Conventional v Digital Cameras
- Identify and explain how we might we evaluate and select strategies i.e. substantive growth, limited or retrenchment
Strategy selection and evaluation are parts of a business planning process. Strategy should be formulated considering the strengths, weaknesses, opportunities, and threats relevant for achieving specified business objectives. The latter are best stated after a review of the environment in which an enterprise operates. Strategy should leverage company strengths to exploit identified opportunities. Strategy should also protect a company from threats that arise either from the market environment or from internal weaknesses.
Strategy evaluation revolves around sustainable competitive advantage that a business is able to garner. Successful strategy will enable an enterprise to achieve its profit, growth, and image objectives. Declining market share and productivity are signs of strategic errors, though they may also arise because appropriate strategy has not been effectively implemented.
Technological changes and indirect competition from other digital devices and networks have buffeted the market for cameras. Strategies for companies such as Canon and Kodak should enable them to retain their shares in and cash flows from the business of cameras retailed to consumers (Ohmae, 1991).
Both companies have substantial industrial applications for their products and technologies, but the drivers of the medical and other technical markets are so different from consumer markets, that brand owners should not attempt to club the two sectors together. One may call for growth, while the other requires retrenchment. Companies such as Canon and Kodak cannot adopt a uniform strategy for their entire portfolio of revenue lines. We are concerned with the high growth potential of digital consumer cameras.
1.2 Describe the resource issues that canon would need to consider when implementing new strategies.
Internal Marketing elements of Services Marketing (Payne, 2002) will help Canon transit from a technology led company to the realm of consumer focus. The company cannot hope to use proprietary manufacturing expertise of the past for sustained growth and profits in the 21st century. Digital technologies tend to be egalitarian; they will be quickly copied by international competition.
Canon cannot hope to compete based on tangible product features in the market for cameras used by amateur photographers. It has to confront the issue of its brand share in the retail market being less than its position as a hardware manufacturer. Canon must recruit new people or retrain existing employees to excel in interactive marketing. It has to pay attention to the process element of its marketing mix, so that it can remain in touch with changing consumer needs and respond to new demands and requirements.
Canon appears to be aware of this need (Web View World, 2005). It has made an admirable shift from merely showing its products, to offering a consumer-friendly website rich with service features. However, Canon still needs the cross-cultural skills to appeal to a global audience. Parts of the website seem tuned to a Japanese audience. It would be useful to provide links to separate pages for important countries. Canon has to find a balance between attention to local and regional needs in each market, even as it tries to retain the uniformity and discipline of a global brand. Nevertheless, the site does have Interactive Marketing capability and demonstrates Canon’s resolve to develop a Service Mission (Payne, 2002).
Canon appears to have written-off the conventional camera business entirely for its consumer business. Industry reports (Germany and U. K. biggest digital camera markets) show that all consumers in all countries are steadily moving away from conventional cameras.
1.3 Recommend an appropriate future strategy for Kodak
Kodak has used proprietary technology for photographic film to conduct business since the end of the 19th century. It has held a dominant market share for most of this time, and has fought bitter battles with rivals to protect its expertise. I recommend that it should upgrade its technology for the digital age, and continue with the basic template of success that has withstood the test of time.
Kodak has an exclusive arrangement with Kodak to send pictures quicker over the Internet (Kadiali, 1998, 105). A random survey of retail outlets and mainstream media shows that Kodak uses this technical advantage for its branding in the digital age. The conventional camera business was always subservient to Kodak’s central strength in film: it has the same approach, as Canon as far as the consumer market is concerned-there, is no effort to sustain the conventional camera niche.
I recommend that Kodak should continue to build on its business relationship with Microsoft, and offer upgrades for customers to use digital cameras better. This will help Microsoft as well as it competes with google and overture for dominance of the e commerce sector. The enormous popularity with web logs shows that there is tremendous scope for helping people record, store, and transmit multi-media communication. Kodak needs exclusive access to a product such as Picassa.
Electronic Paper Displays (2005) hold great promise for a company such as Kodak. This will stretch Kodak’s traditional strength in film in to the digital future. Kodak should also look at the possibility of owning subterranean cable networks, satellite capacity and ground networks for exclusive and high-speed bandwidth. Overall, Kodak’s strategy should be to protect its share by ownership of technology and networks that give it an unbreakable edge over its old rivals such as Canon and other Japanese companies.
1.4 Compare the roles and responsibilities for implementing strategies in both Canon and Kodak.
Canon and Kodak personnel cannot have the same roles and responsibilities, since the strategies I have recommended for each of them differs. Canon has to excel in marketing and consumer service, while Kodak has to hold a technological edge. Canon needs a professional marketing team that is able to enhance the brand well beyond tangible product features. It must do this by combining local cultural inputs in each country market with the frame of an effective global strategy.
Market research, customer decision-making, segmentation, and targeting and mass communications are some of the skills, which it requires. Canon’s role should be to brand generic digital and optical technology with appropriate service elements. Its employees should be the first to spot changes in consumer trends and help the company respond in time. Canon’s success will lie in continuous innovation, not just in terms of products, but more in terms of value-added services for emerging customer segments.
Kodak, on the other hand, must search for proprietary technology, and keep new distribution channels under control. It should ally with Information Technology companies and try to own fast communication channels for image and audio transfer. The company has a rare collection of accumulated knowledge about the patent and commercial contract process; it should use these strengths as levers to compete for future markets.
It may also succeed in adapting its hereditary abilities in Research and Development to the new digital and multi-media possibilities. Finally, Kodak should examine horizontal diversification, using the resources of its industrial business to help people communicate with each other over long distances. It has a head start in terms of making it easy for people to shoot, send and file professional-quality photographs and video.
1.5 Identify and compare the resource requirements required to implement the strategy you have suggested in 1.3
Consumer insights and distribution strengths are the key resources Canon needs for its recommended strategy. Both of these can be put together in terms of Strategic Marketing Channel Management. Consumers should have preferential access to Canon’s products, and the company should be best at understanding consumer behavior at points of purchase. It bears repetition that Canon needs liberal doses of local expertise in key geographical markets: consumers in India and China will not behave and respond in the same way as in the US and Europe. Canon needs Service Specialist Leadership (Bowersox and Cooper, 1992).
Technology and financial resources for acquisitions will determine Kodak’s ability to implement the recommended strategy. It must wait with substantial and liquid resources to acquire companies with synergistic technology. It may have to put large sums at the disposal of its own engineers, in the hope that they can deliver proprietary and valuable expertise. Horizontal diversification in to sectors such as telecommunications will need financial institution support, so Kodak should take extra care with its credit history, business margins, control systems, and business planning ability.
Banks and investors will look for sound systems in these areas when the time comes for Kodak to seek help for a major strategic move. Kodak also needs the skills related to corporate negotiations. This would come from a legal firm with international experience and with a relevant record of accomplishment. Technology appraisal capability and networking in merchant banking circles will be other useful resources, as Kodak plans to extend its glorious past in to the challenging future.
- How could we monitor, review, and evaluate the effectiveness of our strategies and what sort of targets and timescales would you propose.
Control procedures will be similar for both Canon and Kodak, though they have distinct strategic approaches to the market. The first steps are to prepare rolling 5-year plans and 12-month budgets. These documents should translate strategies in to financial goals and short-term targets. The financial goals should also find prominent places in key tasks of personnel. These planning steps serve to blend strategy in to individual and teamwork routines.
It is normal for managements to review quarterly business performance in detail. This is often a statutory requirement in any case. Exceptions to major trends should not wait for quarter ends: companies normally use monthly exception report for this purpose. The annual update of the 5-year plan is a key event to review strategy implementation. Missed milestones should ring alarm bells. They may require fresh strategy formulation.
Evaluation is universally based on achievements against specified objectives. The latter are normally in terms of brand ranks, market shares, volume growth, and absolute returns and on the basis of net profits as a proportion of average net capital employed. Image, as measured by market surveys and recall levels, is an important non-financial objective. Canon and Kodak can benchmark their achievements across countries and compare them with similar yardsticks in their industrial businesses. They should also measure themselves against business performance in other digital and entertainment sectors. Past performance is another basis for evaluating the effectiveness of current strategies.
Bowersox, D. and Cooper, M. Strategic Marketing Channel Management, McGraw-Hill (1992)
Kadiali, V, Eastman Kodak in the Photographic Film Industry, Market Dominance: How Firms Gain, Hold or Lose it and the Impact on Economic Performance, edited by Rosenbaum, D. I, Praeger/Greenwood, (1998), accessed November 2005, available from:
Ohmae, K, Getting Back to Strategy, Strategy, Seeking, and Securing Competitive Advantage, edited by Montgomery, C, A, and Porter, M. E, (1991), Harvard Business Book Series.
Electronic Paper Displays, E Ink, (2005), accessed November 2005, available from:
Germany and U. K. biggest digital camera markets, Lets go digital (2005), accessed November 2005, available from < http://www.letsgodigital.org/en/news/articles/story_3296.html>
Web View World,
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