Question

Kodak was once the largest supplier of photographic film. In 2004, it was dropped from the Dow Jones Industrial Average after having been listed for 74 years. Kodak failed to use IT to fend off which one of the following Porter's 5 competitive forces?a. Threat of substitute products

b. Potential threat of new entrants
c. Industry collaboration
d. Bargaining power of suppliers
e. Bargaining power of buyers

Answer 1

A) Threat of substitute products

Step-by-step explanation:

It is really hard to imagine how much the world changed in 20 years, but a good way to get a perspective is to look at how many things were replaced by a smartphone. Normal people probably wouldn't be able to walk with so many things that a smartphone replaced, e.g. recording cameras, photographic cameras, agendas, telephones, microphone, radio, speakers, and a long list of etc.

Back in time, about 30 years ago, Kodak was huge. but around 25 years ago, some Japanese companies started to launch digital cameras which were not very good actually. The funny thing is that digital cameras were invented almost 50 years ago by Kodak. But they were afraid it would shrink their huge profits in photographic paper, that they didn't pay attention to it. Then digital cameras became popular and boom, Kodak went bankrupt.

Nowadays, even digital cameras are obsolete, only a few very expensive ones are still sold for professional users. While the rest of us carry our smartphones.

When companies get too comfortable with their operations, they risk becoming obsolete. Even companies that were great innovators in the past, like Yahoo or IBM (Kodak itself) think that since they are so big and powerful nothing can happen to them. Well, google happened to Yahoo and IBM stopped selling PCs.

Answer 2

a) Threat of substitute products.

Step-by-step explanation:

The threat of substitute products is one of the factors that fuels competition in the industry as explained by porter's five forces. This is threat that a similar product or service can reduce the return the return on investment for a business if customers switch to such product because they consider such as more valuable in terms of product offering like price and value.

Kodak, for example has lost its market for for film because customers had switched to the use of more advanced photography technology that do not require use of film.