The Resources And Capabilities Of Kodak Commerce Essay

The Resources And Capabilities Of Kodak Commerce EssayThe Eastman Kodak union, otherwise know as Kodak, provides imaging products and services to the photographic commercializedises. It was founded in 1881 by a man named George Eastman, who created the first dry plate formula which he whence patent. Eastman believed that sassy products should be highly user friendly and should be targeted at reaching regular everyday people, making photography something everybody could do and enjoy.By 1884 Kodak had become a popular household name. George Eastmans early success was due to one of his first innovations, the roll film, Eastman believed that this creation would be as handy as the pencil. In 1888 George Eastman put the first simple camera into the hands of the world consumer with the slogan you press the scarceton, we do the backup man (Eastman, 1988). Eastman demonstrable principles and break in devote to make Kodak a success, these moderate principles and value ar low salute mass production, the brilliance of lineament, international distribution and the dogma that growth give the gate only be achieved through nonstop improvements in research and development. George Eastman alike expressed Kodaks competitory philosophy as, Nothing is much important than the value of our name and the quality it stands for. We must make quality our fighting argument. (Eastman, 1988).By 1902, Eastman Kodak was producing 80 to 90 percent of the worldsCelluloid film. By the 1930s, the confederacy operated dozens of huge, specially designed film-making machines at its Kodak Park plant.The Eastman Kodak company has continued to grow and switch with technology, creating peeled products and processes to make photography simpler and more attractive. Today Kodak is know not only for photography but their images atomic number 18 used in commercial marketing across the world and the diversion sector, enabling the use of technology, imagery and information to ch ange how people and wrinklees surpass with each other.Capabilities.Organisations atomic number 18 not identical as they have diametrical capabilities. If an presidential term is to stumble a competitive advantage, it will do so on the basis of capabilities that its rivals do not have, or have obstruction in obtaining.Strategic cap business leader is the resources and competences of an validation needed for it to survive and prosper. Kodak is a market loss loss leader but to become a market leader Kodak had to adapt and change with the world as new technology became progressively superior. The biggest problem with an increase in technology was the digital age. Kodak was the market leader in pre-digital age imagery and photography which included film, photo news report and chemical development. The digital age brought the development and increase of technology to which Kodak could not compete.The Kodak Value fibril Pre-digital AgeThe diagram below demonstrates Kodaks stre ngth in almost all aras of the traditional photography process.film camera video recording cameraImage captureProcessingStoragePrinting project Retailer processingat retail stores reprints(Gavetti, 2005)To overcome this important acquaint in the companys life cycle Kodak had to refer back to the initial guiding principles and values George Eastman developed for the company which were low cost mass production, the importance of quality, international distribution and the belief that growth can only be achieved through continuous improvements in research and development. By using these principles and values as a guide to improve the company and push themselves into the digital age, the diagram below shows the changes that needed to be do in rove for Kodak to prosperedly enter the new age digital market.The Kodak Value Chain Post-digital Age. At home printers inkjet consumables, paper Online (paper) At retail stores Online (email, Internet)-digital camera film camera Film cameraR etrievalImage capture digitalisationStorageTransmissionPrinting Digital Cameras softwargon Scanner at home Kiosks at retailers Digital mini-labs Online services Hard disk floppy disk disk / CD Removable storage (e.g. Memory stick)Manipulation central processing unit manipulationProjection*colou bolshy box shows Kodak was only partly baffling at this stage.(Gavetti, 2005)To gain a competitive advantage, organisations must reposition themselves in order to retain advantage of a changing market, or in some cases hold on to their normal resource base. there argon two different views, the Resource Based muckle (RBV), otherwise known as the inside out perspective and the Market Based View (MBV), otherwise known as the outside-in perspective.The resource establish view of strategy is the competitive advantage and superior performance of an organisation which is explained by the specialty of its capabilities. In 1959 Dr Edith Penrose developed the idea that firms compete on resources and not their market positioning which supports the resource based view. Another supporter of the resource based view were Prahalad and Hamel who in 1990 suggested that, resources that atomic number 18 valuable, rare or are in some form difficult to imitate form the core-competencies that enable an organisation to compete successfully.In 1985 Michael Porters Competitive Strategy journal suggested that firms should persistently take their environment as the starting point in order to determine an appropriate strategy, thus supporting the market based view.In 2003 Kodak discrete they needed to apply the market based view as a strategy to finally revolutionize into the digital age. Kodak made many alterations and changes in order to successfully gain a share in the new market.Dynamic capabilities are an organisations abilities to renew and recreate its strategic capabilities to meet the necessitate of a changing environment. Dynamic capabilities may take the form study strategic mov es much(prenominal) as acquisitions or alliances by which new skills are learned. In 2004 Kodak completed the acquisition of Scitex Digital Printing, and sold its remote catching systems to ITT Industries. A strategic partnership was formed with Verizon Wireless. The Eastman Kodaks company also acquired balloting rights in Chinon Industries, through its Japanese subsidiary. Kodak acquired the image sensor business from issue Semiconductor, and also closed its plant in Australia. At the end of 2004 Kodak, fuji Photo Film and Konica Minolta Photo Imaging formed a house painting archiving Kodak and sharing standard group (to enable the preservation of digital photos and exploit images on CDs, DVDs and other types of media).To address the development of the information age in cellular technology Kodak achieved an agreement with Cingular Wireless and Nokia to develop services for officious phones with cameras.Resources.A resource is a person, asset, material or capital which can be used to accomplish a goal. Tangible resources are the visible assets of an organisation such as plant, labour and finance. Intangible resources are non-physical assets such as information, innovation and familiarity. To sustain a competitive advantage a firm must have unique resources.Kodak has many resources. When the company was founded George Eastman patented the creation of the dry plate formula, this asset was the beginning of the success of Eastman Kodak as a market leader. George Eastman was himself one of the main resources of the company it was his ideas, innovations and creations that created the company and made it the success it is. He not only created the start of photography but he created a guide for the company, a set of principles and values for the company to follow to be successful. Kodaks company logo is a resource as Kodak was the first to integrate its name and look into a symbol with their red and yellow trade dress coloring material. Employees such as m anagers with valuable knowledge are an important resource especially managers that have been hired since the managerial re-structure who have up to date knowledge in the digital age. Of chassis all the other workers and employees (labour) are reasonable as important to come up the company going, workers with the necessary skills and experience that run the company and plants in a successful and efficient manner. Kodak has a lot of equipment, some of which Kodak has had to change and has had to be updated since the change and increase in technology in the digital age. pay is also a main resource as without it there are a lot of other resources you cannot have finance affects the entire hurry of the business. Innovation is a key resource, not only was it important for the creation of the company but it is merry for the future of it. To a greater or lesser degree, innovations either enhance or destroy competencies that a firms already possesses (Utterback, pg183). An fashion mod el of innovation by Kodak is the razor blade strategy that George Eastman apply at the beginning of the company. Kodak sold cameras at low prices in order to generate profit from the sales of films for the cameras.The digital age shook the Eastman Kodak company. Kodak was stuck in the past not unable but unwilling to change with the rest of the world as technology increased and advanced. Kodak had the ability to take control when the digital market emerged but chose not to because they believed nothing could be as pioneering or as popular and as the film. The beginning of the change into the digital age was in 1981, Sony launched the introduction of the first filmless digital camera called the Mavica. Films were seemly outdated and this was what Kodak needed to realise.Had Kodak taken control and made the change at the right time, Kodak would be in a completely different situation, withal Kodak was too late to recognise the need for change and when they finally acquire they nee ded to change in order to survive they were slow to play off which in the end cost them the market leadership.Competencies.Competencies are the skills and abilities by which resources are deployed effectively through an organisations activities and processes. Core competencies are competencies used to achieve competitive advantage in ways that others cannot imitate or obtain.Competences are created as organisations combine humans and technology. If correlated together perfectly these competences will change over time as both knowledge and technology develops. Chandler worked and developed this theory further in both The Visible Hand (1977) and outgo and Scope (1990). The link between humans and technology can be seen within the Kodak company, for example, recently Kodak have made changes to their managerial structure which has enabled them to gain new managers with knowledge and experience in digital photography and Kodaks continuous networking strategy facilitates business opport unities with like-minded business people. An example of networking for Kodak is when George Eastman marketed the first commercial transparent roll film in 1889, the impact ranged beyond consumer and overlord photography. For one thing, it enabled inventor Thomas Edison to develop the first operation cypher camera in 1891, and by 1896 Kodak was marketing film specially cover for motion picture use.Prahalad and Hamel (1990) said, Resources that are valuable, rare or are in some form difficult to imitate form the core-competencies that enable an organisation to compete successfully.The knowledge-based view creates a new competence to the organization which is the ability to create and share knowledge which gives the organization a competitive advantage. throw believes that competencies are created from the incorporation of knowledge. However an important point has to be made, it does not matter how much valuable knowledge you have or how big-ticket(prenominal) your equipment is w orth if you do not know how to use your resources efficiently.As a common rule, competence-enhancing innovations are just as likely to develop from constituted firms as from outsiders. Competency-destroying innovations, however, almost always come from outsiders.The necessity to develop new competencies in anticipation of future developments is an important factor of long-term business success and George Eastman seems to have recognised this requirement which is one of the reasons why Eastman is also recognised as a successful innovator.Conclusion.The Eastman Kodak company was described as, an example of repeat strategic failure it was unable to grasp the future of digital quickly enough, and even when it did so, it was implemented too slowly under a continuous change strategy and ultimately it did not fit coherently as a core competency(Mendez,2005).It is amazing to think how Eastman became a world(prenominal) market leader instead of the Germans, as the Germans were the leader s in the intuition of optics, chemicals and design of cameras. However German products were usually expensive and produced in little(a) numbers whereas George Eastman struck a desirable balance between cost and quality. For example, Eastman quickly replaced his original Kodak camera with his No. 1 model because the motive shutter system was inherently costly to make. Eastman focused on his monetary and HR on an international mass market and large-scale production. There are some similarities with Eastman Kodak and Henry Ford who incorporated the Ford push back Company in 1903.A firm is said to have a competitive advantage when it is implementing a value creating strategy not at the same time being implemented by any current or electric potential competitors. (Barney, 1992102)When Thomas Edison asked Eastman to produce a special film for the newly invented motion picture camera, Eastman already had the competencies needed to develop it, he simply had to prolong and strengthen his strips of film and add holes to connect the movie cameras sprocket.The importance in the development of new competencies in anticipation of future developments is a vital factor of long-term business success.All of George Eastmans early attempts at colour photography failed, and these failures encouraged him to establish RD in the Eastman Kodak Research Laboratory.The idea of competency is essential to the survival of all firms as they encounter change. During the time it took for the regeneration of the Eastman Kodak company to transform into the market leader it is, many other successful companies disappeared in a time of technological change.The capabilities, competencies and resources of a company are the key factors that give a company the competitive advantages to enable them to be successful and gain market share. This has been apparent throughout the research taken on the Eastman Kodak company. However even with these capabilities, competencies and resources, no matter if you are a market leader or a small company notwithstanding breaking-even, if you do not use these competitive advantages efficiently and do not recognise the need for change your company is going to suffer just as the Eastman Kodak company did.Word count 2,281