This week Kodak announced that they will cease making still cameras, video cameras and digital frames. Whilst this doesn't mean we will no longer see cameras with the Kodak name on them it does mean that they will be simply licensing someone else's products going forward.
A key phrase in the announcement for me is "For some time, Kodak's strategy has been to improve margins in the capture device business by narrowing our participation in terms of product portfolio"
Rationalising the range of products they participate in selling to improve margins sounds to me exactly like the process most of the smaller speciality stores have been through over the years.
The bigger the operation the later they come to this rationalisation. I wonder how long it will be before we see the larger specialty stores go through this same process and become more focussed on niche product ranges to improve their overall margins.
Reducing the amount of brands on display may also have the benefit of simplifying the consumers choice
A visit to Micheals this week to look at their new dedicated Leica and Canon product zones shows they are certainly looking to target customers who are brand focussed.
Another classic example of shifting your ideas of what products you stock is the launch this week of US retailer Adorma's dedicated iPhone accessory store. Is it a case of 'if you can't beat them join them'? or a smart retailer following customer demand?
Have you changed your product mix, or 'narrowed your participation in terms of product portfolio'?
We'd love to hear your thoughts on how this has changed your business.
pmaaustralia@pmai.org
Eastman Kodak Co., Rochester, N.Y., announced today, as a result of its ongoing strategic review process and commitment to drive sustainable profitability through its most valuable business lines, it plans to phase out its dedicated capture devices business - comprising digital cameras, pocket video cameras and digital picture frames - in the first half of 2012. Kodak will instead expand its current brand licensing program, and seek licensees in these categories, as other brands, like Polaroid and Vivitar, have done.
As recently as last month, Kodak was introducing innovative cameras like the EasyShare Wireless Camera M750
Kodak executives say the company remains committed to its consumer businesses, which will be comprised of online and retail-based photo printing, as well as desktop inkjet printing.
"For some time, Kodak's strategy has been to improve margins in the capture device business by narrowing our participation in terms of product portfolio, geographies and retail outlets. Today's announcement is the logical extension of that process, given our analysis of the industry trends," says Pradeep Jotwani, president, Consumer Businesses, and CMO, Kodak. Upon completion of the phase out, Kodak expects to achieve annual operating savings of more than $100 million. Kodak expects to incur a charge related to separation benefits of approximately $30 million resulting from the exit of the business.
Kodak's continuing consumer products and services will include:
Retail-based photo kiosks and digital dry lab systems, and the company now has more than 100,000 kiosks and order stations for dry lab systems around the world, with some 30,000 of those units connected to the most popular photo-sharing sites.
Consumer inkjet printers, where Kodak has outpaced overall market growth for several years. Kodak consumer inkjet printers provide consumers with high-quality output and the lowest total ink replacement cost. Consumers can send documents and photos to Kodak printers from anywhere, using any web-connected device.
Kodak apps for Facebook, which make it easy for consumers to obtain photo products using photos from their Facebook albums.
Kodak Gallery enables consumers to share their photos, and offers product and creation tools that enable people to do more with their photos.
The Kodak camera accessories and batteries businesses. These products are universally compatible with all camera brands, and extend into other consumer product segments such as charging units for smartphones.
The traditional film capture and photographic paper business, which provides products and solutions to consumers, photographers, retailers, photofinishers and professional labs.
