic communications group (Jones, 2012). The company also controlled its retails and supply chain such it hardly outsource to accomplish its application. This contributed a lot in the development of digital divide and increasing the operation cost of the company to a level of bankruptcy. The vertical integration encouraged development of all the company required products from inside and thus, the company did not take notice of the technological change and thus, making it to be overtaken by technological development (Bcmscorp.com, n.d.).
The change of technology pushed the company into altering its integration strategy as a way of remaining competitive. The company formed an alliance with Matsushita, TDK, and IBM. This eases the company’s strain on production cost and other operational costs, assisting the company in its past glory. However, the company did not manage to keep up with the swift change of technology and hence it experienced a downfall later on.
The best corporate level strategy that Kodak can employ to improve cloud services competitive advantage is embracing horizontal integration and collaboration where by the company will partner with other suitable organization that have enough resources to enable it to offer extra cloud services and to integrate new components that will be established through research. Kodak is currently trying to revive its financial condition and thus, it may not be able to support diverse cloud services without an assistant from a more stable company that understands the business better. Good collaboration will boost the workers moral and will to work and to apply their skills to the best level. This will help the company to provide quality services, that are reliable and thus, wining customer’s trust. The company can also consider employment of simple marketing strategies that will keep their customers close and helps it to win more customers. This would include offering free simple services such as software updates (Bcmscorp.com, n.d.).
Benefits of Multi-business Model based on Diversity
Pursuing a multi-business model founded on diversity increases the competitive advantage of an organization in a number of ways. Multi-business allows for operations in multiple industries. This implies that the company products or services will be known in more than one industry. This increases the market share of a company and thus, increasing its competitive advantage. Multi-business model also encourages quick growth of an organization, promoting the spread of one or more of the organization products or services at international level. This also increases the market share, making a company to compete at global level (Morrison et al., n.d.).
Multi-business model incorporate diverse workforce with knowledge from different fields of operation. This improves the level of creativity and innovation, making it easier for an organization to solve problems and to create more improved products or services than their competitors. This helps the organization to win customers trust in all its diverse products or services and thus, increasing its competitive advantage and thus, the organization profitability. Moreover, satisfaction in one product promote the development of the customers’ trust to all other products produced by the company and thus, acquiring a market of all other products from one customer. This increases the company’s sales and thus, increasing its profitability. Multi business model also safe an organization from a downfall in case business in one industry happens to be cornered. It ensures that the organization is always in business and it is not affected by crisis in one industry. This makes its financial records stable, attracting many partners and shareholders to alliance with it and thus, promoting more growth and increasing organization profitability. The two companies that have embraced this kind of model in the industry include Apple Co., which is in computer hardware industry, smartphone industry, software industry and cloud service industry, and Microsoft Corporation, which is in software industry, mobile phone industry and cloud service industry.
Recommendation on Eastman Kodak Implementation Strategies
The best implementation strategy for Eastman Kodak is the use of three C’s strategy. This strategy allows for strategy clarification where the strategy developers brief other organization members on the strategy plan and how they intend to implement it. This will incorporate all in implementation of the strategy. Clarification is like a short training on how the strategy will work. Thus, involvement of other organization stakeholders will ensure that every one takes part in the implementation of this strategy and thus, making it easy to understand how it works. The second C stands for communication. Good communications is essential in promoting successful integration and functional strategies. Communication should be done frequently and to all, using all available media including emails, message boards and in department meeting, reporting the progress and discussing any problem that may have been encountered during implementation.
The last stage would be cascading the strategy. In this case, managers will be involved in translating the element of the strategy to their functional area. This will permit them to develop and have the procedure of cascading the strategy as well as structuring implementation plans with high possibility of execution. This stage also involves training, improvement, meeting with other stakeholders and strategy testing. This is the best implementation strategy since it involves all in the integration, and thus making it easy to use it. The strategy is first approved by the top management who then involve their managers and then their workers, catering for hierarchical flow of power in the organization. It also allows collaboration and integration of all in the development of the organization processes and thus, it satisfies the organization requirements (Hansen & Smith, 2006).
Implementation Strategies effect on Ethical Business Behavior
The implementation and corporate level strategy would support ethical business behavior in that horizontal integration and collaboration will promote good relation between the organizations and is stakeholders. The two strategies promotes the quality of services and products and thus, promoting the customers relation with the business. The corporate social responsibility, ethics and environment sustainability influences the implementation of the two strategies in that, the implementers must consider all these factors while implementing the strategies. Thus, they restrict the manner in which the strategies must be implemented since they must be satisfied to the best level possible.
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