South-Western - Management  
Kodak Announces Milestones in Implementing Growth Strategy
Topic Strategy
Key Words Emerging markets, growth strategy, competitive position
InfoTrac Reference A112454427
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News Story

Eastman Kodak Company announced a digitally-oriented strategy to accelerate earnings growth. In pursuit of this goal, it has achieved the following:

1.  strong revenue growth across several digital markets, including digital cameras, computed radiography and digital radiography.
2.  acquisition of PracticeWorks, a leader in digital dental imaging, and Scitex Digital Printing, a leader in high-speed, variable-data inkjet printing.
3.  planned investment in Lucky Film Co. Ltd.

Kodak expects to generate sufficient cash flow in 2004 to pay down debt in addition to continuing investment in the company's strategy.

Kodak will be allocating more resources towards digital businesses, which are characterized by faster growth, tighter profit margins, more aggressive pricing, and swifter product turnover that its traditional business of film and printed output.

In addition, Kodak plans to gain savings by consolidating operations, reducing facility square footage by about one-third, and reducing worldwide employment by about 20 percent. This will be done over a three-year period.

Kodak is the number 1 provider of online photofinishing services through its Ofoto subsidiary, the number 1 seller of photo kiosks found at retailers worldwide, tied for the leading share in the U.S. for photo-quality inkjet paper, the leader in medical laser printers, and the leader in sales of high-speed document scanners.

By 2006, the company expects to spend about 78% of its research and development resources on digital equipment, compared to about 66% currently.

Questions
1.

How is Kodak changing its strategic vision? Give specific examples.

2.

What is Kodak doing to enhance its position in emerging markets?

3.

How does Kodak plan to fund its investment in digital R&D?

4.

In your opinion, what are Kodak's core competencies?

Source "Kodak Announces Milestones in Implementing Growth Strategy; Company Plans Three-Year Program to Enhance Competitive Position," M2 Presswire Jan. 22, 2004.
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