Corporate Strategy & Performance Measurement

BUSN 9128 Assignment 1 – Performance Measurement Essay

Submitted By: Himanshu Gupta

Email - [email protected]
Student No - 23064426
Programme: MSc Strategic Project
Management
Table of Contents

Essential Background Information of Kodak ............................................................. 2

Environmental Turbulence Experienced by Kodak ................................................... 2
Critical Success Factors And Key Performance Indicators .................................... 3
Demonstration of Balanced Scorecard – Kodak........................................................ 5
Is Balanced Scorecard is a Useful Framework ? ....................................................... 8
Recommendations ........................................................................................................... 8
Conclusion......................................................................................................................... 9
Reference List ................................................................................................................. 10
 Organisation – Eastman Kodak Company “Kodak” (1888)

Essential Background Information of Kodak

Kodak, established in 1888 by George Eastman, stood as a trailblazer in the realm of

photography. The company's ground-breaking products, such as Kodak film and Brownie
camera democratized photography, making it accessible to the wider populace. Kodak
became a household brand for decades, with its products employed by successive
generations of photographers. Kodak’s initial objective was multifaceted, aiming to make
photography accessible to the average person, striving for revolutionary advancements in
the creation of photographic products, and aspiring to rise to the top of the industry as the
leading producer of photographic equipment (Kodak, 2023a).

Kodak, a company with a rich legacy in imaging and innovation, is strategically adapting to
the digital era. The company’s multifaceted vision includes strengthening its position in the
printing industry with sustainable solutions, expanding its capabilities in digital imaging,
incorporating sustainability principles into its operations, leveraging its brand through
licensing, and investing in emerging technologies. This comprehensive approach aims to
maintain Kodak’s relevance and leadership in the rapidly evolving imaging industry.
Additionally, Kodak’s long-term vision is audacious, signifying its intent to retain its
dominance in the imaging field while simultaneously expanding into new and emerging
markets (Kodak, 2023a).

Environmental Turbulence Experienced by Kodak

Environmental turbulence experienced by Kodak in the previous six months has been
shaped by a variety of elements. Kodak is subject to external factors outlined within the
PESTEL framework, encompassing various elements that highly influence the company's
operational environment.

Political Factors

Kodak's overseas product sales are affected by trade rules, and they protect their unique
technologies and products with patents. They also follow environmental regulations, which
can be a challenge and affect their expenses. In a nutshell, Kodak's business is influenced
by a mix of trade, patent, and environmental rules.

Economic Factors

The unpredictability of global economic stability has led to challenges in forecasting demand.
Simultaneously, rising costs of essential raw materials, such as silver, have exerted
increased pressure on profit margins. Additionally, elevated labour costs in specific
operational regions have further exacerbated the margin-related concerns. As more
individuals adopt smartphones and digital cameras for their photographic needs, the demand
for conventional film products has declined. In the half-year period concluding on June 30,
2023, Kodak witnessed a 20% reduction in revenue from its film and chemical offerings,
which form a significant portion of its traditional business (Kodak, 2023b).
Social Factors

The rise of digital photography has significantly influenced traditional film companies like
Kodak. Evolution in consumer preferences towards digital cameras and smartphones,
alongside the proliferation of social media platforms, which streamline the sharing of photos
and videos, has resulted in a reduced demand for Kodak's traditional film products.
Furthermore, the increasing trend of instant photography presents a formidable challenge to
Kodak's film-based business (Kodak Sustainability Report, 2022).

Technological Factors

The emergence of smartphones has unquestionably exerted a profound influence on the

conventional photography sector. Owing to the continual advancements in smartphone
camera technology, a substantial number of consumers have transitioned from employing
dedicated cameras to utilizing their smartphones for photographic purposes. Prominent tech
companies such as Apple and Samsung etc., have made substantial investments in
augmenting the photographic capabilities of their devices. Progressions in sensor and lens
technology have empirically indicated a growing preference among consumers for employing
smartphones as their primary tools for capturing fleeting moments in time (Kodak, 2023c).
“A study conducted by DxO Labs has demonstrated that contemporary sophisticated
smartphone cameras can surpass the performance of high-end compact cameras
manufactured just a few years ago.

Environmental and Legal Factors

The Increasing concern about Environmental Pollution such as in the past half-year, Kodak
has been implicated in several environmental legal disputes. In May 2023, a collective of
Rochester, New York residents initiated a lawsuit against the company, claiming that
Kodak’s production facilities have polluted their potable water with the chemical compound
1,4-dioxane. This legal case is yet to be resolved. Furthermore, in June 2023, The USA
State Department of Environmental Conservation (DEC) accused Kodak of contravening
state environmental regulations at its Haverstraw, New York manufacturing plant. The DEC
contends that Kodak has been illicitly discharging pollutants into the Hudson River without
the necessary permit. Kodak, however, has refuted these allegations (Benková et al., 2020)

Critical Success Factors And Key Performance Indicators

Kodak, a prominent player in its industry, has delineated several critical success factors
(CSFs) that are pivotal to its business operations:

Innovation: To outpace competitors and cater to customer needs, Kodak places a high
emphasis on continual innovation.

Customer Satisfaction: The provision of superior products and services is crucial for Kodak
to retain customer loyalty.

Operational Efficiency: Streamlined and efficient operations are key to reducing costs and
enhancing profitability for Kodak.

Financial Performance: Robust financial results enable Kodak to invest in future growth
and provide returns to its shareholders.

Sustainability: Kodak is committed to operating sustainably and responsibly with respect to

the environment (Kodak Annual Report, 2022)
To gauge its progress towards these Critical Success Factors, Kodak monitors several key
performance indicators (KPIs):

A) Financial Metrics:

Revenue Growth: This is an indicator of the company’s financial health and its
capacity to increase sales over time.

Profit Margin: This represents the company’s profitability, calculated as the ratio of
net income to revenue.

Return on Equity (ROE): This metric evaluates the company’s proficiency in

yielding profits from the equity invested by shareholders.

B) Operational Metrics:

Market Share: This reflects the company’s competitive position, indicating its ability
to attract and retain customers within the market.

Customer Satisfaction: This assesses the company’s success in meeting customer

needs and expectations.

Employee Satisfaction: This gauges the company’s ability to foster a positive work
environment and retain high-quality talent.

C) Innovation Metrics:

Number of New Products: This measures the company’s innovative capabilities,

tracking the number of new products launched each year.

Time to Market: This assesses the company’s efficiency and responsiveness to

market trends, tracking the time taken to introduce new products to the market.

D) Environmental Metrics:

Waste Reduction: This tracks the company’s commitment to environmental

sustainability, measuring its waste generation and reduction efforts.

Energy Consumption: This measures the company’s commitment to energy

efficiency and environmental sustainability, tracking its energy usage and
conservation efforts (Kodak Annual Report, 2022).
Demonstration of Balanced Scorecard – Kodak

Objectives Measures Targets Initiatives

Particulars

Enhance the Evaluate the A 5% increase in Optimize

financial rate of revenue revenue, a profit operational
viability/Improve
growth and the margin of 10%, a efficiency and
profitability and
Return on return on assets strategically invest
Financial promote Equity (ROE). (ROA) of 15%, in opportunities
revenue Earnings per and earnings per that capitalize on
expansion. share (EPS) is share (EPS) Kodak's strengths
also amounting to as an industrial
considered. $2.00. manufacturer.
Addressing Proportion of Attain a customer Place customers
Customer revenue satisfaction score at the forefront,
demands, derived from of 90%, establish concentrate on
Customer Increase market recently benchmarks intelligent revenue
share and introduced aligned with growth, automate
customer products and customer tasks in customer
satisfaction. Customer feedback & service, and
satisfaction market research, invest in training
score. and secure a and development.
market share of
20%.
Enhance Duration of Achieve a 10% Establish a new
manufacturing product reduction in cycle product
Internal cycle efficiency development time, decrease development
Processes and optimize cycles, count the defect rate by protocol, allocate
engineering of newly 50%, and resources to
processes. introduced enhance adopt innovative
Start new products, and productivity by manufacturing
smartphones quantity of 15%. technologies, and
projects. resolved streamline supply-
customer chain
service issues. management.
Encourage Employee Determine exact Launch Employee
innovation and engagement performance leadership
Learning and foster a rating, turnover timings based on programs,
Growth commitment to percentage, industry norms facilitate career
continuous and the count and past paths, and foster
learning of of trained operational a positive
Staff. employees. achievements. workplace culture.

(Kaplan, 2010) & (Kodak, 2023c)

(Kaplan and Norton, 2001)
(Kaplan and Norton, 2001)
Is Balanced Scorecard is a Useful Framework ?
Yes, I agree. Kodak serves as an illustrative case study of strategic adeptness,
particularly in the effective utilization of the Balanced Scorecard (BSC) amidst
environmental turbulence. The company has demonstrated a discerning application
of the BSC, enabling the identification of nascent opportunities and the formulation of
strategic pathways for sustainable growth (Anthony, 2012). The Balanced Scorecard
assumes a pivotal role within Kodak's strategic framework, serving a multifaceted
purpose in the identification and prioritization of strategic risks. This structured
approach facilitates the systematic assessment and prioritization of strategic risks
based on their potential impact on the organizational landscape (Gawankar et al.,
2015) (Based on BSC Model and Figure 1 & 2).

In the context of the Eastman Kodak Company, the Balanced Scorecard emerges as
a cornerstone in the development and implementation of contingency plans,
providing a methodical and structured framework for navigating and proactively
addressing strategic risks. This strategic apparatus not only serves as a risk
mitigation tool but also facilitates a dynamic response to environmental uncertainties,
fostering resilience and adaptability in the pursuit of organizational objectives.
Furthermore, the Balanced Scorecard operates as a vigilant monitoring and tracking
mechanism, affording Kodak the ability to meticulously assess and supervise the
implementation progress of contingency plans, thereby ensuring organizational agility
in the face of evolving business dynamics (Olsen et al., 2020).

Recommendations
1.Establishing a strong online business presence and actively engaging with
customers through multiple social media platforms.

2.Committing resources to research and development endeavours to cultivate a

pipeline of novel and innovative products.

3.Exploring alternative business models, such as subscription-based services, to

diversify revenue streams, smart phone business etc.

4.Implementing a comprehensive talent management strategy to attract and retain

high-calibre personnel.

5. Cultivating a compelling and resonant brand identity that aligns with the values and
preferences of its customer base.

6.Kodak must spend money to follow environmental rules. They must avoid harming
the environment with their actions to avoid legal trouble. Additionally, they should
manage their environmental impact to maintain a positive public image (Vinokurova
and Kapoor, 2023).
Conclusion
At the End, harnessing its tradition of innovation, expertise, and commitment to
sustainability, Kodak is poised to cement its status as a pivotal entity in the global
imaging landscape for the foreseeable future. I would advise Kodak to persist in the
application of the Balanced Scorecard (BSC) and take into consideration the
supplementary recommendations I have presented. By adhering to these strategies,
Kodak can enhance its prospects for success in the digital photography industry.
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