Kodak External Analysis

INTRODUCTION Even though Eastman Kodak is the leader in digital camera sales, all is not well. Film has always been a high-margin product for Kodak but as this part of the business is rapidly shrinking it's time to look to new products and markets. For the first quarter of 2005, Eastman Kodak reported a $142 million loss. While it may appear Kodak is in dire straights, they are taking actions to establish themselves in the digital printing market. With the leadership of new CEO, Antonio M. Perez, Eastman Kodak is ready to forge ahead to once again become an industry leader. Are they on track to meet their vision? By analyzing the current environment including the macro environment and evaluating how they have managed their environment, then identifying threats and opportunities in the environment and comparing and contrasting that information with its competitors, it will show they are on track to become a major player in the digital printing market. In addition, based on the analysis, recommendations will be made on how they can insure they stay on track. ENVIRONMENT ANALYSIS This environment analysis will be accomplished using Porter's Five Forces Model. The model is an "outside-in business unit strategy tool that is used to make an analysis of the attractiveness (value) of an industry structure." (www.12manage.com 2007) The five forces that are examined are entry of competitors, threat of substitutes, bargaining power of buyers, bargaining power of suppliers, and rivalry among existing players. The entry of competitors is always an issue when dealing with new technology. Often, new technology is developed by an individual looking for a better way to do something. The problem for these individuals is being able to become a viable player due to limited capital and positioning to enter the market. While developing their own new technology, Eastman Kodak must remain alert to new technology being developed elsewhere that they

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