Porter’s 5 Forces Analysis of Kodak Company
The photographic film industry has experienced great transformations. Kodak is one of the great companies that have impact the industry in great ways. Kodak also known as the Eastman Kodak Company is an American technology company founded by George Eastman in 1888 and focuses on imaging solutions and services. On top of this, it Kodak provides packing, functional printing, graphic communication and professional services globally.
It has dominated the photographic film sector for many years, but like any other company, it has also experienced a number of challenges over years. Kodak has tried to intensify its impact in the photographic business, but it has nose-dived as a result of decline in sales in US. It has also experienced a huge competition from companies in the industry for better market share. Surprisingly, competitors like Canon, HP and Sony have posed vast threats that have impacted Kodak’s operations in the film industry.
Today, most of its products span across digital cameras, inkjet printers, sensors, software, retail kiosks, and paper processing chemical and professional photographic films services among others. Mergers with companies such as AOL online, Cinelabs Ltd and Sanofi have helped Kodak enjoy a great market share. Porter’s five forces have also impacted Kodak hugely and it has founded better ways to compete with its rivals in the photographic film industry. These forces include;
- Threat of new entry- From the Porter’s 5 forces analysis, it is clear that the impact of new entry to Kodak is moderate. A lot of capital is required to join the photographic film industry. Most of the new entrants have not been able to cope with Kodak due to lack of experience and knowledge in core areas like digital imaging and photography.
- Power of consumers- The number of buyers in the hunt for electronic products and services is high. Companies like Kodak, Sony and others have always presents clients with an opportunity to enjoy wide range of film products. Consumers have always expect the best from the industry.
- Power of suppliers- In the photographic film industry, the power of suppliers is low. Majority of the suppliers in the hunt out for film products and services are locked out both locally and internationally. Kodak has supplier’s contracts that run for one to three years and it is cautious when it comes to third party suppliers as they reduce industry profitability.
- Threat of substitute products and services- Threat of substitute’s products and services is high in the film industry. Companies in the sector work hard to match their specifications, pricing and other characteristics of the industry. There are less switching costs between substitutes as consumers can change the photographic film products based on their preferences.
- Competitive rivalry- Kodak has been facing huge competition from Sony, Canon, Nikon, HP and Fuji Photo Film among other companies. Competitive pricing and increase of prices on related products and services has impacted its operations in the industry.
Kodak has worked hard to reach a wide market and it has developed new competences for future developments. It has also strategically transformed its entire business operations to utilize the new opportunities in the industry despite a number of challenges it has faced.
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