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Management Success in a New Environment

Will Eastman Kodak under the leadership of CEO Perez succeed to manage its new environment? Perform an external analysis of Kodak in the following manner;:

- perform the analysis of the environment applying Porters five Forces Model
- make sure to also examine elements of the Macro Environment
- evaluate how Eastman Kodak managed their environments
- identify threats and opportunities in the environment and make recommendations.

Solution Preview

Eastman Kodak Company is known for its wide range of photographic film products, Kodak has consistently increased its market share among digital camera manufacturers. According to IDC, Kodak is the world's largest digital camera manufacturer, shipping over 4.9 million digital cameras in 2004 to surpass traditional digital camera giants Sony (4.3 million) and Canon (3.5 million). Digital camera competitors with smaller market shares included HP, Olympus, Fujifilm, Casio and Nikon.

ANALYSIS OF ENVIRONMENT APPLYING PORTERS FORCE

Porter's 5 forces analysis is a framework for industry analysis and business strategy development developed by Michael E. Porter in 1979 of Harvard Business School. It uses concepts developed in Industrial Organization (IO) economics to derive 5 forces that determine the competitive intensity and therefore attractiveness of a market. Porter referred to these forces as the microenvironment, to contrast it with the more general term macroenvironment. They consist of those forces close to a company that affect its ability to serve its customers and make a profit. A change in any of the forces normally requires a company to re-assess the marketplace.. Michael Porter, considered to be one of the foremost gurus' of management, developed the famous five-force model, which influences an industry. These are:

1. Supplier Power: Here you assess how easy it is for suppliers to drive up prices. This is driven by the number of suppliers of each key input, the uniqueness of their product or service, their strength and control over you, the cost of switching from one to another, and so on. The fewer the supplier choices you have, and the more you need suppliers' help, the more powerful your suppliers are.
2. Buyer Power: Here you ask yourself how easy it is for buyers to drive prices down. Again, this is driven by the number of buyers, the importance of each individual buyer to your business, the cost to them of switching from your products and services to those of someone else, and so on. If you deal with few, powerful buyers, they are often able to dictate terms to you.
3. Competitive Rivalry: What is important here is the number and capability of your competitors - if you have many competitors, and they offer equally attractive products and services, then you'll most likely have little power in the situation. If suppliers and buyers don't get a good deal from you, they'll go elsewhere. On the other hand, if no-one else can do what you do, then you can often have tremendous strength.
4. Threat of Substitution: This is affected by the ability of your customers to find a different way of doing what you do - for example, if you supply a unique software product that automates an important process, people may substitute by doing the process manually or by outsourcing it. If substitution is easy and substitution is viable, then this weakens your power.
5. Threat of New Entry: Power is also affected by the ability of people to enter your market. If it costs ...

Solution Summary

Almost 2000 words give an analysis of Kodak's environment using the Porters Five Forces model, and including threats, opportunities and recommendations.

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