As defined in chapter two of Introduction to Strategic Management, 'Indeed, innovation is frequently the major factor in industry evolution and causes the movement through the industry life cycle' (58). Because of the innovation of digital technologies, Kodak and other companies in the photography industry now resemble a growth industry more than one that has matured.
Forces that determine industry competition often include both opportunities and threats. With respect to Eastman Kodak, the following opportunities and threats provide the company with target areas for strategy to gain competitive advantage:
Fully invest in digital products Vulnerable to new competitors
Continue new product launches Questionable risk management
Acquisitions in focus areas Photographic film decline
The Kodak corporate strategy revolves around its creation of a diverse revenue stream. The company has recently realigned its operating and management teams in order to aggressively target the digital market. To gain additional leverage in the industry, the company continues to form joint ventures and partnerships in the digital market. Opportunities for the company abound in the growing digital photography market, including digital photo finishing and new product launches. Wireless imaging is another opportunistic market for Kodak. Despite these opportunities, Kodak faces threats from a marketplace open to new competitors, like Canon, Fuji, Agfa, Konica and Sony. Risk management suffers from foreign exchange rates no favorable to the company (SWOT 8).
Michael Porter maintains that 'Competitive strategy is the search for a favorable competitive position in an industry [and] aims to establish a profitable and sustainable position against the forces that determine in