Kodak in China


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Case Details:

Case Code : BSTR146
Case Length : 14 Pages
Period : 1984-2004
Organization : Kodak
Pub Date : 2005
Teaching Note : Available
Countries : China
Industry : Imaging

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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Background Note

Kodak, founded in 1884 and headquartered in Rochester, New York, had revenues of $13.3 billion in 2003, an increase of 3.8% over that of the previous year. Net income came down by 65.5% from $770 million in 2002 to $265 million in 2003.

The company manufactured and marketed consumer, professional, and health imaging products and services. In 2003, Kodak was the market leader in 32 product categories within its five business areas.3 By 2003, Kodak had almost 28,000 U.S. patents, of which 5,000 were earned between 1995 and 2000. The 2003 Tech Brand Scorecard by Forrester Research4 mentioned Kodak as the second most trusted manufacturing brand.5 Since the inception of the Academy Awards in 1929, every Oscar for Best Picture has been awarded to a movie shot on Kodak film. Kodak established its first representative office in China in Shanghai6 in 1927. In 1984, when China wanted to strengthen its own photo industry, Kodak helped Xiamen Fuda Photomaterials Co.,7 (Xiamen) in building a color film plant.

In 1993, Kodak operated from the three locations of Beijing,8 Shanghai, and Guangzhou9 and had an employee strength of 30. It was only after George Fisher (Fisher) became the Chairman and CEO of Kodak in December 1993 that the company went into an expansion mode in China.

Making Inroads Into China

Throughout the 1980s and till the mid-1990s, Kodak was a poor rival to FujiFilm (Fuji)10 and Lucky Films (Lucky)11 in China's photographic-products market. Kodak's 500-odd branded outlets in China in the mid-1990s were less than half of Fuji's. Succeeding in China was important for Kodak, as according to Fisher, "To be the leader in the world, you have to be the leader in China."12 The first Kodak Express13 shop in China was set up in 1994. In 1995, China was Kodak's 17th largest market. In 1997, Kodak had sales of $250 million in China. In 1997, the company moved the office of the assistant chief operating officer14 of Kodak to Hong Kong from the Kodak Headquarters at Rochester...

Excerpts >>

3] Digital and Film Imaging Systems, Health Imaging, Commercial Printing, Commercial Imaging and Display and Components.

4] A technology research company headquartered at Cambridge, Massachusetts.

5] The most trusted manufacturing brand was Dell. Kodak came two-tenths of a point behind Dell and ahead of companies like IBM, Apple, Sony, and Hewlett Packard.

6] Shanghai is the financial center of China.

7] A domestic company in the Chinese photo industry.

8] The capital of China.

9] The capital of the Guangdong province from the time of the Ming dynasty, Guangzhou is an international port of transportation and trade.

10] Headquartered in Tokyo, the imaging, information, and document solutions company registered sales of 2,506 billion yen in 2003.

11] A domestic company in the Chinese photo industry.

12] William J Holstein, "All the film in China," U. S. News & World Report, July 06, 1998.

13] A global Kodak-branded retail outlet program.

14] Third position in the Kodak hierarchy.

 

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