Kodak’s Turnaround Formula

Kodak has just announced its turnaround strategy of going against the grain of the printer business, and drastically cutting the prices of ink cartriges from the industry norm of $30 down to $10 for black and white, and $15 for color. The ink business is $45 Billion a year, and Kodak currently has no position in it. The market shares are as follows, dominated heavily by HP, followed by Epson, Canon, and Lexmark.

Is this strategy going to work?
To a degree, it will perhaps cause some grief for HP and the rest, especially Canon, whose brand emerges from the photography core. But Kodak’s brand recognition is in photography, so it may not cause serious dent in HP’s marketshare. Nonetheless, it is a good strategy, one that will start building them a position in the printing business starting from nothing.

In parallel, I would strongly recommend a much bigger focus on the online photo sharing market, where they have a presence, but are not the market leader. Photobucket, that leads this market, is still independent, and will be an excellent acquisition.