AN ASSIGNMENT ON

ORGANIZATIONAL CHANGE

SUBMITTED BY:
Abhijit Prusty

SUBMITTED TO
PROF. VIBHA CHETAN

DSBSPGDMA1101

Dayananda Sagar Business School

Shavige Malleswara Hills,
Kumaraswamy Layout
Bangalore 560078

Organisational Change

Meaning:
Organizational change is a structured approach in an organization for ensuring
that changes are smoothly and successfully implemented, and that the lasting
benefits of change are achieved. In the modern business environment,
organizations face rapid change like never before. Globalization and the
constant innovation of technology result in a constantly evolving business
environment. Recent phenomenon like social media and mobile adaptability
have revolutionized business and the effect of this is an ever increasing need for
change, and therefore change management. The growth in technology also has a
secondary effect of increasing the availability and therefore accountability from
knowledge. Easily accessible information has resulted in unprecedented
scrutiny from stockholders and the media. prying eyes and listening ears raise
the stakes for failed business endeavors and increase the pressure on struggling
executives. With the business environment experiencing so much change,
organizations must then learn to become comfortable with change as well.
Therefore, the ability to manage and adapt to organizational change is an
essential ability required in the work place today.
Due to the growth of technology, modern organizational change is largely
motivated by exterior innovations rather than internal moves. And when these
developments occur, the organizations that adapt quickest create for themselves
a competitive advantage. Meanwhile the companies that refuse to change get
left behind and this can result in drastic profit and/or market share losses.
Organizational change directly affects all departments from the entry level
employee to the upper management. With recent developments like social
media marketing and smart phone applications, the entire company must learn
how to handle these new changes to the organization. Whether its the CMO

determining how to incorporate social media, or the secretary representing

themselves and their company responsibly online, change occurs rapidly in
todays ever developing world.
When determining which latest techniques or innovations to adopt, there are
four major components which must be considered.
1. Levels, goals and strategies,
2. Measurement system,
3. Sequence of steps,
4. Implementation and organizational change,
Organizational change can have many faces. But regardless of the type, the
critical aspect is a companys ability to win the buy-in of their organizations
employees on the change. To effectively implement organizational change there
is a four step process. First, recognizing the changes in the broader business
environment. Second, developing the necessary adjustments for their companys
needs. Third, training their employees on the appropriate changes. And fourth,
winning the support of the employees with the persuasiveness of the appropriate
adjustments. This four step process is change management in its essence, and
organizational change in practice.

Principles of Change Management:

Example of Organisational Change:

1. Mission changes,
2. Strategic changes,
3. Operational changes (including Structural changes),
4. Technological changes,
5. Changing the attitudes and behaviors of personnel,
As a multidisciplinary practice that has evolved as a result of scholarly research,
Organizational Change Management should begin with a systematic diagnosis
of the current situation in order to determine both the need for change and the
capability to change. The objectives, content, and process of change should all
be specified as part of a Change Management plan.
Change Management processes may include creative marketing to enable
communication between change audiences, as well as deep social understanding
about leaderships styles and group dynamics. As a visible track on
transformation projects, Organizational Change Management aligns groups
expectations, communicates, integrates teams and manages people training. It
makes use of performance metrics, such as financial results, operational
efficiency, leadership commitment, communication effectiveness, and the
perceived need for change to design appropriate strategies, in order to avoid
change failures or resolve troubled change projects.
Successful change management is more likely to occur if the following are
included:
1. Benefits management and realization to define measurable stakeholder
aims, create a business case for their achievement (which should be
continuously updated), and monitor assumptions, risks, dependencies,
costs, return on investment, dis-benefits and cultural issues affecting the
progress of the associated work.
2. Effective Communications that informs various stakeholders of the
reasons for the change (why?), the benefits of successful implementation
(what is in it for us, and you) as well as the details of the change (when?
where? who is involved? how much will it cost? etc.).

3. Devise an effective education, training and/or skills upgrading scheme for

the organization.
4. Counter resistance from the employees of companies and align them to
overall strategic direction of the organization.
5. Provide personal counseling (if required) to alleviate any change-related
fears.
6. Monitoring of the implementation and fine-tuning as required.
Kinds of Change and the Barriers to Change

There are different kinds of change that an organization might undertake or be

forced to undertake because of internal and external factors. The internal factors
for change include reorganization and restructuring to meet the challenges of the
future and also to act proactively to initiate change as a means of staying ahead
of the competition. The external factors include change that is forced upon the
organization because of falling revenues, changing market conditions and the
need to adapt to the ever changing business landscape.
Change can be organic which means that it evolves slowly and is like
meandering up the gentle slope of a mountain.
In this case, the organization and the management have enough time to prepare
for change and reorient themselves accordingly. This is the kind of change that
is adaptive meaning that firms have the opportunity to adapt themselves to the
change.

Change can be radical which is rapid, sudden and uncertain.

This is the kind of change that is disruptive and often forces organizations to
reorient themselves without adequate notice and warning. It is better for
organizations to anticipate change rather than be forced into accepting change
that is rapid and sudden.

We have seen how managers at different levels resist change and how this
resistance manifests itself. Apart from the ideological and personality issues,
there is the very real possibility of change being resisted because the visibility
of what comes next is not clear. For instance, many managers tend to resist
change because the change initiators have not clearly spelt out the outcomes of
the changes and the possible impacts that such changes have on the
organization. This is the realm of the known unknowns and the unknown
unknowns which arise because of ambiguity, complexity and uncertainty.
Hence, the resistance to change can come about due to the lack of coherence in
the vision and mission and because the change is not clearly communicated as
well.
Finally, the rapidity with which change is introduced can upset the organization
structures that are usually rigid and bureaucratic with bean counters at all levels
resisting and actively thwarting change. Hence, it needs to be remembered that
change initiators take into account all these factors when introducing changes.

Overcoming Barriers to Change

Research has shown that the best way to get the senior managers at all levels
interested in the change initiatives is by engaging them and seeking their buy-in
for the change management process. Studies have proved that the managers in
the upper echelons buy into the change from a strategic perspective where the
accent is on performance and hence radical or disruptive change is seen as part
and parcel of an organizations development. Managers at the middle level can
be made to see the value inherent in change and hence they can be brought on
board. The frontline managers views and inputs can be sought and thereby their
cooperation and participation in the change obtained. These are the broad
outlines and the following detailed sets of approaches can be pursued as well.
Make Them the Hero
By making the managers the change drivers and change initiators is often the
best way of securing their buy-in. The point here is that by getting the managers

to be the ones who are implementing change and by giving them centre stage, it
is possible to secure their participation.

By definition, senior managers are highly capable, motivated and ambitious. By

making them the stars of the change process, their innate abilities can be
harnessed to the benefit of the organization. It is often better to have a close
association with the senior managers to achieve the desired results.
Show them the potential of Change
By selling change and the value of such change to the organizations and
themselves the senior managers can be persuaded to accept change. The point to
note is that senior managers must be told what their role in the post change
scenario would be and by making them see themselves in the future vision, they
can be made to play a key part in the change management. As has been
mentioned earlier, if the benefits of the change are explained and by persuading
that the change does not involve downsizing or other reduction in roles and
responsibilities, the senior managers can be expected to be partners rather than
resisters in the change management process.
Painting the Alternatives
This is the stick part of the carrot and stick approach wherein senior managers
are told of the urgent need for change and by indicating to them what the
consequences for themselves and the organization would be if the change does
not succeed. By painting harsh alternative scenarios like declining market share
and repercussions of layoffs and downsizing if the change does not succeed
would make the senior managers realize the flip side of resistance. In this way,
they can be persuaded to accept the business realities behind the change
process.
Involving Them in the Change
By adopting a hands on approach that would involve all hands and
including all the stakeholders, senior managers can be brought on board. The
point is that by adopting an inclusive approach and giving a sense of ownership
to the senior managers and taking their inputs and feedback would ensure that

the key aspect of engagement is achieved. As has been pointed out throughout
this paper, the key to senior manager participation in the change initiatives is
through engagement and only by communicating clearly the benefits of change
and by positing the alternatives would it be possible to engage with senior
managers. A suitable narrative of the changes and the impact that they have on
the senior managers must be communicated to all levels and there must be a
process in place to bring on board as many managers as possible.

The Role of Senior Managers as Barriers to Change

It is often the case that when change programs are initiated in firms, there is a
level of resistance from senior managers due to a number of reasons. These
range from protecting their turfs to uncertainties regarding their position after
the change is implemented and to ego clashes as well as power politics. The
ways in which they can manifest their resistance to change ranges from citing
time pressures and constraints involved in implementing the change, citing
operational pressures in bureaucratic and mechanistic organizations where the
rigid structure does not lend itself to change and finally, by pointing out earlier
instances of change that have failed. The point to note is that it is human nature
to be comfortable with the status quo and hence barriers to organizational
change are psychological more than anything else.
In the case of senior managers, the barriers to change arise because they
would want to protect their turfs, resist change because it has been initiated
by a rival power group and finally, there is a tendency to resist change
because the senior managers do not see a role for them after the change is
implemented.
It needs to be remembered that while bad strategies result in failed change
initiatives, good strategies without proper execution and implementation lead to
the same result. Hence, it is not enough to have a good strategy in place if there
is no viable means of execution and implementation.
When we discuss about the barriers of change from senior managers, we need to
distinguish between the levels of managers. This is necessary as the barrier to

change is different at each level. For instance, the front line managers often
resist change because they fear for their positions post change. Since these
managers are vulnerable to the changes wrought by technology where their
positions become obsolete because of automation, the front line managers tend
to resist change because of this aspect. The front line managers might also be
disinterested in the change if it does not impact the day to day workings or the
operational issues. This is the case of the distance between the change
initiators and the operational managers that can result in the change being
remote and the front line managers being unconcerned with the change.
The middle level managers who form the sandwich between the workforce
and senior management have a pivotal role to play in change management
initiatives as they are the ones who communicate the changes to the workforce
and in turn have to report on the success or otherwise of the initiatives to the
senior management. These middle tier managers often resist change because of
inertia and a status quo mentality which makes them impervious to new
realities. It is a fact that the middle tier managers in bureaucratic or machine
structure organizations have a lot from continuing with the status quo because
of the tangible and intangible benefits that accrue to them.
Finally, and most importantly, the managers in the upper echelons tend to resist
change because they have personal fiefdoms that they protect jealously. Further,
they have big personalities because of which the possibilities of ego clashes
among the top management are very real. In cases where the change is initiated
by one faction, the rival faction tends to oppose such change purely on
personality issues alone. It is also noteworthy that senior managers and
managers at all levels exhibit tendencies that are described in theory as value
enhancing or utility maximizing (the so-called agency problems) which
would make them behave in ways contrary to the interests of the shareholders.
These are some of the characterizations of the levels of managers and their
tendencies to resist change.

Why Some Organizations are Better at Driving Change ?

We live in a world where increasing complexity is the order of the day and the
business landscape is characterized by a rapid turnover of companies which find
themselves dethroned from their position because of outmoded thinking or
anachronistic strategies.
For instance, Nokia and RIM (the maker of Blackberry) were at the top of the
leading mobile companies a couple of years ago. Now, their places have been
taken by Apple and Samsung because both Nokia and RIM got bogged down
due to a combination of internal problems as well as the failure to spot changing
trends. They could not foresee the trends which indicated that mobile phones
would be used for purposes very much different from making and receiving
calls and instead they would be used in ways that would revolutionize the
concept of mobiles as one-stop solutions for a wide variety of consumer needs.
In other words, these companies were victims of complexity.

To deal with complexity and uncertainty, companies need to shift the lens with
which they are viewing the business landscape and hence change according to
the situation rather than have long term strategies based on fixed notions or
projections that become obsolete within months. Change management in these
cases becomes critical and not just necessary or essential. And to adapt to
change, there needs to be a mindset and attitude change rather than plain
business strategies. The mindset change is something that needs the top
management to actively involve themselves in winning the hearts and minds
of the employees and the other stakeholders. Only when there is a buy-in
from the employees to the change initiatives being undertaken by the
management can they succeed.
The example of the legendary founder of Apple, the Late Steve Jobs is an
excellent case in point as to how charismatic CEOs can go about winning the
hearts and minds of employees. Jobs was not only instrumental in turning
around Apple Inc. from near bankruptcy to a leader in the industry, but also
ushered in a paradigm shift as to the way in which the computing and software
industry operated. Another example is the case of Google which has made the

organization of information its business and has ensured that the way in which
we function everyday has been transformed. In both cases, the CEOs could
inspire and motivate their employees to believe in their vision and by dint of
hard work and diligent attention to detail, they succeeded in being change
agents.
These examples show how change can be initiated in response to ever changing
and complex scenarios that business leaders face. What are needed are a
compelling vision and a fresh way of looking at issues. Once the vision is
articulated, there needs to be a push to reframe the issues and look at problems
in a new light. Making sense of complexity becomes easier if the strategies are
rethought according to changing circumstances. In conclusion, we need not
succumb to complexity and instead use it to drive change that is lasting and
beneficial to the company.

Role of Catalysts in Organizational Change

The other articles in this series on Change Management have listed the business
imperatives for change as well as the various barriers to change that arise from
internal and external resisters. In this article, we examine the other side of
driving change and that is to do with the role of people who can act as catalysts
in driving change.
Every organization has high performers and those who are steady as well as
those who make up the bottom of the performance chart. Though it is not
necessarily the case that the top performers are the ones who should drive
change, more often than not, that is the case. However, there might be pearls
waiting to be discovered as well.
The broader point that we are making is that management and the HR
department must institute a program that would identify potential change
agents who can act as catalysts for the change initiatives which the
management might be planning.

Most organizations have lists of employees whom they consider High

Potentials or Fast Trackers which indicate that the people in these lists are
being marked for higher positions and they are groomed accordingly. In
addition to that, the management along with the HR department can compile a
list of people who take initiative in their roles and are not content with merely
doing their assigned tasks but are proactive about trying on new ideas and
concepts. These people are an asset to any organization and the management
must identify such people and get them together to brainstorm about new
initiatives and how to make the organization more successful.
The qualities that are needed in such change catalysts are impatience with the
status quo, out of the box thinking, a different perspective than others about the
strategies that the company is pursuing etc. When we mentioned that such
people might not be necessarily the top performers, what we meant is that there
might be employees at all levels who given the chance to change the existing
paradigm may very well end up as the stars that the company needs. And when
there is a need for change, such people turn out to assets that the company had
undervalued all the while.
The point about the catalysts for change initiatives is that they have the
personal attributes needed to motivate and inspire others to follow their
lead. The key point here is that they would be people enablers and leaders as far
as leading from the front are concerned. Plus, they would with their infectious
attitude towards change be able to convince those who are skeptical about the
change initiatives. Hence, organizations need to rethink their system of rating
the employees and include the change agent part of it and maybe, assign it more
weight in determining the overall grade of the employee. Though this does not
take anything away from the employees who are diligent and produce results,
change initiatives can be driven only by a new way of thinking and hence nonlinear thinking must be encouraged.
Creating Sustainable Change - How to create and sustain change ?
Who doesnt like change and who doesnt want to change? These are certainly
truisms in the 21st century landscape where businesses proclaim their
commitment to change and exhort their employees to Be the change you want
to see. However, having a vision and mission statement that commits to change
is different from actualizing the change. There are numerous examples of so-

called paradigm shifters who have flattered to deceive. The best known
example of this is the launch of Hotmail as the worlds first free web based mail
service.
There was lot of hype surrounding Hotmail and its legendary founder, Sabeer
Bhatia, became an icon of sorts. Now, a decade later, how many teenagers who
have entered the cyber world in the last few years even know about Hotmail?
So, the point here is that having a great idea is just the first step. And executing
it to actually creating a shift in the way things are done is the next step.
Companies often do step 1 and step 2 pretty well. You might very well ask what
the problem is.

The problem is the sustainability aspect of change. Or, put another way:
How to create and sustain change by not losing the momentum? This is the
challenge that companies face in the contemporary world where your last
performance matters more than anything else. So, investors and the general
public eagerly await the new product launches and the Next Big Thing from
Microsoft, Google or Facebook and are disappointed if the offering does not
live up to their expectations. It is no longer the case that companies can ride on
their reputations created over a legacy system. Now, they have to constantly
innovate and do better or even do best each time they go to the market. With the
ever shortening product cycle and the dwindling time to market period,
companies are literally engaged in a race to the bottom as far as their
competitors are concerned.
So, how does one sustain the momentum? The first thing to do is to create an
atmosphere in the company or make the organizational culture Change
oriented which makes automatic the process of listening to the market and
responding appropriately. Next, invest in people who can be change agents
and then make all efforts to retain them and nourish them. Creation of an
organizational culture and nurturing change agents go hand in hand. The final
step is to incorporate change into the organizational DNA so that change
becomes a constant in the way the company does business. Taken together these
steps represent the maintaining of the change process and building on the
momentum created by the initial burst towards change. It needs to be

remembered that sustainability is important not only from the environmental

perspective but also from the organizational commitment to change. In
conclusion, the change game ought to be practiced by companies if they are to
remain abreast of the latest trends and to make the marketplace their own.

Role of HR in Change Management

This module has covered the various aspects of change management and the
roles played by senior management as well as the CEO in top down change and
the role of employees at all levels in bottom up change. This article looks at the
role played by support functions in an organization in facilitating change.
Specifically, it looks at the role that the Human Resources Department can play
in supporting and enabling change. Before we launch into the specifics of how
the HR can facilitate change, it needs to be remembered that change
management is first and foremost about people and their capacity to adapt
to change. Since, the HR department is all about recruiting, training and
monitoring employee performance; it has a key role to play in any change
management program. There are different aspects in which HR can play a
significant role and we shall consider some of them.
The HR department has to ensure that employees are motivated to undertake the
change and participate in the change management program. For this to happen,
they need to recruit the right people who can think out of the box and can bring
a fresh perspective to the table.
Companies like Yahoo and Intel look for people who can think non-linearly
and in unconventional ways. Once the right people are recruited, they need to
be encouraged and mentored so that they act as change agents. This is the key
element of a successful change management strategy and this is where the HR
department has a stellar role to play. Many companies have a separate role for a
People Manager wherein he or she has the responsibility of mentoring and
nurturing talent. Some examples are Fidelity and IBM that have designated
people managers who are apart from the line managers and so their primary
duty is to ensure the enabling and empowering of employees who report to them
in a dotted line fashion.

The point here is that the HR department must be encouraged to look for people
who can act as catalysts for change and who can motivate other employees to
participate in the change initiative. Since the HR department is staffed by people
who have degrees in organizational and personal behavior, enlisting their help in
driving change is a crucial element in the overall change management strategy.
Great companies have great leaders and great leaders are enabled and
energized by highly supportive environments that nurture and reward talent.
The last aspect of reward and recognition is the final element in a successful
change management plan and if the employees who enthusiastically participate
in change initiatives are suitably rewarded and adequately recognized, there is
an added incentive for them to further the change initiative.

In conclusion, HR needs to be seen as much more than a supporting

function and instead, must be viewed as integral to the organizations
change management strategy. Companies like the TATA group and Infosys are
highly successful at change management because their personnel policies are
employee friendly and are geared towards getting the best out of their
employees.

Why Change Management Programs Often Fail ? Some Ways to Actualize

Change

We have heard the story several times. A large conglomerate wants to

implement a change management program, which it then announces amidst
much fanfare and hype. The top leadership waxes eloquent on the need to
change and why the organization must actualize change. However, a few years
down the line, things are still bad for the company and the change program has

bitten the dust. What are the reasons for this? First, there is something called
change fatigue that sets in when the change being instituted is part of a long
string of change management programs that have been going on in the
organization. Second, the resistance to change (a topic we discussed at length in
previous articles) is the next reason. Third, the employees might have little faith
in the top management and the confidence in the management team is at such a
situation that the employees do not take anything that the management says
seriously.
Therefore, the obvious question is what the management should do to
actualize change. First, create an engaged organization where the buy-in
for the change is secured deep and wide within the organizational
hierarchy. This means that the Sandwich Layer of middle management and
the key power centers in the organizations are on the same page as the
management.

Second, have execution clarity, which means that the top management knows
what it wants and how it should go about actualizing change. The message of
change must be lucid and coherent and the senior as well as the other layers of
management must think through the change process. Third, create a critical
mass of enabled leaders who would carry through the change and who know
what exactly the change entails and how to go about it.
Fourth, the senior management must realize that in unity lies strength and
hence, must build a cohesive organizational culture that does not fray at the
edges or is hollow in the middle. In other words, there needs to be a sense of
purpose about the change process and how it must be actualized by all levels of
management. Fifth and finally, the Project Management Office and the
Governance structures responsible for change must articulate, implement, seek
feedback, and close out the change process as well as plug any leakages. The
important point to note here is that the PMO must be vested with full powers to
implement the change and as happens with economies and politics, governance
mechanisms in organizations must not be clogged. In other words, the
organizational arteries must be clear and free from appendages. If these
elements of the change management process are taken into account, actualizing
the change would be relatively easy.

Finally, the whole point of the change program must be to engage with the
employees at all levels and ensure that the change management program
targets the core of the organizations competencies and vision and mission.
In conclusion, change management programs can only succeed when these
elements are conjoined together to create a coherent and understandable
narrative that the employees can relate to.
Theories on organizational change management
There are many theories about how to "do" change. Many originate with
leadership and change management guru, JOHN KOTTER. A professor at
Harvard Business School and world-renowned change expert, Kotter introduced
his eight-step change process in his 1995 book, "Leading Change." We look at
his eight steps for leading change below.

Step 1: Create Urgency

For change to happen, it helps if the whole company really wants it. Develop a
sense of urgency around the need for change. This may help you spark the
initial motivation to get things moving.
This isn't simply a matter of showing people poor sales statistics or talking
about increased competition. Open an honest and convincing dialogue about
what's happening in the marketplace and with your competition. If many people
start talking about the change you propose, the urgency can build and feed on
itself.

Step 2: Form a Powerful Coalition

Convince people that change is necessary. This often takes strong leadership
and visible support from key people within your organization. Managing change
isn't enough you have to lead it.
You can find effective change leaders throughout your organization they don't
necessarily follow the traditional company hierarchy. To lead change, you need

to bring together a coalition, or team, of influential people whose power comes

from a variety of sources, including job title, status, expertise, and political
importance.
Once formed, your "change coalition" needs to work as a team, continuing to
build urgency and momentum around the need for change.

Step 3: Create a Vision for Change

When you first start thinking about change, there will probably be many great
ideas and solutions floating around. Link these concepts to an overall vision that
people can grasp easily and remember.
A clear vision can help everyone understand why you're asking them to do
something. When people see for themselves what you're trying to achieve, then
the directives they're given tend to make more sense.

Step 4: Communicate the Vision

What you do with your vision after you create it will determine your success.
Your message will probably have strong competition from other day-to-day
communications within the company, so you need to communicate it frequently
and powerfully, and embed it within everything that you do.
Don't just call special meetings to communicate your vision. Instead, talk about
it every chance you get. Use the vision daily to make decisions and solve
problems. When you keep it fresh on everyone's minds, they'll remember it and
respond to it.
It's also important to "walk the talk." What you do is far more important and
believable than what you say. Demonstrate the kind of behavior that you want
from others.

Step 5: Remove Obstacles

If you follow these steps and reach this point in the change process, you've been
talking about your vision and building buy-in from all levels of the organization.
Hopefully, your staff wants to get busy and achieve the benefits that you've been
promoting.
But is anyone resisting the change? And are there processes or structures that
are getting in its way?
Put in place the structure for change, and continually check for barriers to it.
Removing obstacles can empower the people you need to execute your vision,
and it can help the change move forward.

Step 6: Create Short-term Wins

Nothing motivates more than success. Give your company a taste of victory
early in the change process. Within a short time frame (this could be a month or
a year, depending on the type of change), you'll want to have results that your
staff can see. Without this, critics and negative thinkers might hurt your
progress.
Create short-term targets not just one long-term goal. You want each smaller
target to be achievable, with little room for failure. Your change team may have
to work very hard to come up with these targets, but each "win" that you
produce can further motivate the entire staff.

Step 7: Build on the Change

Kotter argues that many change projects fail because victory is declared too
early. Real change runs deep. Quick wins are only the beginning of what needs
to be done to achieve long-term change.
Launching one new product using a new system is great. But if you can launch
10 products, that means the new system is working. To reach that 10th success,
you need to keep looking for improvements.

Each success provides an opportunity to build on what went right and identify
what you can improve.

Step 8: Anchor the Changes in Corporate Culture

Finally, to make any change stick, it should become part of the core of your
organization. Your corporate culture often determines what gets done, so the
values behind your vision must show in day-to-day work.
Make continuous efforts to ensure that the change is seen in every aspect of
your organization. This will help give that change a solid place in your
organization's culture.
It's also important that your company's leaders continue to support the change.
This includes existing staff and new leaders who are brought in. If you lose the
support of these people, you might end up back where you started.

CASE STUDY ORGANISATIONAL CHANGE SONY

History
Masaru Ibuka, the co-founder of Sony.
In 1945, after World War II, Masaru Ibuka started a radio repair shop in a bombed-out
building in Tokyo. The next year, he was joined by his colleague Akio Morita and they
founded a company called Tokyo Tsushin Kogyo K.K., which translates in English to Tokyo
Telecommunications Engineering Corporation. The company built Japan's first tape recorder
called the Type-G.
In the early 1950s, Ibuka traveled in the United States and heard about Bell Labs'
invention of the transistor. He convinced Bell to license the transistor technology to his
Japanese company. While most American companies were researching the transistor for its
military applications, Ibuka looked to apply it to communications. Although the American
companies Regency and Texas Instruments built the first transistor radios, it was Ibuka's
company that made them commercially successful for the first time. In August 1955, Tokyo
Telecommunications Engineering released the Sony TR-55, Japan's first commercially
produced transistor radio. They followed up in December of the same year by releasing the
Sony TR-72, a product that won favor both within Japan and in export markets, including
Canada, Australia, the Netherlands and Germany. Featuring six transistors, push-pull output
and greatly improved sound quality, the TR-72 continued to be a popular seller into the early
sixties.

In May 1956, the company released the TR-6, which featured an innovative slim
design and sound quality capable of rivaling portable tube radios. It was for the TR-6 that
Sony first contracted "Atchan", a cartoon character created by Fuyuhiko Okabe, to become
its advertising character. Now known as "Sony Boy", the character first appeared in a
cartoon ad holding a TR-6 to his ear, but went on to represent the company in ads for a
variety of products well into the mid-sixties. The following year, 1957, Tokyo
Telecommunications Engineering came out with the TR-63 model, then the smallest (112
71 32 mm) transistor radio in commercial production. It was a worldwide commercial
success.

Product & Technology Milestones

(1955) Japan's first transistor radio, employing five transistors
developed in-house. The TR-55 became the forerunner of later portable
radios.

TR-610 Highly acclaimed for its novel design, it was a hit in

both Europe and the US. Approximately 500,000 units were sold
throughout the world.

(1965)

TFM-110 This model featured a black and silver design

which was representative of the Solid State Eleven. Its chic design and
unprecedented advanced sensitivity made the TFM-110 a top seller.

(1975)

ICF-5900 Five-band radio known by the nickname Sky Sensor. Its crystal

marker (based on a quartz crystal resonator) ensured precise shortwave tuning.

1976 ICF-7500 Skillfully designed to separate the tuner and

speaker, resulting in a high-performance, compact FM/AM receiver.

1995 ICF-TR40 Model commemorating the 40th

anniversary of Sony

radios. This handy portable radio featured a faux-

leather exterior with

metallic trim.

1997

ICF-B200 Emergency radio with built-in manual power generator. Just turn
the handle to charge the internal batteries.

2000

SRF-G8V The use of magnesium alloy ensured a slim but

durable body. With a text-to-speech function and a stand charger, this

radio was designed specifically for commuter use.

Sony Corporation - SWOT Analysis.

The Sony Corporation - SWOT Analysis company profile is the essential source for
top-level company data and information. The report examines the companys key business
structure and operations, history and products, and provides summary analysis of its key
revenue lines and strategy.
Sony Corporation (Sony) is one of the worlds leading consumer electronics firm with
additional interests in the entertainment industry through subsidiaries dealing with recorded
music, motion pictures, TV programming, DVDs and videos. The group operates globally
and is headquartered in Tokyo, Japan. It employed 163,000 people as on March 31, 2007.
The group recorded revenues of JPY8,295,695 million (approximately $70,355.8 million)
during the fiscal year ended March 2007, an increase of 10.5% over 2006.
The increase was driven by strong sales within the electronics, game and the
pictures segment. The operating profit of the group was JPY71, 750 million (approximately
$608.5 million) during fiscal year 2007, a decrease of 68.3% compared with 2006.The
net profit was JPY126, 328 million (approximately $1,071.4 million) in fiscal year 2007, an
increase of 2.2% over 2006.

Strength

One of Sonys greatest strengths is their ability to produce innovative, quality products.
Sonys web page states Sony innovations have become part of mainstream culture,
including: the first magnetic tape and tape recorder in 1950; the transistor radio in 1955; the
worlds first all-transistor TV set in 1960; the worlds first color video cassette recorder in
1971; the Walkman personal stereo in 1979; the Compact Disc (CD) in 1982; the first 8mm
camcorder in 1985; the Minidisk (MD) player in 1992; the PlayStation game system in 1995;
Digital Mavica camera in 1997; Digital Versatile Disc (DVD) player in 1998; and the Network
Walkman.digital.music.player.i.1999.(Sony.com/en/corporate).
PC World published The 20 Most Innovative Products for the Year 2006. Sonys Reader was
listed as number six and Sonys PlayStation was listed as number sixteen. Sony Corporation
has managed to be competitive and stay a powerful organization by learning from past
failures. Sony states the following: Sony has learnt much from previous unsuccessful
products. The Sony MSX home computer, for example, did not attain a satisfactory level of
success. But it did teach Sony development engineers valuable know-how that would be
applied in later years. In effect, these engineers became living resources, representing latent
power

within

Sony

that

did

not

exist

in

other

AV

companies

(Sony.net).

Another strength of Sony is their ability to be successful in several different markets. They
have made an impact in the video game market, the PC market, and especially the
television market and there are still numerous others.
The greatest asset of Sony is of its human capital, especially its engineers which make up
the R&D department. Their constant innovation is crucial for a consumer electronic firm
which specializes in audio-visual equipment and the higher profit margin, which comes from
being the leader of the pact. Subsidiaries are also well established, such as in the United
States and Europe which give Sony a distinct local hands-on knowledge of the local market.
It also makes Sony an international corporation, bringing together the talents and best of
strategies of both world to the organization. Besides the employees, the two founders, Ibuka
and Morita also legends in their fields which they create vision and sense of direction for the
organization. They also acts as bridges between the employees and the management.
The self promoting system and job rotating systems creates satisfaction for employees and
give them greater exposure to all aspects of the business. Ideally, this would produce better
products as engineers gain knowledge on consumer needs while marketing people engaged
in the production and can give their point of view.

The goodwill of the company among the consumers is one of the biggest asset of Sony
corporation. the general image of the company is it a big company with huge experience in
every field they are in ,provide high quality products, very expensive and best product.
Distribution network of Sony and all its subsidies id world class.
Showrooms made exclusively for the Sony products are very exclusively made. Which
makes a customer entering it get caught spirit of Sony and feels completely dragged by it.

Weakness
Sonys biggest and most recent weakness is their lack of innovation with PS3. Sony focused
on digital technology when building the PS3 and it has the ability to export video in highdefinition. But this technology can only be viewed on a high definition TV so a lot of people
will not even be able to see the full potential it has to offer. Another downfall to the PS3 is the
price, which Sony has recently lowered by $100. Yet the weakness of the PS3 is even
deeper when considering the range of video game selections. The majority of games
available are all first-person shooter games, which appeal to a particular market. There are
few games that appeal to a different section of video gamers. Sony executives made it clear
that they know they need to do more than lower prices to woo consumers back to its flagging
video.game.brand.

Opportunities
Sony seeks a lot of opportunities that utilize their strengths of innovation. At Sony Ericsson,
design is about more than just a good looking product: it is integrated into every step of the
process intelligent features, user-friendly applications, innovative materials and, of course,
attractive visual appearance. Design is the essential differentiator when comparing mobile
communications

products.

Sony's Reader, a device the consumer-electronics giant hopes is an early draft of how the
world will read books in the future, is another innovation that Sony is using as an opportunity
to enter a new market. The downloaded books generally cost 20 to 30 percent less than their
dead-tree counterparts, which is also setting a standard on what is expected in regards to
new.products.That.encourage.environmentally.friendly.devices.
One of the other CSL projects most likely to succeed was a nifty little piece of graphics
software for cell phones by Ivan Poupyrev. It might not sound like much, but the ability to
draw realistic icons and avatars directly on a standard (non-touchscreen) phone is sure to
add.Appeal.To.users.of.mobile.social-networking.sites.
Although there was far too much on display today to cover in depth here, there was a clear
emphasis on what many predict will be the boom technology of the next few years social
networking.in.all.itsforms.

Threats
A common threat facing any company in sales is competition. Sonys Vaio is its newest
innovation in notebook computers. The various models range in price from $845 - $2300.
However, Dell has a great reputation when it comes to laptops similar to the Vaio and has a
broader range of notebooks to choose from, not to mention that Dell has also been a top
seller when it comes to desktop computers. Additionally, the cost of a Dell notebook
computer seems to have a lower price tag than many of Sonys Vaio models.
Sonys top competitors in the gaming industry are Nintendo and Microsoft. The PlayStation 3
sales have fallen behind recently. In 2007, 82,000 PS3s have sold and 360,000 Nintendo
Wiis.
In the LCD television market, Sony excels but still faces some strong competition, including
Samsung, Sharp, Panasonic and more. Many of these same brands appear in the DVD
player.market.that.Sony.has.to.compete.with.
Competition isn't the only threat Sony is facing. Sony most recently had to make a public
apology concerning the use of a backdrop in a violent video game, "Resistance: Fall of
Man." Sony used the Manchester Cathedral in northwest England in this video game, which
features a bloody gun battle scene between American soldiers and aliens. Sony made a

formal, public apology on July 6, 2007. However, when asked to withdraw the game or make
donations to community groups, they have refused.

REASONS FOR CHANGE BY SONY CORPORATION

Problems of the Sony in Recent Times Sony is facing many difficulties and there are two
main reasons have caused to Sonys decline:

Lack of Innovation
Innovation development, in large part, defined the brand character for Sony. Sony grew to
international prominence because of its ability to constantly innovative products over its
competitive brand. Further, Sony had the ability to understand the hidden consumer demand
& needs and create the product categories through its innovative development. The success of
Walkman made Sony the undisputed market leader in portable music player. However, Sony
did not follow up with this innovative product line or upgrade any outstanding to sustain its

initial success (Surowieckis, 2011). During Apple iPad was introduced into the market, the
brand reputation of Sony had dented and has suffered the huge challenges in product
innovation (Business@GW, 2012).

Lack of Core Competence

There is another major problem for Sonys fall from the top is that Sony has ignored the
continuous development of core business, nowadays, Sonys failure in capturing the digital
music market, such as Sony to lose the market to Apple iPod due to lack continuous
improvement so that lack core advantages. Additional, unsuccessful excessive and unrelated
diversification, these failing diversification not only spends the brand resources in large part
(Rubio, 2012), but also transfers the brand focus from the core of the brand (Lawler, 2012).
Sony has stuck up in its multiple businesses: consumer electronics, music label,
semiconductor, music online store, movies, games and financial services etc. Hence, Sony
has already failed in product positioning and branding due to lack of brand focus and core
competence (Byford, 2012).

Objectives
Lack innovation and core competencies as the vital business problems are identified by
Sony. Sony is an innovation leading corporate. Once Sony has lack innovation, it should lose
the core competency. Problem solving and decision-making are important skills can be
effective in finding the root cause of the problems, making the best decisions and solutions
and averting tragedy for Sonys survival and prosperity. Its theory also can enable Sony to
achieve a sustainable competitive advantage over rivals. Therefore, through the problems of
study for Sony, the present paper discusses how to think critically about business problems,
and devise and implement the remedies for overall
Process of organisational change within Sony
1D Form a Team Establish a Sony group with cross-functional. The group of people
selected should have key competence connected to the current Sonys problems and be from
different areas of knowledge and expertise.

2D Describe the Problem In is in this step important to redefinition and re-map the Sonys
problems. Describe these two problems in a measurable quantitative terms by the tools such
as the 5W1H (Who, What, When, Where, Why, How). The Sony group should review the
data to find overall reasons behind its failure and to why the problems occur, aims at resolve
them.
3D Implement and Verify Short-term Corrective Actions In order to prevent these two
problems becoming bigger or spreading, define and implement an intermediate actions until
the permanent corrective action have been taken.
4D Define and Verify the Root Cause In this step all potential root-causes to the problems
should be identified, explained and structured why the problems occurred by the support of
applicable methods or tools such as a brainstorming session, Ishikawa, Fishbone, etc. Finally,
identify alternative solutions to prevent root causes for further investigation in next phase.
5D Verify Corrective Actions Confirm and evaluate that the chosen solutions will resolve
the Sonys problems and without causing new problems in this phase. It can help the Sony
group through compare to verify some of solutions might not work or are causing the risks
about new problems.
6D Implement Permanent Corrective Actions In this step the major task is to implement the
actions that were chosen in the previous step against Sonys problems. The Sony group
should establish a detailed implementation plan, so that it is clear everyone commits to the
work.
7D Prevent Recurrence Monitor the problems afterwards to explore any possible
recurrence of the problems and without causing new problems in order to make ensure that
the permanent corrective actions implemented to solving the root causes of the problems. 8D
Congratulate the Team Once these two problems are successfully resolved it is important to
recognize what the team has accomplished, share their knowledge and expertise and give
them praise for their collective efforts.

Changes undertaken by Sony corporation

Innovation Oriented Solutions
In order to reinforce Sony innovation technology development capabilities and ensure that
Sony tied closely to product and service innovation strategy, Shoji Nemoto (head of
innovation technology) and Tomoyuki Suzuki (image senior vice president) (Ellen, 2012),
both highly experienced and technical knowledgeable individuals with management
backgrounds and will lead R&D endeavors to innovation development. Sony also will work
with Kunimasa Suzuki (head of products and services innovation strategy) to ensure the
efficient innovation development of technology for existing product and service lines (Rosen,
2012), take a lead to push efforts to develop new concepts and acquire next-generation
innovation technologies. R&D, design and marketing will more consumer-centric to
innovation development and further beef up its designs and features so that revamp brand
image (Konan, 2012). Sony is pursuing ever-faster innovation based on its mid-to-long-term
strategies and by developing differentiated technologies capable of generating true value in
its products. One of Sonys key new business fields is the medical business, which currently
comprises medical-use printers, monitors, cameras, recorders and other peripherals. Although
Sonys medical-related businesses were previously scattered across several business units,
these have now been combined to form the medical business group, under the leadership of
Executive Deputy President Hiroshi Yoshioka. (Sony Annual Report, 2012) The alternative
solution is that creating new businesses units and pursuing new market fields to accelerating
innovation (Kaz, 2012).

Brand Focus And Core Competence Oriented Solutions

Sony is positioning its digital imaging, game and mobile businesses as the three main focus
areas of its consumer electronics business and will plans technology development and focus
investments in these three areas going forward. Sony anticipates that about 70% of its total
R&D financial budget will be main dedicated to these three areas (Sony Group, 2012).
Hence, Sony investing in its core areas in order to nurturing and strengthening its core
competence and brand focus towards regaining brand leadership. Sony is accelerating its
efforts to turn around the television business, for which it is targeting a return to profitability

in fiscal year 2013. Sony has already initiated cost reductions in LCD panel manufacturing in
addition to pursuing further production efficiencies by reducing model count by 40% in fiscal
year 2012 compared with fiscal year 2011. Comparing fiscal year 2013 to fiscal year 2011,
Sony is also targeting a 60% reduction in fixed business costs and a 30% reduction in
operating costs as it executes a thorough overhaul of the television business. (Sony Annual
Report, 2012) The alternative solution is realigning business portfolio (Minato-ku, 2012),
Sony will restructure its organization structure, operating subsidiaries and trimmed down its
unrelated diversification business units as it aims at further enhance managerial and
operational efficiency.

Impact Of Organisational Change

After using these solutions Sony increases about 70% of overall sales and 85% of operating
income from the entire consumer electronics business by Fiscal Year 2014 (Sony Annual
Report, 2012). Among, Sony will target digital imaging business total sales of 1.5 trillion yen
and a double-digit. In addition, Sony will target total sales of one trillion yen and profitability
of 8% from game business and 1.8 trillion yen from the mobile business, and significant
operating income margin improvement.

CASE STUDY 2 ORGANISATIONAL CHANGE KODAK

1. INTRODUCTION OF COMPANY
Eastman Kodak Company, commonly known as Kodak, is an American
technology company focused on imaging solutions and services for businesses.
The company is headquartered in Rochester, New York, United States and
incorporated in New Jersey. It was founded by George Eastman in 1888. Kodak
provides packaging, functional printing, graphic communications and
professional services for businesses around the world. Its main business

segments are Digital Printing & Enterprise and Graphics, Entertainment &
Commercial Films.
SUCCESS YEAR OF KODAK
Kodak is best known for photographic film products. During most of the 20th
century Kodak held a dominant position in photographic film, and in 1976, had
a 90% market share of photographic film sales in the United States. The
company's ubiquity was such that its tagline "Kodak moment" entered the
common lexicon to describe a personal event that demanded to be recorded for
posterity.
Kodak began to struggle financially in the late 1990s as a result of the decline in
sales of photographic film and its slowness in transitioning to digital
photography, despite having invented the core technology used in current digital
cameras. 2007 was the most recent year in which the company made a profit.
However, Kodak ended its most recent fiscal quarter reporting a $19M profit.
As part of a turnaround strategy, Kodak focused on digital photography and
digital printing and attempted to generate revenues through aggressive patent
litigation.
From the company's founding by George Eastman in 1888, Kodak followed the
razor and blades strategy of selling inexpensive cameras and making large
margins from consumables film, chemicals and paper. As late as 1976,
Kodak commanded 90% of film sales and 85% of camera sales in the U.S.,
according to a 2005 case study for Harvard Business School.
TIME OF DOWNFALL
In January 2012, Kodak filed for Chapter 11 bankruptcy protection in the
United States District Court for the Southern District of New York. In February
2012, Kodak announced that it would cease making digital cameras, pocket

video cameras and digital picture frames and focus on the corporate digital
imaging market. In August 2012, Kodak announced the intention to sell its
photographic film (excluding motion picture film), commercial scanners and
kiosk operations as a measure to emerge from bankruptcy. In January 2013, the
Court approved financing for the company to emerge from bankruptcy by mid2013. Kodak sold many of its patents for approximately $525,000,000 to a
group of companies (including Apple, Google, Facebook, Amazon, Microsoft,
Samsung, Adobe Systems and HTC) under the name Intellectual Ventures and
RPX Corporation.
On September 3, 2013, Kodak emerged from bankruptcy having shed its large
legacy liabilities and exited several businesses. Personalized Imaging and
Document Imaging are now part of Kodak Alaris, a separate company owned by
the U.K.-based Kodak Pension Plan.
It has also been suggested that Kodak originated from the suggestion of David
Houston, a fellow photographic inventor who held the patents to several roll
film camera concepts that he later sold to Eastman. Houston, who started
receiving patents in 1881, was said to have chosen Nodak as a nickname of his
home state, North Dakota (NoDak). This is contested by other historians,
however, who note that Kodak was trademarked before Eastman bought
Houston's patents
EVOLUTION OF BRAND LOGO
Early 1900's. Kodak is the first company to integrate its name and look into
asymbol.
1930's. Focus moved to the Kodak name and the red and yellow "trade dress"
color.

1960's. The corner curl was introduced.

1970's. The mark retained the red and yellow colors and the Kodak name, but a
box and graphic "K" element were added.
1980's. A more contemporary type font streamlined the Kodak name within the
existing.logo
Today. The box is gone, simplifying the logo. The rounded type font and
distinctive "a" give the name a more contemporary look. Kodak is continuing
to use this logo with its sharpened focus on imaging for business.

2. PRODUCTS OF COMPANY:
1. Batteries, Chargers, Flashlights
KODAK Batteries are available in wide range of options, so you can find the
best battery for your needs. Our range includes Alkaline, Zinc Chloride and
Rechargeable batteries to keep your favorite and important items toys, MP3

players, smoke detectors, flashlights powered and ready to go when you need
them.

2. Camera Bags and Accessories, Flash Memory Card Readers, Binoculars

KODAK Camera Bags are available in various shapes, sizes and materials to fit
a wide range of cameras. Tripods range from 6" to 72". KODAK Card Readers
are available in many configurations to read most memory cards. KODAK
Binoculars range from small pocket size to waterproof/floatable models. Other
accessories include: lens filters, wireless shutter releases and led lights.

3. Digital Cameras and Pocket Video Cameras

The KODAK PIXPRO Digital Devices are powerful, economical cameras that
give photographers of all levels the confidence they need to make a creative
leap forward and find the story in every moment. The PIXPRO Cameras are
available in three varieties: compact and easy to use, high-powered zoom and
waterproof HD video cameras.

4. Eyeglass Lenses
These advanced technological lenses optimize your sight while maximizing
your look with all the latest styles in frames. Head to your local KODAK Lens
Vision Centre to have your lenses prescribed and fitted by an independent
expert.

5. Inkjet Paper and Specialty Media

KODAK Print Media products provide exciting ways for consumers to share
and display their photos and information with easy-to-use DIY products and
software for the home, school and workplace. The product line includes photo
inkjet papers, document papers, specialty inkjet media and software to meet the
needs of families and professionals.

6. Personalized and Document Imaging

The Personalized Imaging business markets high-quality imaging products and
services. Products include retail photo kiosks and dry lab systems, traditional
photographic paper and workflow solutions, still-camera film products and
digital

souvenir

photography

services

and

solutions.

The Document Imaging business enables customers to capture, manage and

deliver data from digital and paper sources.
7. Recordable Media
As people accumulate more and more digital files - data, pictures, videos, music
the need for secure, inexpensive and high-quality storage options is rapidly

growing. Kodak provides the perfect solution to your data storing needs offering
a large range of optical and digital storage devices and supplies, including flash
drives, portable hard drives, CDs, and DVDs. With these products, consumers
and businesses have the necessary tools to safely store, access, share and use all
forms of content.

RESONS OF ORGANISATIONAL CHANGE

POLITICAL FACTORS:
The US government is a very stable government and US product exists in the
whole world except for specific countries as Iran and North Korea.
US copyright law requires all photo shops to refrain from printing or
releasing digital images taken by professional photographers without a
copyright release
Images taken by amateur photographers may encounter difficulty in having
their professional-looking images in print; thus, affecting photo printing
sales.
ECONOMIC FACTORS:

 The global economies in the good condition, but the lack of demand for the
product negatively affect.
Digital camera sales in 2002 amounted to $2.96 billion USD, taking a
considerable portion of the total revenue of the industry.
Price declines of digital camera made it highly affordable for more
consumers, resulting to even greater demands.
SOCIAL FACTORS
The lifestyle changes and increased in using mobile phones with cameras
and affects negatively on the demand for regular camera.
Consumers use digital cameras to send them through electronic mail; most
digitally-captured images are stored for onscreen viewing.
Buyers have become more accustomed to buying technology-based products
that contain several features such as digital cameras and photo-capable cell
phones.
TECHNOLOGICAL FACTORS
Terrible development in mobile phones, compact cameras, leads to the end
of the regular cameras.
Rapid development in camera products brought about by technology requires
considerable investments for highly-skilled staff, marketing efforts and
production equipment.
New digital cameras must have multiple features that are appropriate to
current environment and customer needs

ENVIRONMENTAL FACTORS
Kodak has been widely criticized by environmentalists and researchers as
one of the worst polluters in the US. According to scorecard.org a web site
that collects information on corporate pollution, Kodak is the worst polluter
in New York State, having released 4,433,749 pounds of chemical into the
environment.
LEGAL FACTORS
Health and Safety is very important in Kodak and all the products are very
safe and company with laws of most world countries
REASON OF FAILURE:
Eastman Kodak is a picture-perfect example. It built one of the first digital
cameras in 1975. That technology, followed by the development of
Smartphones that double as cameras, has battered Kodak's old film- and
camera-making business almost to death. Strange to recall, Kodak was the
Google of its day. Founded in 1880, it was known for its pioneering technology
and innovative marketing. You press the button, we do the rest, was its slogan
in 1888.
By 1976 Kodak accounted for 90% of film and 85% of camera sales in
America. Until the 1990s it was regularly rated one of the world's five most
valuable brands. Then came digital photography to replace film, and
Smartphones to replace cameras. Kodak's revenues peaked at nearly $16 billion
in 1996 and its profits at $2.5 billion in 1999. The consensus forecast by
analysts is that its revenues in 2011 were $6.2 billion. It recently reported a
third-quarter loss of $222m, the ninth quarterly loss in three years. In 1988,
Kodak employed over 145,000 workers worldwide; at the last count, barely

one-tenth as many. Its share price has fallen by nearly 90% in the past year (see
chart).

For weeks, rumors have swirled around Rochester, the company town that
Kodak still dominates, that unless the firm quickly sells its portfolio of
intellectual property, it will go bust. Two announcements on January 10ththat
it is restructuring into two business units and suing Apple and HTC over various
alleged patent infringementsgave hope to optimists. But the restructuring
could be in preparation for Chapter 11 bankruptcy.
While Kodak suffers, its long-time rival Fujifilm is doing rather well. The two
firms have much in common. Both enjoyed lucrative near-monopolies of their
home markets: Kodak selling film in America, Fujifilm in Japan. A good deal of
the trade friction during the 1990s between America and Japan sprang from
Kodak's desire to keep cheap Japanese film off its patch.
Both firms saw their traditional business rendered obsolete. But whereas Kodak
has so far failed to adapt adequately, Fujifilm has transformed itself into a
solidly profitable business, with a market capitalisation, even after a rough year,
of some $12.6 billion to Kodak's $220m.

Organisational change undertaken by Kodak

As the brand with largest market share in category dominated by premium brands, Kodak
should exercise the high road strategy that implies high levels of innovation and
judicious pricing.

If Kodak starts to compete on price, they run the risk of transforming the category into a
commodity.

As the Market Leader, Kodak should not react desperately to movements of small
companies, but it should protect its market.

Kodak must align its interest with those of the retailers.

Sell on brand equity and image promise consumers that although they cant see
perfection, it exists

Kodaks existing buyers are predominantly brand-loyal giving them a lower-priced

Kodak branded option could subsume higher-margin lines

Instead of Royal Gold, disambiguate the two Gold lines and rename Ektar as Kodak
Platinum and Kodak Gold Plus as simply Kodak Gold. By having Gold and Platinum, the
company clearly communicates quality differences to the consumer

Widen channels - Distribute Kodak Platinum through all the channels, not only through
camera shops.

Launch an advertising campaign that emphasizes long-term quality over short-term

savings and educate the consumer.

The company should focus its efforts on innovation in all product lines, thereby justifying
and maintaining its premium market position. Innovation is the only way Kodak can fight
their product becoming a commodity.

Product launches may be supported by promotional activities and materials that further
educate the consumer about the superiority of Kodak products.