Kodak Polaroid

                Case:   Kodak Polaroid

Executive summary

The following is used to analyze two successful companies who were competing in a relatively closed and emerging market.  We will go in-depth on the original position of both companies before entering the market, the effects on both companies when there were threats of competition, the reactions to eliminate the competition, and, finally, the recommendation on how they both can survive this attractive market without eliminating one another.  

Players in the instant camera market

1.         Incumbent:     Polaroid Corporation (“Polaroid”)

        Polaroid never made any significant financial investment on their asset. It usually leased plants and equipment and also subcontracted to others for camera manufactures, which all of them were purchased under long-term contracts for negative material.  However, Polaroid was a leadership in instant photographic field.

2.         Entering:     Eastman Kodak Company (“Kodak”)

        Kodak was an integrated photographic firm in a film and camera industry since it had its own manufacturing facilities, so that it can control the quality of sources.  Its products’s specifically were films and cameras.  Kodak dominated the market in 1976, and its market shares were 91 percent for film and 85 percent for cameras.

Analysis

For the purpose of this study in relation to the industrial structure and strategy formulation, we will analyze this case by focusing only on the strategy the players used during entry episode and the strategy they used in response.

The Entry Episode

Pre-entry situation

Polaroid’s major strategic Policies:

 •        Preserve capital investment; rented or leased plants and equipment, camera manufacturing subcontracted, negative material purchased under long-term agreements from Kodak.

•        Direct consumer advertising (not via dealers), No channel marketing with dealers and distributors, Direct sales to large retailers, No incentives in channel marketing.

•        High turnover in sales staff (staff as an order-taker).

•        Product Innovation and sudden introductions.

•        Extensive built up of intellectual property right and patent protection.

•        No diversification.

In 1969, Polaroid has strategic shift as it had raised significant fund for research, development, and manufacture of a totally new instant color film and camera system.  It formed the absolute one-step photography by integrating its own manufacture (manufacturing plants, camera assembly plant, chemical product facilities and film packaging operation).  Later, in 1972 Polaroid launched its SX-70 cameras and film.  Although Polaroid was the leader in the instant camera market, it had difficulties due to the following: