In year 1994, KODAK had important strategic decisions to make in order to ensure that a bright future is waiting for KODAK. At that time, although Kodak was dominating the consumer photographic film market, it had been facing a 6% decline in market share over a five year period. The reasons for KODAK's market share loss could be examined in two major parts; supply effect and demand effect.
SUPPLY EFFECT DEMAND EFFECT
-Attractive Market for new supplier
-High margins (Kodak estimated at 70%)
-Dissipating loyalty from consumers and retailers
-Kodak did not offer any competition in economy and price brands -Relatively small market growth
-Consumers did not perceive any major print
difference in quality output among the brands
-Consumers tendency to view film as a commodity
-Kodak focused commitment on "Ectar"
-Increased competition from Fujifilm in the US market.
Under these circumstances, if KODAK maintained the status q ...