Eastman Kodak Company Case Study
Eastman Kodak Company: Funtime Film
1. Diagnose the reasons for Kodak’s market share loss and make your assessment of the likely development of the market if Kodak maintained the status quo.
Kodak has been losing market share for the past five years to the point it has gone from 76% to 70%. The underlying causes that have generated such losses and have ultimately led consumers to favor competing brands with larger growth are:
I. Consumers are tending to view film as a commodity, often buying on price alone. Half of the picture takers claim they know little or nothing about photography. II. Quality differences among films are unclear. Superpremium, Premium, Economy and Price brands showed no real quality difference amongst each other between consumers. As a matter of fact, they perceived a Price Brand as the better quality film. III. Kodak does not compete in the lower tier segments: Economy and Price Brands, and has no real offer towards consumers.
The combination of these three factors has led Kodak to lose ground versus their immediate competitors and consequently a decrease in market share.
If Kodak maintained the status quo, a comparative sales analysis from 1992 to 1994 demonstrates that Kodak would continue to lose market share while its growth rate would also decline.
In 1988, market share and unit sales of Kodak were as follows, 1988 | Kodak | Market Share | 76% | Sales Unit | 461.1981284 |
If the other players in the market maintain their growth rate in 1994, Kodak’s market share would drop to 69.2% and growth rate would drop to 0.86%. 1993 | Kodak | Fuji | Polaroid | Private Label | Others | Market | Growth Rate | 3% | 15% | 15% | 10% | -37.06% | 2% | Market Share | 70% | 11% | 4% | 10% | 5% | 100% | Sales Unit | 469 | 73.7 | 26.8 | 67 | 33.5 | 670 | | | | | | | | Sales Unit(1992) | 455.3 | 64.1 | 23.3 | 60.9 | 53.2 | 656.9 | Market Share | 69.32% | 9.76% | 3.55% | 9.27% | 8.10% | 100.00% |
1. Diagnose the reasons for Kodak’s market share loss and make your assessment of the likely development of the market if Kodak maintained the status quo.
Kodak has been losing market share for the past five years to the point it has gone from 76% to 70%. The underlying causes that have generated such losses and have ultimately led consumers to favor competing brands with larger growth are:
I. Consumers are tending to view film as a commodity, often buying on price alone. Half of the picture takers claim they know little or nothing about photography. II. Quality differences among films are unclear. Superpremium, Premium, Economy and Price brands showed no real quality difference amongst each other between consumers. As a matter of fact, they perceived a Price Brand as the better quality film. III. Kodak does not compete in the lower tier segments: Economy and Price Brands, and has no real offer towards consumers.
The combination of these three factors has led Kodak to lose ground versus their immediate competitors and consequently a decrease in market share.
If Kodak maintained the status quo, a comparative sales analysis from 1992 to 1994 demonstrates that Kodak would continue to lose market share while its growth rate would also decline.
In 1988, market share and unit sales of Kodak were as follows, 1988 | Kodak | Market Share | 76% | Sales Unit | 461.1981284 |
If the other players in the market maintain their growth rate in 1994, Kodak’s market share would drop to 69.2% and growth rate would drop to 0.86%. 1993 | Kodak | Fuji | Polaroid | Private Label | Others | Market | Growth Rate | 3% | 15% | 15% | 10% | -37.06% | 2% | Market Share | 70% | 11% | 4% | 10% | 5% | 100% | Sales Unit | 469 | 73.7 | 26.8 | 67 | 33.5 | 670 | | | | | | | | Sales Unit(1992) | 455.3 | 64.1 | 23.3 | 60.9 | 53.2 | 656.9 | Market Share | 69.32% | 9.76% | 3.55% | 9.27% | 8.10% | 100.00% |