Question#1:

According to you what could have been the reason for Kodak to move slowly in
response to the changing External Environment. (10 marks)

Answer:
Immensely successful companies can become myopic and product oriented
instead of focusing on consumers’ needs. Kodak’s story of failing has its roots
in its success, which made it resistant to change. Its insular corporate culture
believed that its strength was in its brand and marketing, and it
underestimated the threat of digital.

Culture of Complacency:
The main reason for Kodak to move slowly in response to the changing
external environment was the failure of Culture Change or the “Culture of
Complacency”. Kodak business was essentially destroyed by its culture as the
cultural change came too late.

Kodak did not fail because it missed the digital age. It actually invented the first
digital camera in 1975. However, instead of marketing the new technology, the
company held back for fear of hurting its lucrative film business, even after
digital products were reshaping the market.

Kodak was slow to change because its executives suffered from a mentality of
perfect products, rather than the high-tech mind-set of make it, launch it, fix it.
That suggests a culture that was poorly suited to the rapid pace of change in
external environment.

Kodak was known as the "Google" of its time with a strong reputation for
product innovation and enjoyed a near monopoly position in the key US
market.

Unfortunately, the company had the near sighted view that it was in the film
business instead of the story telling business, and it believed that it could
protect its massive share of market with its marketing. Kodak thought that its
new digital technology would cannibalize its film business.

Other reasons that contributed to the slow response of Kodak to the external
environment-
Wrong marketing strategy:
The blind faith in marketing’s ability to overcome the threat from the new
technology proved fatal. Kodak failed to adapt to a new marketplace and new
consumer attitudes.

Organizational Inertia:
Kodak management compromised its digital efforts because it wanted to
protect film business.

Poor Financial Management:

Kodak invented the technology but didn’t invest in it. Doing something and
doing the right thing are two different things. Kodak mismanaged its
investment in digital cameras, overshooting the market by trying to match
performance of traditional film rather than embrace the simplicity of digital.
Sassoon himself told that management’s response to his digital camera was
“that’s cute –but don’t tell anyone about it.”

Poor strategic decisions:

One common explanation about Kodak’s demise is that it missed the digital
revolution or simply that the ubiquity of digital cameras made photographic
film redundant while Kodak bosses buried their heads in the sand.

Question#2:
Giving justifications propose and explain a Management Principle that you
think can be used by organizations operating in fast changing business
environment?

Answer:
In this dynamic world, if there is any single word that can best describe today’s
business, it is change. This change makes the companies spend substantially on
Market Research to survive in the market.

Leading the Change

Organizations as they grow, develop complex structures with an increasing
need for co-ordination and control. To cope and manage such situations,
leadership is necessary to influence people to cooperate towards a common
goal and create a situation for collective response. Leading entails directing,
influencing, and motivating employees to perform essential tasks. It also
involves the social and informal sources of influence to inspire others. Effective
managers lead subordinates through motivation to progressively attain
organizational objectives. Personality research and study of job attitudes in
behavioural Science provides important insight on the need for coordination
and control. Thus, it becomes important for leadership to create harmony
among individual efforts to collectively work towards organizational goals.

Important Management Principle for organizations operating in fact changing

business environment:

Making sense of Changing Environment:

 Environmental Scanning
 Interpreting Environmental Factors
 Acting on threats & Opportunities

Importance of understanding Macro Environment:

The macro-environment refers to all forces that are part of the larger society
and affect the micro-environment. It includes concepts such as demography,
economy, natural forces, technology, politics, and culture. The purpose of
analysing the macro marketing environment is to understand the environment
better and to adapt to the social environment and change through the
marketing effort of the enterprise to achieve the goal of the enterprise
marketing. Factors affecting organization in Macro environment are Political,
Economical, Social, Technological, Environmental and Legal.

Importance of understanding Micro Environment:

Company aspect of micro-environment refers to the internal environment of
the company. This includes all Departmentalization departments such as
management, finance, research and development, purchasing, Business
operations and accounting. Each of these departments influences marketing
decisions. For example, research and development have input as to the
features a production performs and accounting approves the financial side of
marketing plans and budget in customer dissatisfaction. Marketing managers
must watch supply availability and other trends dealing with suppliers to
ensure that product will be delivered to customers in the time frame required
to maintain a strong customer relationship. Competitors are also a factor in the
micro-environment and include companies with similar offerings for goods and
services. To remain competitive a company must consider who their biggest
competitors are while considering its own size and position in the industry. The
company should develop a strategic advantage over their competitors.
Interpreting Environmental factors & Acting on Threats / Opportunities:
When scanning the environment, the organization needs to look at all the
influences of the company. The scanning process makes the organization
aware of what the business environment is about. It allows the organization to
adapt and learn from that environment. When the company responds to an
environmental scanning process it allows them to easily respond and react
to any changes to both the internal and external business environment.
Environmental scanning is a useful tool for strategic management as it helps
them to create and develop the aims and objectives of the company which
assists with the production of the company or organization. When looking at
the weaknesses of the organization's placing in the current business
environment a formal environmental scanning is used. Environmental scanning
process requires the identification of the needs and the issues that have
occurred that caused the organization to decide an environmental scanning is
required. Before starting the process there are several factors that need to be
considered which include the purpose of the scanning, who will be
participating in the processes and the amount of time and the resources that
will be allocated for the duration of the scanning process.

The next step of scanning process is gathering the information. All the needs of
the organization are translated into required pieces of information that will be
useful in the process.

The third steps analysing all the information that the business has collected.
When analysing the information, organizations are made aware of the trends
or issues that the organizations may be influenced by.

The step four of the environmental scanning process is all about the
communication of the results obtained in step three. The appropriate decision
makers analyse the translated information of the potential effects of the
organization. All the information is presented in a simple and concise format.

With all the information obtained from steps three and four, step five is all
about making informed decisions. Management creates appropriate steps that
will position the organization in the current business environment

Lead with the culture.

 Lou Gerstner, who as chief executive of IBM led one of the most successful
business transformations in history, said the most important lesson he learned
from the experience was that “culture is everything.”

Start at the top.

Although it’s important to engage employees at every level early on, all
successful change management initiatives start at the top, with a committed
and well-aligned group of executives strongly supported by the CEO.

Involve every layer.

Strategic planners often fail to take into account the extent to which midlevel
and frontline people can make or break a change initiative.

Make the rational and emotional case together.

Leaders will often make the case for major change n the sole basis of strategic
business objectives.

Act your way into new thinking.

Many change initiatives seem to assume that people will begin to shift their
behaviours once formal elements like directives and incentives have been put
in place.

Engage, engage, and engage.

Leaders often make the mistake of imagining that if they convey a strong
message of change at the start of an initiative, people will understand what to
do.

Lead outside the lines.

Change has the best chance of cascading through an organization when
everyone with authority and influence is involved.

Leverage formal solutions.

Persuading people to change their behaviour won’t suffice for transformation
unless formal elements — such as structure, reward systems, ways of
operating, training, and development — are redesigned to support them.
Many companies fall short in this area.

Leverage informal solutions.

Even when the formal elements needed for change are present, the
established culture can undermine them if people revert to long-held but
unconscious ways of behaving.

Assess and adapt.

The Strategy & Katzenbach Centre survey revealed that many organizations
involved in transformation efforts fail to measure their success before moving
on.

Question # 3
“Planning for a very long term as well as for a very short term can be equally problematic.”
Give opinion in favour or against the statement referring to the Kodak’s case?

Answer:
Planning for a very long term as well as for a very short term can be equally
problematic, for any organizations both are equally important and there
should be a balance between these two. Long term plans can be divided into
multiples short term plans. Long term plan can be implemented by
implementing short term plans. So, it is very important to be careful about
planning. Generally, many businesses develop strategies planning with a short
term, medium term and long-term frame work. Short term usually involves
processes that show result within a year. Companies aim medium term plan at
results that take several years to achieve. Long term plans include the overall
goals of the company set four to five years in future and usually based on
reaching the medium-term targets. Planning in this way help you to complete
short term task while keeping longer term goal in mind. Beyond the obvious,
knowing the differences between short- and long-term planning can help non-
profits navigate their paths from the present to the future with demonstrated
progress toward achieving their goals. Every board needs directors who are
great visionaries. Establishing and working toward specific short- and long-
term goals helps boards bring these visions to life.
Long-term goals are inherently strategic. This characteristic is why long-term
goals shape the overall direction of the organization. The success of achieving
long-term goals is a reflection of how well the board conforms to the organiza-
tion’s mission.
Strategic planning helps determine the direction and scope of an organisation
over the long term, matching its resources to its changing environment and, in
particular, its markets, customers and clients, so as to meet stakeholder
expectations.

Short-term goals are a reflection of how well the organization’s programs are
performing. Effective board directors know that it takes establishing, monitoring
and achieving short- and long-term goals to help the organization progress.
Short-term goals have an operational component, with action plans for the
immediate future. They also form the action plan for achieving each of the
long-term goals. Action plans usually contain daily or weekly activities.

Having an enterprise mindset that is open to change. Unless those at the top
are sufficiently open and willing to consider all options, the decision-making
process soon gets distorted. Unlike its founder, George Eastman, who twice
adopted disruptive photographic technology, Kodak’s management in the 80’s and 90’s
were unwilling to consider digital as a replacement for film. This limited them
to a fundamentally flawed path.

Thinking and acting holistically. Separating out and then optimizing different
functions usually reduces the effectiveness of the whole. In Kodak’s case,
management did a reasonable job of understanding how the parts of the enterprise
(including its photo finishing partners) interacted within the framework of the
existing technology. There was, however, little appreciation for the effort being
conducted in the Kodak Research Labs with digital technology.

Being able to adapt the business design to changing conditions. The right
design depends on the predictability of the market. Kodak’s unwillingness to
change its large and highly efficient ability to make-and-sell film in the face of
developing digital technologies lost it the chance to adopt an anticipate-and-
lead design that could have secured the it a leading position in digital image
processing.

Making decisions interactively using a variety of methods, This refers to the

ability to incorporate arrange of sophisticated decision support tools when
tackling complex business problems. Kodak had a very effect decision support
process in place but failed to use that information effectively.

Kodak made a classic mistake: it didn’t ask the right question. It focused on
selling more product, instead of the business that it was in, storytelling.

According to KODAK case,

Kodak concentrated more on short term plan that was well established,
market leading and making large profit, ignoring and neglecting in adopting
long term planning like accepting new technology and developing the future
product and investing research and development in cost cutting and investing
in continuous of the present product would have made Kodak still capturing
major share in the market of photography industry. Kodak where never ready
to think about the future in technology and relied happy with the way business
was doing in the present situation and they were busy in planning for short
term profit with the business model, they were running and thinking that no
other competitors can dominate and compete Kodak in photography industry,
Kodak never realized and thought of future of next 10 years would have
though doing SWOT analysis. SWOT generally refers to analyses the Strengths,
Weaknesses, Opportunities, and Threats

Conclusion
In order for a company to be successful in any industry, it must adapt to its
consumer tastes. The same applies in the photography industry, where
companies like Kodak must be able to evolve with new consumer preferences.
If a company does not offer the products and services that consumers demand
then there is a high probability that consumers will shop elsewhere.
In the photography field it is important that the products and services be not
only user friendly, but offers a variety of features and easily transferable data.
Some important features include zoom range, video recording, time between
taking pictures (on digital cameras), and memory card and the length of time
needed to transfer pictures. Companies in this industry must ensure that its
products appeal to long time photographers, and are easy to learn for those
who are new to the field.
In addition, price and customer awareness are important. Cameras must be
affordable, as consumers are becoming more and more price conscious. Also,
in an industry where the printing of photos is decreasing, it is imperative for
consumers to be made aware of the quality and affordability of professional
printing in order to maintain market share and profit. If consumers believe it is
expensive to print photos, they will be inclined not to print and store pictures
on a disk or print at home with a low quality printer.