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Kodak needed to divest its chemical and pharmaceuticals businesses to increase its emphasis on digital imaging because in order for them to remain competitive in the imaging industry they need to focus on developing capabilities and strategies that will allow them to prosper and grow. Their involvement in other industries was a costly distraction. George Fisher, chairman and CEO of Eastman Kodak, said it best when he said, “We are not in the photographic film business or in the electronics business, we are in the picture business.” He showed focus. According to the case, few of the new initiatives undertaken by Kodak produced any major revenue growth. When Fisher took over, and decided that Kodak need to get rid of those costly businesses, he knew what he was doing. Divesting was the best strategy for handling them. Instead of trying to salvage the businesses that were not profitable he chose to generate the maximum cash flow from existing investments without reinvesting. He sold Sterling Winthrop pharmaceutical company for $2.9 billion and used the money generated from the sale to pay off debts.
Four important elements to Kodak’s strategy in digital imaging
1. Realizing that the consumer market would continue to be dominated by traditional film for some time and Taking a hybrid approach to digital imaging by providing facilities in retail outlets for digitizing and editing images from conventional photographs. This allowed customers to store, transmit, and print digital images.
2. Using the World Wide Web to allow consumers to post their photographs and order prints online.
3. Introduci ...