companies began turning to new technologies. Digital photography became the new battleground for marketshare. In this arena, Polaroid faced stiff competition from several "deep-pocket" technology companies as Xerox, 3M, and Sony.Polaroid's Relative Strengths and WeaknessesPolaroid's innovation, determination and focus enabled the company to not only create the instant film camera industry, but also dominate it by continually building upon their technology. Unfortunately, the company's narrow focus on instant film photography may have been responsible for the company's late entry into the digital camera market. Likewise the company's efforts to develop instant motion picture film in the late 1970s proved to be misdirected as video camera technology took hold in the market. [bbb, brand equity, distribution network, technological expertise]GOALS OF THE FIRMFirm's StrategyRecently appointed CEO, Gary T. DiCamillo set forth a new plan to galvanize the company's financial performance in light of its lagging share price. His goal was to cut expenses and grow the company's core photographic and emerging electronic imaging business. Functional PoliciesDiCamillo began restructuring the company to reduce expenses by more than $150 million. He reduced the workforce by 2,500 positions and terminated projects with lower potential for commercialization such as the Captiva camera. DiCamillo also reorganized the management structure around three core areas: commercial, consumer and new business in an effort to more effectively focus on customer's imaging needs. The company's new market strategy centered on aggressively exploiting the Polaroid brand, introducing product extensions, and entering new emerging markets.In order to finance its new strategy, Polaroid maintained a five-year $150 million working capital line of credit. The company sought to lower their cost of capital by taking advantage of the tax shields debt provided. Yet they also wanted to...
