Lean Start-Up Management

KODAK

Name – Rishavdeb Ghosh

Registration Number - 16BME0723
 The Rise of the Kodak Empire
It's not difficult to comprehend why Kodak would be so resolutely determined to ensuring its
center business: film was fiercely effective for a considerable length of time. At its top, around
70 percent of the U.S. film market, customer or something else, was bolted up for Kodak, and the
organization had a solid global dissemination also. The gross edges in video form deals moved
toward 70 percent also; Kodak was moving a ton of film, and it was making them a huge amount
of cash.
Established in 1888 by George Eastman, Kodak was in charge of the ascent of novice
photography among American shoppers, and it removed photography from the expert picture
studio and into regular daily existence. In 1900, the organization discharged the Brownie camera,
a buyer show that clients purchased for $1; they paid an extra 15 pennies for film. In 1912, the
organization discharged the Kodak Vest Pocket camera, which weighed 10.5 ounces, estimated
one inch in width when completely packed, and sold by the millions when generation ceased in
1926. The 1920s were a vital decade for the organization: in 1923, the organization delivered the
Cine-Kodak for home motion picture making, and in 1929, Kodak discharged the primary film
advanced for movies with sound.
Much is made by those commentating on Kodak's corporate history of the organization's
publicizing accomplishment too. The organization effectively urged those with families to wind
up archivers of those ethereal Kodak minutes, which could now be perpetually caught in a photo
got on film. Having made the customer advertise for film photography, Kodak utilized its
crusades to move individuals to utilize its items. Expressions like "Kodak as you go" or "Keep a
Kodak Story of the Children" can be discovered everywhere throughout the organization's old
notices, which were dribbling with nostalgic dialect and furthermore included bright photos of
individuals gifting, utilizing or generally making the most of their Kodak cameras.
In 1962, Kodak utilized 75,000 individuals and earned more than $1 billion in U.S. deals. It had
accomplished a mind boggling position through the span of 70 years in an industry that was to a
great extent its very own creation. The organization had gotten to that point by concentrating on
pitching modest cameras to keep buyers purchasing its film. As far as Kodak could tell, there
was nothing more imperative to the organization's prosperity than ensuring its interests in film
photography.
 Kodak Invented the Digital Camera
That reality might just clarify why officials at Kodak didn't exploit an innovation that would
shape the establishment of the up and coming age of cameras. As we talked about in our ongoing
inclusion of the Evolution of Digital Cameras, the advanced camera was designed amid the mid-
1970s by Steve Sasson, an electrical specialist working at Kodak.
What Sasson did was to construct an arrangement of electronic parts that could catch a picture
and show it on a screen. No place amid this procedure was film required. Sasson's development
centered around the utilization of the charge-coupled gadget, a light-delicate electronic sensor
intended to assemble optical data and convert it into computerized information. In December
1975, Sasson and boss professional Jim Schueckler played out the main effective trial of the
advanced camera at Kodak.
The photos delivered by Sasson's computerized camera were not of a similar picture quality as
film photos; the camera was a 0.1 megapixel camera regarding how picture quality in cameras is
estimated today. Sasson's contraption, which required a steady wired association with a TV show
to demonstrate pictures, was additionally profoundly unfeasible regarding conveyability. In any
case, there were those at Kodak who comprehended the hugeness of filmless photography, and
when Sasson introduced the innovation to the organization it was assessed that Moore's Law
would make the innovation reasonable for shoppers inside 15 to 20 years.
 The Demise of Kodak
Dependent on the benefits produced by its 35mm film, Kodak would do nothing that it saw as
imperiling the accomplishment of this business. An absence of early interest in advanced
photography amid the 1970s brought a one-two punch amid the 1990s as the goliath enterprise
was not just disappeared by littler firms like Sony and Canon however the whole film
photography industry made by the organization was at long last consigned to inferior status
behind computerized by the 2000s.
Notwithstanding, despite the fact that the ascent of advanced photography as the sole explanation
behind Kodak's disappointments makes a decent story, it was not the primary major innovative
interruption in the organization's history. Moment photography had been created by 1950 and
Polaroid had the ability to build up the cameras expected to catch this fragment of the market.
Kodak built up its very own moment photography items yet was sued by Polaroid and wound up
paying that organization $909 million of every 1990. All through the 1980s, a noteworthy move
in the film showcase was started by Japanese photography organization Fujifilm, which had the
ability to offer mass-delivered film to colossal retailers like Walmart at a cost not exactly
Kodak's film, a move which drastically undercut Kodak's benefits. By the late 1990s, Fujifilm
had caught a substantial bit of a lot of a market that was rapidly being emptied at any rate.
Kodak did not sit still and basically watch its business decrease, despite the fact that sometimes it
might have been exceptional on the off chance that they did. The organization focused on some
advanced photography developments amid the 1990s, including the formation of the film-based
Photo CD and a PC printing dock for photographs. Yet, its attention in movie form's gainfulness
and the substance forms used to make that film drove the organization to settle on some ill-
advised business choices. For instance, in 1988 Kodak paid $5.1 billion to gain American
pharmaceutical organization Sterling Drug. The organization would have liked to use its skill in
synthetic designing to make drugs with high overall revenues, however did not have the capacity
and assets to apply that information in making protected pharmaceuticals or amazingly shoddy
nonexclusive meds. Kodak disassembled the Sterling activities and sold off the rest of their
pharmaceutical business for under $3 billion just six years in the wake of procuring Sterling.
Pinnacle work at Kodak was knowledgeable about 1988, when the organization utilized 145,300
specialists over the world. In 1999, Kodak making the most of its most astounding stock cost
ever, with offers moving toward costs of $80. In any case, at this point the harm had been done,
and the fall would be abrupt: Kodak stock was 78 pennies for each offer as of September 2011,
only months before the organization's Chapter 11 documenting.
 Departments found in Companies
The Production function
The Production function undertakes the activities necessary to provide the organisation’s
products or services. Its main responsibilities are:
 production planning and scheduling
 control and supervision of the production workforce
 managing product quality (including process control and monitoring
 maintenance of plant and equipment
 control of inventory
 Deciding the best production methods and factory layout.

Close collaboration will usually be necessary between Production and various other functions
within the organisation, for example:
 Research and Development, concerning the implications of product design for production
methods and cost
 Marketing, concerning desired product functionality, appearance, quality, durability and so on
 Finance, concerning the availability of funds for purchase of new equipment and the
acceptability of inventory levels.
 Human Resource Management, concerning staff motivation implications of job design and
production methods.

Service Organisations
Although many of the principles of good management in a manufacturing environment also
apply in organisations that provide services (rather than manufacture products), service
businesses, such as banking and professional firms of accountants and solicitors, do have a
number of distinctive features which have implications for how they are managed.
1. Services are less easily standardized than manufactured products and so service quality
tends to be more variable. This makes human resource management and motivation more
critical.
2. Services are often ‘intangible’ (i.e., something that cannot be precisely measured or
assessed) and multi-dimensional – what exactly is the ‘service’ being offered by a bank, a
private hospital or educational establishment? This can make attracting customers more
difficult as it often depends on promoting an intangible item.
3. Unlike manufactured products, services cannot be stored, but must be consumed as they
are produced or they are wasted. This creates additional problems matching productive
capacity with customer demand. This is reflected in, for example, the common practice of
 commercial airlines offering very cheap flights based on marginal cost to fill empty seats –
a plane flying empty to New York is a service provided but wasted!
4. Ascertaining the cost of individual services is often also problematic, as the cost structure
of many service businesses is such that costs are often shared among different services.
This makes, among other things, pricing and the analysis of profitability of different
services more difficult than with most manufactured goods.

The Marketing function

Marketing is concerned with identifying and satisfying customers’ needs at the right price.
Marketing involves researching what customers want and analyzing how the organisation can
satisfy these wants. Marketing activities range from the ‘strategic’, concerned with the choice of
product markets (and how to compete in them, for example, on price or product differentiation)
to the operational, arranging sales promotions (e.g., offering a 25 per cent discount), producing
literature such as product catalogues and brochures, placing advertisements in the appropriate
media and so on. A fundamental activity in marketing is managing the Marketing Mix consisting
of the ‘4Ps’: Product, Price, Promotion and Place.
 Product. Having the right product in terms of benefits that customers value.
 Price. Setting the right price which is consistent with potential customers’ perception of the
value offered by the product.
 Promotion. Promoting the product in a way which creates maximum customer awareness and
persuades potential customers to make the decision to purchase the product.
 Place. Making the product available in the right place at the right time – including choosing
appropriate distribution channels.
In order to be successful, a business enterprise must either have a lower price than its
competitors, or a product that is in some way superior – or both! A competitive strategy based on
low price is known as a cost leadership strategy. A competitive strategy based on developing a
superior product is known as a differentiation strategy.
The historical evolution of marketing
Several writers (e.g., Harrison, 1978) have argued (and it is now widely accepted among
management theorists and practitioners) that there have been three distinct eras in the history of
advanced capitalist countries, such as the UK, which have affected the status, role and
responsibilities of the Marketing function. These were:
 1. The Production Era (pre–1930). This refers to a period of time during which products
(and services) were relatively scarce (thereby constraining consumer choice) and the most
important function of business was that of production. Marketing, in so far as it existed,
was considered the least important function.
2. The Sales Era (1930–50). This refers to an era characterised by a shift in emphasis of
business management from the production function to that of selling. With continued
industrial development and innovations, many new consumer oriented products became
available and a much more competitive selling environment resulted. This made it
necessary to seek out customers and make significant use of advertising, promotion and
personal selling.
3. The Marketing Era (1950–present). This period marked another significant change in the
attitude of senior management towards the status and responsibilities of marketing. This
change, referred to by many writers as the Marketing Concept (Kotler, 1967), meant a
departure from the previous concept of marketing as being the sales function of a business,
to one where marketing had a much greater responsibility in total company policy
formation and operation. Under the Marketing Concept, marketing was placed at the
beginning of the process of determining the products (services) which were needed by the
market, the price at which they should be sold and the way in which they were to be
distributed.

The Human Resources function

The Human Resources function is concerned with the following:
 Recruitment and selection. Ensuring that the right people are recruited to the right jobs.
 Training and development. Enabling employees to carry out their responsibilities effectively
and make use of their potential.
 Employee relations. Including negotiations over pay and conditions.
 Grievance procedures and disciplinary matters. Dealing with complaints from employees or
from the employer.
 Health and Safety matters Making sure employees work in a healthy and safe environment.
 Redundancy procedures Administering a proper system that is seen to be fair to all concerned
when deciding on redundancies and agreeing redundancy payments.
Organisations are dependent on their employees. Consequently, their recruitment and selection
require careful management.
In recent years, the Human Resources function has attained a more important status as there has
developed an increasing need (especially in service organisations) to ‘get the most’ from
employees, in terms of customer service, for the benefit of the organisation.
 The Accounting and Finance function
The Accounting and Finance function is concerned with the following:
 Financial record keeping of transactions involving monetary inflows or outflows.
 Preparing financial statements (the income statement, balance sheet and cash flow statement)
for reporting to external parties such as shareholders. The financial statements are also the
starting point for calculating any tax due on business profits.
 Payroll administration Paying wages and salaries and maintaining appropriate income tax and
national insurance records.
 Preparing management accounting information and analysis to help managers to plan, control
and make decisions.

What Could Have Happened Differently?

Kodak isn't the main organization to confront real dangers to its prosperity presented by the
capacity of new advances to upset markets. It is surely by all account not the only organization to
have its benefits harmed by missing the watercraft on another innovation. The historical
backdrop of PC advancement gives a couple fascinating instances of this. For example, Xerox
and that organization's Palo Alto Research Company (Xerox PARC) developed a significant
number of the innovations that shape the premise of individualized computing, for example, bit
mapping, graphical UIs and Ethernet organizing, quite a bit of which were joined into the
organization's Xerox 914 scanner. In spite of the fact that the item was uncontrollably effective,
Xerox concentrated on the printer components in innovative work and overlooked the
individualized computing viewpoints, permitting organizations like IBM and Apple to exploit
showcase openings a lot later.
Accounts of effective advances that stamp a noteworthy move in business additionally exist, be
that as it may. IBM had been a noteworthy early designer of individualized computing
innovations. Notwithstanding, when the benefits from registering wares started to drop as PCs
turned out to be more affordable for customers, the partnership had the capacity to effectively
shed its PC business and move into the innovation counseling segment.
As a company with enormous benefits and tremendous innovative work exercises, Kodak had the
power during the 1970s to make some key interests in Silicon Valley organizations. The CCD
electronic sensor used to catch picture information for the Kodak computerized camera was
produced by Fairchild Semiconductor, one of the fundamental Silicon Valley organizations. As
no less than one analyst appropriately calls attention to, Kodak's inheritance connection to film
blinded it to the potential that advanced imaging needed to disturb the photography advertise.
Organization with littler innovation firms during the 1970s as opposed to keeping advanced
camera generation in-house would almost certainly have empowered the company to contend in
the computerized camera industry that detonated all through the 2000s.
The narrative of Kodak ought to be a wakeup call to organizations of any size: on the off chance
that you create an innovation with buyer potential and you overlook it, you do as such at your
own hazard. Kodak realized that computerized photography would turn into a shopper
innovation sooner or later, however they didn't foresee advanced toppling film the manner in
which that it did. Organizations which neglect to exploit the sensible utilizations of their
scholarly properties are likely bound to rehash this destiny in some capacity, while organizations
who can spot emptied openings like this one will have considerably more accomplishment after
some time, regardless of how productive 35mm was at a certain point.