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Eastman Kodak

Essay by   •  March 23, 2011  •  Research Paper  •  1,031 Words (5 Pages)  •  1,755 Views

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EXTERNAL ENVIRONMENT

A. Societal Environment

Economy

* Economic influence of 9-11 (T)

* Theme parks, lodging, advertising, entertainment down (T)

* U.S. economic downturn (T)

* Less disposable income (T)

* Consumers dropped brands for private labels (T)

* Advertising decrease = lower film sales

* Strong U.S. dollar (T)

* Exchange rates neg. impact sales & profits (O/T)

* Gradual return to previous spending habits (O)

2. Technology

* Developing/emerging markets continue to use film (O)

* Change to digital imaging (O/T)

* Digital substitution more rapid in Japan (T/O)

* Demand for digital cameras increasing (O/T)

* 62% believe innovation/digital processing key to growth (O)

* 76% believe digital difficult to use (O)

* Not all consumers comfortable with downloading and printing on their own(T)

* Getting good prints from digital confusing, complicated, expensive (T)

* Info-imaging increase 9-10% in 2001 (O/T)

* Info-imaging $768B by 2010 (O)

* Trend to converge image & information technology (O)

* Improving infrastructure of internet (O)

* Rapid transfer of files(O)

* Internet appliances (O)

* Growth of broadband and wireless capacity (O)

* Development of digital storage technology (O)

* PIMA establishes picture transfer protocol (O)

* Pictures now down-loaded and printed immediately (T)

* Inkjet printers improved image quality (T)

* CPX standardized languages to relay picture data (O)

* PC software companies control consumer access to photos (T)

* Photo retailers going to digital mini-labs (O)

* Internet photo finishing with personalized service (O)

3. Political-Legal

* Strikes in entertainment industry (T)

* Movie film sales (O)

* E.P.A. (T)

* Designated as Partially Responsible Party

* New York Corrective Action Program

* Clean Air Act

* Department of Justice (T)

* Legal actions from violations

* Protection of intellectual property (T)

* Enforcement of licensing agreements (T)

* Implementation of EURO (O & T)

* Downward price pressures (no price variations)

* Reduces exchange/hedging costs

* Expand European mail order & e-commerce

* Value Added Taxes (O & T)

* Foreign Income taxes (T)

1. Socio-Cultural

* Digital increases overall interest in photography (T & O)

* Gen X entering family formation years (O)

* 45mm; 17% of population

* Lack brand loyalty: like trendy, sleek, state of art

* Gen Y (O)

* Adept at internet

* Lack brand loyalty: like trendy, sleek, state of art

* 41 million in U.S. population 50-59 years of age(boomers) by 2010(O)

* Leisure spending

* Echo boom (O)

* 71 mm; 25% of population

B. Task Environment

1. Threat of new entrants: MEDIUM

* Intense competition (mature)

* Few competitors in film

* Fuji - strong in digital development

* High capital commitment

* Brand recognition of current players

* All global players

* Requires high R & D investment

* Health market is seeing new competition

2. Bargaining power of buyers: HIGH

* Intense competition

* Prices in segment being driven down

* Spending on film is disappearing

* Shrinking distribution channels

* K-Mart collapse, conservative ordering patterns

* Shift to mass merchants

* Consumers demand 24/7 availability

* Profit margins for film developers is dropping

* Consolidation of group purchasing organizations

3. Threat of substitute products: HIGH

* No one company has more than 6% share of info-imaging

* Consumers adapting well to digital cameras

* Sony, Canon, Olympus, Nikon.

* Prices on digital cameras dropping

* Grow to 20mm units by 2004

* Digital penetrated 15% of households

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