Business Case Studies, Leadership Case Study, Tata Group,Ratan Tata

Code : COM0010

Year : 2004

Industry : Engineering, Electrical and Electronics

Region : Global

Teaching Note:Available

Structured Assignment :Available

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Introduction:After a series of restructurings, turnarounds, layoffs, and cutbacks, Rochester, New Yorkbased Eastman Kodak Company (Kodak), still struggled to make a successful transition to the much-needed digital photography. In 1997, there was a surge in demand for digital cameras that began to out number traditional analog cameras. The company's core business, film sales, also got affected due to the digitization of photography and a debilitating price war with Tokyo-based Fuji Photo Film Co. (Fuji). The companywas not ready, and its sales started to decline from$15,968 millions in 1996 to $14,538 millions in 1997. Kodak geared up its efforts to meet the requirements of digital photography market.

In 1998, Kodak invested around $500 million into research and development to develop new digital products and services. Though sales rose initially, Kodak could not consolidate its position in the market. The industry analysts opined that success in digital imaging required constant innovation and change - which Kodak lacked. The problems of the company further intensified with a bloated cost structure, confused marketing and a strong rising dollar. To offset the decline in sales of films, the company started focusing on emerging markets like China and India. This apart, in the US and Europe, the company concentrated on the development of new digital products. "Our strong and growing traditional core business in photography will allow us to fund our digital strategy over the long term. We see the convergence of film and digital driving more pictures and more output. Increased demand for hard copy output – traditional photographic prints and printsmade fromdigital pictures, will drive output growth aswell", said DanielA. Carp, Chairman and CEO, Kodak...