波特五力模型分析柯达公司

Introduction

There was a great company named Kodak, which has gradually disappeared in our sight since the year 2012 it has filed for bankruptcy protection. This reminds us that there is not any brand or company can remain being succeeded forever. What is certain is that there must be some important factors hidden behind that were leading the enormous empire to failure. This report will discuss the factors that are affecting the rise or decline of a technology.

Porter ’s five forces model

To fulfill this goal, it is necessary to introduce the Porter ’s Five Forces Model, a simplified model used for analyzing the competitive situation in certain industry for developing strategy. It shows the main five sources of competition, which is the bargaining power of both the suppliers and the buyers, the threat of new entrants and substitutes, and rivalry among existing firms. Proposal of any feasible strategy should be based on the identification and analysis of the model. To briefly explain is that for one enterprise, if the higher the price of the supplier offers with, the lower the price of the buyer gets the products or services, the more the amounts of new members coming into the field, the more the replacing products there are, the more the extent of the competition among the same industry will be. It is considered to be more like a theoretical tool rather than an actual operational tool. This is because the formation of the model is based on three conditions: for a certain industry, the strategy maker needs to know all the information about it, which is the first impossibility in the reality; followed by the assumption that there is only competition but no cooperation between different companies in the same industry which is also impossible because different enterprises do have variety of cooperative relations instead of competitive relations only. What comes last is that it assumes that the size of one certain industry is limited. In fact, for all enterprises, there is not only to swollen rivals to grow but also can work with rivals to create a bigger profit together in the market.

The Five Forces Model Analysis of Kodak (including discussion)

Firstly, the stronger the bargaining power of suppliers of Kodak has, the more competitive situation would Kodak be facing in the market. The cost goes high directly leads to the increase of the prices of products. For the suppliers, they are not only supplying only one enterprise, not any single enterprise would become an important customer for them. For Kodak, such a big company can never afford

that if the producing line is broke down due to the increasing cost, so the only choice for Kodak is to improve the selling prices.

● Secondly, the bargaining power of buyers is also a big threat. It is obvious that if

customers are able to get the same product in a cheaper price, it will encourage all customers to bargain. In most developed countries, this is well solved because the prices of the cameras or computers in famous brands are the same in different areas. However, Kodak is not only a domestic enterprise. In most Asia countries, it is very common to see that even for the same product will have different prices in different areas, consumers are spending their money in a very efficient way, that is to say they are getting with the lowest price they can reach. This makes a huge loss for Kodak because of the distribution of the population is not that average for the largest population is in Asia, where the biggest market located.

● Thirdly, the threat of new entrants is also a big part of the consideration. The

industry of cameras hardly has either financial obstacles or legal barriers. This creates a perfect environment for the invaders, which means to some successful enterprises to get involved. As well as the growth of the tourist industry, the need of cameras is growing in a terrible pace, after all at that time smart phones were not that popular as now. The most important factor for there being so many entrants in camera industry is that the core technology is never a secret but can be bought easily. This makes invasion easier for new entrants if they have enough money. Overall, the potential invaders in the industry of cameras are quite a lot.

● Fourthly, the threat of substitutes affects Kodak a lot. As time flies by, more and

more products can take the place of cameras. One good example is mobile phone, some of which with the major function of taking photos. Actually, the industry of mobile phones and cameras are in two different fields, but once mobile phones can replace cameras, there will be an extreme competition between the enterprises. This also can be a cause of the phenomenon that most successful enterprises are involved in several industries.

● Lastly comes to the rivalry among existing firms. During the years that Kodak

experienced, the amount of cameras was largely increased, but no longer concentrated in one or two brands. Variety of brands of cameras were benefiting from the market. For Kodak, it had to compete with not only international enterprises like itself, but also have to compete with more and more local enterprises in different countries, and as digital cameras are popularized, local enterprises definitely have more advantages than an international enterprise like Kodak, at least the cost for them is much lower than Kodak. What is more, consumers are desiring more function, which leads to the popularity of single lens reflex cameras.

Conclusion

Kodak is definitely a successful brand, since the case of Kodak is still being studied by thousands of people. However, from the analysis above it seems that the failure is also inevitable. Kodak is too focus on what makes it successful, the film industry, to innovate itself as the improvement of technology is pushing forward in a terrible pace. It had made great strategy to build up Kodak, but the decision maker didn’t figure out clearly that what situation they were in and what rivals they were facing. The best film can not defeat the digital technology in the market, even if customers only consider the differences between the two products in convenience. Technology is an important standard to judge whether a company can survive or not.

Reference

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