Question
Topic: Strategy
Kodak - The Story
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There's a company Kodak and they sell many products and services. Product A (e.g. film camera) holds 50%+ of the company's revenues.
This company holds 86% of the Canadian market in the camera industry.
Product A - camera, is a capital sale say $1000.00.
In order for the consumer to properly use it, they need to purchase consumables (e.g. films) for the price of 5$ each for 24 pictures (about $0.21 each picture).
Now, we have a company Canon and they sell only 1 product: Product D (e.g. digital camera)
Company DEF is a new player but their product D is a revolutionary product which is offering a more convenient and performant product than product A. There is no consumables other than a memory card ($100.00) which will hold much more pictures than a film and is a one-time purchase.
Company Canon is now taking some market share from company Kodak.
New technology tends to be expensive so not everyone can afford to have it. However, those who could, are in a different segment of the market - they are the high paying customers.
Therefore, Kodak invested a lot in R&D and come up now with Product B (digital camera) within the same year as Canon.
Competition is rough between products of different companies but competition is tougher between offerings of the same company.
The challenging question is:
How do you keep market share of product A to its highest level possible and for the longest time possible without affecting market share of Product B?
What strategy needs to be implemented to have a win-win situation of products A & B for Kodak?
What is the Unique Selling Proposition (if applicable)?
We know the history of Kodak and the company is closing its doors. However, we are not here to debate the reason why they were short-sighted and arrive late to offer the product on the market.
Thank you for your contribution.
Pierre