External Environment Analysis & Eastman Kodak

Eastman Kodak is an international company that deals in the manufacture of digital cameras and their accessories. The company also sells printers and printing materials that are used in reproducing photos from their digital form. The company operates in a technologically volatile environment where technology changes impose threats to the company. The company’s mission states that it aims at providing consumers with imaging solutions to meet their diverse needs. The company also upholds its values that give it a unique identification in the field of image processing.

The values inform the employees of what is expected of them to avoid unnecessary pressure in the workplace. This increases job satisfaction that leads to increased efficiency in the operations of the company. The values include: upholding integrity that ensures employees observe ethics in discharging their duties, trust and appreciating individual achievement. These values are incorporated in the mission statement to ensure the company remains a global leader in providing imaging solutions.

Environment analysis is the study of the business environment in which the company operates. This environment has a direct impact on the business as it provides challenges and opportunities that the business should consider when conducting business. Porter’s five forces model provides a competitive analysis of the business operating environment. The model considers five aspects that are; threats by new entrants in the industry, industrial competition, power possessed by consumers and vendors and competition from substitute products (Blythe, 2004, p67).

New entrants pose challenges since they come with new methods of production that are efficient and reliable. They may also enter the market by offering low prices on products as they seek to establish themselves in the industry. The threat of new entrants is high in an industry where there is no product differentiation. Product differentiation allows for consumers to identify with the company’s products so as to build on their loyalty. The threat is also high if the period required for a return on capital is short and the company can capitalize easily on the economies of scale.

Competition in an industry should be carefully analyzed since it determines the successful establishment of a company. Competition in an industry is high if consumer loyalty is low whereby it does not matter from which company consumers purchase their products. The ability of consumers to switch to substitute products increases competition in an industry. In an industry where companies employ the same tactics in promoting their products in the market, competition is high since there is room for a company to enter and use new strategies in exploiting the market.