IS KODAK GOING TO HURT HP’S PROFITS ?

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IS KODAK GOING TO HURT HP’S PROFITS ?

 user 2007-03-05 at 12:23:00 pm Views: 60
  • #17650

    Is Kodak going to hurt HP’s profits?
    Filed
    under: Products and services, Competitive strategy, Hewlett-Packard ,
    Eastman Kodak I’m a fan of Clayton Christensen and have read a few of
    his books on business market disruption — including The Innovator’s
    Dilemma which focuses on the hard drive industry in the last 30 years
    or so. When he writes a piece on disruption, it’s generally a very good
    piece and more often than not, what he talks about comes true in some
    form.When Christensen talked about the rise of RIM a few years ago, it
    made sense — make a portable email device that performs one function,
    and performs it very well. Since then, RIM’s BlackBerry phones have
    taken the market by storm and competitors like the Palm Treo and
    Windows Mobile units took years to catch up. In other words, quality
    wins over quantity — we all don’t need Swiss army knife-type portable
    computers with us at all times — but many of us need mobile access to
    email at almost all times. RIM knows that I am sure.So, with Kodak’s
    new plan to lower the prices of consumer inkjet printer ink to
    tolerable levels ($10 to $20 per cartridge), will the printing and
    imaging divisions of larger competitors like HP get hurt as a result?
    HP, Lexmark and others sell consumer inkjet printers at cost (or even
    at a loss) in order to make the margin up on inkjet cartridges with
    incredibly huge markups (not really new news.)If Kodak is to compete on
    the price level of consumer inkjet printers and undercut the profit
    centers of the competitors with cut-rate pricing on ink cartridges,
    could this disrupt the marketplace for consumer printers and their
    prices? Sure it could, although it’s too early to see if Kodak’s
    strategy will work. If it does and Kodak implements this strategy
    long-term, look for competitors to either follow suit or raise
    consumer-level printer hardware prices to compensate.