Nowadays film photo cameras swiftly replace by digital ones. Despite of all advantages of digital over film cameras, professional photographers claim that photos from film cameras are better. But professionals of photography present the minority on the market of photo cameras and most customers on this market are unsophisticated amateurs, which most often do not see the difference between film and digital cameras photos. Moreover, amateurs consider digital photos better and of course they appreciate all other advantages of digital cameras such as: LCD, memory cards, additional functions, digital zoom, sound and video record etc.

Customers’ preferences drive the supply and thus camera manufacturers produce more digital cameras. Kodak Company, which is one of the world leaders of photo cameras, is not an exception and “is preparing a big strategic move away from traditional film and plans to bet its future on new digital markets”. Kodak’s administration claims that Kodak stops most investments into film technology and enter the digital market of photography. This market is already saturated with such companies as Nikon, Olympus, Canon, Fuji etc. So which arrangements will Kodak apply to occupy a worthy place on the market?

First of all Kodak decided to behave more aggressively in order to fulfill more market segments. Earlier Kodak used the following targeted marketing scheme: goods complex commercial activities receiving income because of satisfying customers – I mean that Kodak didn’t pursued customers and sold expensive goods. Nowadays it looks like Kodak shifts to another targeted marketing scheme – receiving income from the sales volume. Thus Kodak diversified its range with cheap digital products.

Secondly, Kodak does its best in order to decrease its costs. In order to achieve this they cut the amount of dividends for 62.8%. Of course, investors may sell their stock and find more profitable place for investments – this is weak point of the decision. But Kodak predicts that its revenue will increase significantly in the nearest years and thus investors have an opportunity to increase their incomes – this is the strong point of cutting dividends. The next step of cutting the costs – closing ancillary businesses and reducing the staff. The saved money Kodak invests into the development of the digital products.

Thirdly, Kodak developed a line of digital cameras, which already gained customers’ confidence and pretend to be leaders in two price segments simultaneously ($200 - $399 and $400 - $599 ). Additionally Kodak offers many other services for digital images – online printing, sharing and editing. These services are quite popular.

Of course Kodak performs many other activities in order to get success on the digital market (involving in joint ventures for example) and of course all these activities are stipulated by the increased demand on the digital cameras and accessories. Kodak chose not easy way, but even now it is already seems that the market “accepted the new player”. Kodak’s risks are very substantial, but the bets are high and it’s too late to recede.

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