Competitve Environment

To withstand the continuing onslaught by Fuji, Kodak intends to cut another 12,300 jobs and reduce cost by another $1 Billion. Kodak understands that cost reductions will carry the firm only so far. However, Kodak stays committed to growing its digital imaging business and feels increased revenues will be the result of this commitment. To make it there, Kodak will have to sell consumers on digital imaging and digitization. In emphasizing digital, Kodak has been criticized for not paying enough attention to such basic problems in its core camera and film businesses. This is illustrated by KodakÐŽ¦s slow response to FujiÐŽ¦s pricing pressure in 1997. Here, Kodak allowed a 30 percent price differential to occur between them and Fuji. As a result, Kodak had to lower prices, eliminate less-profitable product items, and make price promotion offers. However, it now appears that Kodak has realized that it cannot lose sight of Fuji. Therefore, Kodak is planning to initiate a new aggressive marketing program in the United States. Kodak now understands to make its digital imaging program succeed, they must attract the millions of households using traditional photography. In doing so, they must move into the next frontier of photography and refocus on their meaning and mission.

CURRENT HISTORY AND TRENDS Provide here is an overview KodakÐŽ¦s Mission Statement, Vision, Values, and Pertinent Financial information. „h KodakÐŽ¦s Mission Statement, Vision, and Values Mission Statement Build a world-class, results-oriented culture...by providing customers and consumers with solutions to capture, store, process, output and communicate images to people and machines anywhere, anytime... bringing differentiated, cost-effective solutions... to the marketplace quickly and with flawless quality through a diverse team of energetic employees with the world-class talent and skills necessary to sustain Kodak as the World Leader in Imaging. Vision Our heritage has been and our future is to be the World Leader in Imaging. Values Respect for the Dignity of the Individual Integrity Trust Credibility Continuous Improvement and Personal Renewal Recognition and Celebration „h KodakÐŽ¦s Financial Position -Financial Strength Company Industry Quick Ratio (MRQ) 0.50 0.62 Current Ratio (MRQ) 0.98 1.12 LT Debt to Equity (MRQ) 0.28 0.31 Total Debt to Equity (MRQ) 0.78 0.79 -Profitability Ratios (%) Company Industry Gross Margin (TTM) 44.28 44.07 Gross Margin - 5 Yr. Avg. 45.75 45.55 Net Profit Margin (TTM) 10.05* 9.21 Net Profit Margin - 5 Yr. Avg. 6.96 6.21 Return On Investment (TTM) 16.29* 15.84 Return On Investment -5 Yr. Avg. 10.39 10.93 Inventory Turnover (TTM) 4.70 4.64 „h KodakÐŽ¦s Stock Trends The above graft represents KodakÐŽ¦s (EK) stock performance as compared to the S&P and DJ industry averages STRATEGIC POSITION As a result of reviewing and researching the Kodak case, Team Commander feels that KodakÐŽ¦s current organizational structure, company mission, vision, values, and financial position are adequate and are not playing a significant role in the companies inability to grow its digital products. However, it does appear KodakÐŽ¦s Marketing Department is failing in its attempt to market digital products. This is exampled by the following issues: 1) the slow sales growth in KodakÐŽ¦s digital camera market; 2) continued revenue losses in the Digital Imaging Division; and 3) KodakÐŽ¦s failure to maintain focus on its core products. Provided below are explanations as to why the issues were identified. Issue #1- The slow sale growth in KodakÐŽ¦s