The purpose of this essay is to assess the balance of planned and emergent approaches that Eastman Kodak applied to strategic management in the digital challenge which Kodak uniquely developed and patented many of the components of digital photography(Henry et al, 2009).
The four main parts of the essay focuses upon classification Kodak’s case study into theories of intended strategy development, emergent strategy development, the roles of managers to manage this two strategic approaches and the evaluation of balance between these approaches in term of paradox and business environment.
Beginning with its intended strategy, the essay will state the process of strategy development which is associated with role of vision and command or objective setting, planning systems and imposed strategy that imposes by external factors. Later, the demand of strategy emergent, the logical incrementalism and resources allocation of this company will be described. Then, roles of managers to balance intended plans and incremental plans along with dealing to the uncertain and complex conditions will be clarified.
The last analysis will assess the balance of this two approaches by outlining a theory of the paradox of deliberateness and emergent for businesses in high competitive and technology-based environment. For planned strategy, Bob & Ron(2010a) gives an opinion that the objective setting comes before the first formal step of the strategy development process and Gerry et al(2008) expresses intended strategy as a formulation of the role of vision and command, planning system and externally imposed strategy.
Kodak’s objective or top management’s vision and command under Perez’s administration is still the same as his predecessors, that is the transformation from a photographic company into a world leader in digital imaging which based upon technology that allow consumers to find, share and show images on various media and reduction in role of a digital imaging hardware manufacturer.
By reaching its goal, Kodak set up a large number of retail photo kiosks and launched digital photography service that make it become a leader in retail market for printing digital photograph. As well as, it is a leader in high-resolution, colour printing systems in commercial printing and in digital dental imaging in healthcare sector. The imposed situations in which Kodak face were the new imaging technologies that were emerging such as Polaroid, electrostatic plain-paper copying and new printing technologies.
Therefore, a new strategic direction was imposed by acquiring a series of diversification moves into healthcare and imaginative initiatives such as first megapixel electronic image sensor, image storage and retrieval system, data storage product, copier services business and Photo CD system. These aspects of the intended strategy will be compared to the emergent strategy which will be stated after this. Bob & Ron(2010a) states that people reroute their plan along the way to slowly shape a process of thinking and doing.
For the aspects of emergent strategy development, Gerry et al(2008) considers logical incrementalism and resources allocation processes to be an account for it. The expansion of Kodak to any area outside its traditional imaging business seemed to have not sufficient assurance so it turned to focus on the digital challenge by spinning off chemical business and selling healthcare one whereas creating coherence among digital imaging projects. Robert, M. G. (2005) analyses this hange as refocusing on imaging and these divestments enabled Kodak to focus all of its resources on its core imaging business. As evidences of Kodak’s ambition, its first self-service facility for converting images from conventional photographs to digital ones was installed, followed by Picture Maker, a self –service kiosk for editing and printing digital images from a variety of digital and conventional inputs. Kodak intended to add value of consumers’ images while create a profitable consumable business for itself.
Kodak’s hybrid approach was the launch of its Advantix which allow both chemical film images and electronic data to be stored on a single film but this failed to make the market. Furthermore, Kodak offered a wide range of digital cameras from the top end to the bottom end despite there was a highly competition in this market. For the term of resources allocation, Kodak initially based on vertical integration and self-sufficiency, it has own technology, products and vast global network.
However, for digital imaging, the pace of technological change was too fast to rely on in-house development that forced it to look outside for the particular knowledge. Kodak launched a major hiring campaign to gain the executives and technical specialists and created a net of joint ventures and various strategic alliances, for example Intel, Hewlett-Packard, Microsoft and Sanyo. These companies obsessed diverse arrays of resources and capabilities with strengths and weaknesses in different areas.
Robert & Charles(2004) have viewed technology management as engagement of the wider field of knowledge management that causes strategic alliances to share their knowledge, technology, know-how and organizational capability. Subsequently to emergent strategy development, the capability to manage the two strategy development process will be declared. CEO of Kodak, Antonio Perez, responses to company’ s goals to transform from conventional photography to digital photography by reallocation of resources for example, cutting 25,000 employees and two-third Manufacturing capacity to stop its loss.
When its planned strategy to become a leader in digital images by trying to launch all of related range of products and expand to business which be outside its core provided too little commitment, it gave rise of an incremental approach by creating coherence among its digital imaging projects. Kodak could utilize its brand strength and huge distribution system to offer hybrid solutions, while using the time and its cash flow from film to invest in the resources and capabilities for digital imaging.
The challenge of renewing Kodak’s resource and capability base was not only limited to technology but also embraced production processes, design, and different sources of value. For uncertain and complex condition which occurred during transformation, Perez realizes the dynamic and complex of Kodak’s business position, one of evidences was that he judged digital cameras as a dinosaurs that cannot evolve as fast as the environment around them. The digital imaging market was faced to high competition, low entry barriers, falling real prices in digital products.
Whereas consumable products make a high profit, there was a strong competition from notable suppliers. As a result, profits were either slim or non-existent. To fight this, Kodak pioneered a number of technical advances particularly in inkjet printing paper. The new technological regime meant that it has to put many of its resources and capabilities which make certain that finance problem still existed. After looking into three parts of this essay, the paradox of deliberate and emergent will be assessed to answer the balance of planned and emergent approaches.
As Bob & Ron(2010b) suggest, strategy has to deal with the future which is unknown but still be shaped and it demands flexibility and adaptability because it is unpredictable. Kodak continues to be guided by its original vision of “You push the button; we do the rest” along with its new vision of “leader of digital images”. Kodak believed that a strong proprietary position and complement of its own expertise in technologies was necessary to its strategy. Although Kodak did not plan well for its resources and capabilities in planned strategy, it can issue emergent strategy to make realised strategy.
It can be seen from Kodak’s ambition to make its wholly integrated set of products and services to be simple and easy to use, put effort to innovation to make a competitive advantage (Robert M. , 2005) in its intense competition, compressed product cycles and declining product prices. Kodak realised that profit in technology-based industries was in software so it was heavily involved in developing various types of software to the market, its main strengths were in colour management, System Management and Enhanced Services Software for managing retail processing and rinting. For competitive positioning – Richard (2004) points that it is essential for organizations to define their unique competitive position based on a understanding of the opportunities and concerns, Kodak was positioned at every stage in the digital imaging chain and, with its EasyShare brand, its competitive position an future potential was placed particular attention on the brand and distribution, technology, new product development and finances.
This essay has looked at the issue of assessing the balance of planned and emergent approaches to strategic management of Kodak Eastman and found that it has set objective and planning systems for deliberate plan, however plans for preparing resources and creating capabilities for the future goal have not stated. Owing to fast moving digital industries, Kodak has required emergent strategies to help maintaining its realized strategy, resources allocation, joint venture with alliances who have a specific knowledge and seeking team staffs from outside for knowledge it required have defined in this approach.
The role of managers is vital for handling challenge when intended plan does not come in practice and emergent plans have to rise in circumstance of uncertain and complex condition. It appears that the paradox of these two approaches could be observed and Kodak’s top management could balance these to meet their objective in spite of intense competitive environment and product pricing threat.