Westford – Assignment Tasks

Unit 3: Strategic Change Management - Unit code: J/602/2062

Semester: Sem 122: June 09, 2012 – August 2012

Instructor Information

Name Ms Nora Bhatia

Phone +919821554396 (cell)

Skype norabhatia

Email norabhatia@yahoo.com

LEARNER’S BRIEF- Front Cover sheet for BTEC – Level 7 Assessment in Business

BTEC – Level -7: PGD in Developing Strategic Management & Leadership skills

Learner’s Name: Sumesh AV

ID: DL12493

Class (Course): PBD in Developing strategic Management & Leadership Skills

Section : Semester-122 June 09, 2012- August 2012

Unit title: Unit-3 Strategic Change Management

Date assessment details issued: 30-June-2012

Date handed in: 14-July-2012

Word Count: 5200

STATEMENT OF AUTHENTICITY

I confirm that this is my own work and that I have not plagiarized any part of it. I have also noted the assessment

criteria and pass mark. I declare that the work I am submitting for assessment contains no sections copied in whole

or part from any other sources, unless it is explicitly identified by means of quotation mark or in the case of very

long quotations, by means of wholly indented paragraphs. I declare that I have also acknowledged such quotations

by providing detailed reference as in an approved format. I understand that unidentified and un-referenced copying

both constitutes plagiarism which is a very serious offence

Learner’s signature_______ ____________ Date: 14-July-2012

Learning Outcomes Assessment criteria (AC) Evidence for the criteria

1. Understand the background to

organizational strategic change

TASK 1

1.1 Discuss models of strategic changeTask 1.1a

1.2 Evaluate the relevance of these models to

organisations in the current economyTask 1.1b

1.3 Assess the value of using strategic

intervention techniques in organizationsTask 1.1c

2. Understand issues related to

strategic change in an

organisation

2.1 Examine the need for strategic change in

an organisation Task 1.2.a

2.2 Assess the factors that are driving the need

for strategic change in an organizationTask 1.2.b

2.3 Assess the resource implications of the

organisation not responding to strategic changeTask1.2.c

Introduction to Change management

Change management is an approach to shifting or transitioning individual, teams and organizations from a current

state to a desired future state. It is an organizational process aimed at helping change stakeholders to accept and

embrace changes in their business environment. Change Management processes may include creative marketing to

enable communication between change audiences, but also deep social understanding about leadership’s styles and

group dynamics. As a visible track on transformation projects, Organizational Change Management aligns groups’

expectations, communicates, integrates teams and manages people training. Successful change management is

more likely to occur if the following are included; Benefits management and realization to define measurable

stakeholder aims, create a business case for their achievement and monitor assumptions, risks, dependencies, costs,

return on investment, dis-benefits and cultural issues affecting the progress of the associated work, Effective

Communications that informs various stakeholders of the reasons for the change, Devise an effective education,

training and/or skills upgrading scheme for the organization, Counter resistance from the employees of companies

and align them to overall strategic direction of the organization, Provide personal counseling, if required to alleviate

any change-related fears, Monitoring of the implementation and fine-tuning as required.

Task 1.1a - Models of Strategic Change

There are many models for change management theories are available to describe change management process.

The change management process is the detailed activities or steps that a team which responsible for managing

change would follow for implementing the change for an organization. The models for change management process

are very useful in that they describe and simplify the process. Some of the change management models are; kurt

lewin model, Bullock & Batten model, Kotller 8 Steps, ADKAR model, Senge model, Carnall Model etc. some the

strategic change model as described below.

Kurt Lewin’s 3 phase change Model

Mr.Kurt Zadek Lewin introduced this change management concept, according to this model change is implementing

though three phases that are unfreeze, transition and refreeze. The first step unfreezing step defined as, reducing the

force that are striving to maintain the status quo and dismantling the current mind set for the team need to change.

Also this stage of change involves preparing the organizations to accept the change is necessary this first part of the

change process is usually the most difficult and stressful. For example by doing an attitude survey of staff, it may

show management that moral is quite low and that as result of this low morale the risk to safety is quite high. This may

influence a manager who has been resisting change to begin to take action. Kurt Lewinx model suggest that one of

the best way to motivate change is to first get people to see the needs for the change.

Source from: http://www.change-management-consultant.com/kurt-lewin.html

According to this model the second phase is transition phase. In this phase the team is preparing for change it

includes developing new behaviors, value and attitudes. Sometime through organizational structure, process change

and development techniques. There may be a period of some confusion for team move from the old way of doing

things to new. People are in this stage looking for a new and better ways to do the things. The behaviors may initially

be mechanical and they are starting to perform and behave in the ways that support for new direction. Once people

began to see how the change is benefiting them, they will begin to take ownership in the change and drive it.

The final step is re-freezing. According to this step the peoples adapt the ownership of new change. The organization

may revert to former ways of doing things at this point unless the changes are reinforced through re-freezing. After

implementing the change is the people, structure and strategy elements are all seems okay, immediacy the thing

should lock in other words freeze the changes. As part of re-freezing process, it is necessary to celebrate the success

of the change. It will help people to find closure, thanks them for enduring a painful time, and helps them believes that

future changes will be successful.

In summary the Kurt Lewin’s model demonstrate that to move an organization from particular strategic phase to its

desired change to achieve objective. For making easy this process first the organization should create a compelling

and motivating reason for change. Then implement and install the necessary change. Then aim to stabilize the

operations at a higher level of performance.

Bridge’s transition change model

This type of change model was created by Mr. William Bridge. The main advantage of this model is that it focuses on

transition rather than change. It means the change is something that happens to people, even if they don’t agree with

it. Whereas the transition is that what happens in people’s mind as they go through change. Change can happen

very quickly but transition usually occurs more slowly. There are mainly three stages of transition that people go

through when they experience change. Those are; ending-losing-letting go, the natural zone and the new beginning.

Transition curve, source: http://www.interactionassociates.com/node/681

Ending, Losing and Letting Go

People enter this initial stage of transition when organization first presentation with change. This stage is often marked

with resistance and emotional upheaval, because people are being forced to let go of something that they are

comfortable with. On this stage people may experience emotions such as; fear, denial, anger, sadness, disorientation,

frustration, uncertainty, a sense of loss. People have to accept that something is ending before they can begin to

accept the new idea. If the organization is not acknowledging the emotions that people are going though, the people

may encounter resistance throughout change process. It very important that to accept the people’s resistance and

understanding their emotions and feeling, and allow them the time to accept the change and let go

The Neutral Zone

In this stage, people affected by the change but often them getting confused, uncertain and impatient. Depending on

how well organization managing the change. Also it may chance to get heavy work load for the people as they get

used to new systems and new ways of working. Neutral zone is the bridge between the old and new. In this zone

people might experience; resentment towards the change initiative, low morale and low productivity, anxiety about

their role, status or identity, skepticism about the change initiative. Despite these this stage can also be one of the

great creativity, innovation and renewal; also it is the great time to encourage people to try new ways of thinking. Ion

this stage it is required to meet people frequently to give feedback on how they are performing, especially with

regards to change.

The New Beginning

The last transition stage is a time of acceptance and energy. People have begun to embrace the change intuitive. The

people are building the skill they need to work successfully in the new way and they are starting to see early wins from

their efforts. In this stage people are likely to experience; high energy, openness to learning and renewed commitment

to the group or their role. In this stage as the people begin to adopt the change, it is necessary that organization help

them sustain it. And take them to celebrate the success of change and for all their hard work.

Kotter’s 8 step change model

John Kotter, a professor at Harvard business school and world removed change management experts. He introduced

his eight steps of change process. According to his the process of change management as follows,

Step 1 Create Urgency

Organizations need to develop a sense of urgency around the need for change. This may help organizations to spark

the initial motivation to get thing moving. Creating an urgency includes an open convincing dialogue about the

change needs to be done as per external situation for organizations. Identifying potential threats and future trends,

examine opportunity and exploiting strategy,

Kotter’s 8 step change model, Source: http://www.samsari.se/site/blog/?tag=/kotter

Step 2 Form a Powerful Coalition

In this stage management need to convince the people that change is necessary. This often takes strong leadership

and visible from key people within the organizations. Once “change coalition” formed, and then continue to build

urgency and momentum around the need for change. For making powerful coalition organization can do; identify the

true leaders within the organization, ask for an emotional commitment from these key people, work on team building

within change coalition, check team weakness and ensure that the organization have a good mix of people from

different department and different level.

Step 3 Create a Vision for Change

Probably be many great ideas and solutions floating around during the initial change discussion within the

organizations. Organization should link these concepts to an overall vision that people can grasp easily. A clear

vision can help everyone understand about change requirement. For making a vision organization can do; determine

the value that are central to change, develop a future plan for organization, create a strategy to execute that vision,

Step -4 Communicate Vision

Organization needs to communicate its vision and strategy well to the people for transmitting the exact message to

people. It includes use the vision daily to make decisions and solve problems. When management keep it fresh on

everyone's minds, they'll remember it and respond to it. Organization can use “walks the talk “strategy for

communicating its vision to its people

Step-5 Remove Obstacle

Within the structure of change, it required to check barriers continually. Removing obstacle can empower the people

and it can help the change move forward. For removing obstacle organization can do’; identify or hire change leaders

whose main roles to deliver the change, review the organizational structure, job descriptions, and perforce systems to

ensure they are in line with organizations visions, recognize and reward people for making change happen, identify

the people who resist the change, take action top quickly remove the barriers.

Step-6 Create Short- Terms Wins

This step is meant that nothing motivate more than success. The organizations celebrate the victory early in change

process or within short time frame or else critics negative thinkers might hurt your progress. Create short term targets

to be achieved with little room for failure. Every short term ‘win’ that organization produce can further motivate the

entire peoples. For short term wins the organization can do; look for sure fire projects that can implement without help

from any strong critics of the change, don’t choose early targets that are expensive and organization want to be able

to justify the investment each project, thoroughly analyze the potential pros and cons of the targets, reward the people

who help to meet the targets.

Step-7 Build on the Change

Kotter argues that many change process fail because victory is declared too early. Real change ruins deep. Quick

wins are only the beginning of what needs to be done to achieve long terms change. Each success provides an

opportunity to build on what went right and identify what organization can improve. To build on change organization

can do; after every wins, analyze what went right and what needs improving, sent goals to continue building on the

momentum that organization achieved, keep ideas fresh by bringing in new change agents and leaders for the change

coalition.

Step-8 Anchor the Change in Corporate Culture

The final step is stick on change, make continuous effort to ensure that the change is seen in every aspect of the

organizations. That will help give that change a solid place in organizations culture. It is also important that leaders

who initiated for change continuously support for change. The organization needs to talk about progress of change, l

tell success stories about the change process, includes change ideals and values when hiring and training new staff,

and create plans to replace key leaders of change as they move on. This will help ensure that their legacy is not lost

or forgotten.

Task 1.1 b – How Appropriate are These Models of Strategic Change to Organizations in the Current Economy?

For evaluate the appropriateness for this strategic change model for organizations I can evaluate two case as

mentioned below.

Business diversion for Al Reyami Electromechanical Services

Al Reyami electromechanical service (M/s. ARE) is a construction engineering services provider in UAE market since

2001. ARE’s main business operations are electromechanical solutions and engineering service for building

construction. The main geographical area of ARE’s operation is United Arab Emirates. During the period of 2000-2007

there was a massive construction boom happed in United Arab Emirates, especially in the city of Dubai. Almost all

construction and constructions related industries within UAE enhance these opportunities and made tremendous

business opportunities throughout this period including ARE. But with the onset of the financial crisis of 2007–

2010, Dubai's real estate market declined after this six-year boom and slows down this massive construction boom.

Many low and medium scale Organizations dealing into constructions and related industries confronted difficulties to

generate new business opportunities and for their sustainability in market. Even bigger organizations are also insisting

to take actions for downsizing including ARE.

In this scenario ARE’s management develop an alternative and innovative idea to generate new business

opportunities to market sustainability, which is to convert ARE’s core business operations into facilities management

services from electromechanical constructions. Facilities management is a term defined as managing and

maintenance of properties which had been constructed earlier. During this period ARE gone through a change

process to divert their business and sustainability. This change process initiated by ARE’s management team and

they are used Kurt Lewin’s 3 phase change Model for implement this change process.

Unfreeze stage: In this unfreeze stage ARE management team starts prepare to make change half of its resource as

facilities management team. They called up an open discussion for all department heads and engineering staff for

their suggestions about change also ask them to educate their team about future change is very necessary for market

sustain for future.

Transition stage: in this stage ARE management formed a new registered firm Al Reyami Facilities Management

Services LLC as per UAE federal low. Also they prepared an organizational structure for new team. And they defined

the services rage and process flows for each service. Management keep updating all managerial decisions and it

development to employees and conduct training program for them to move with new changed circum stances and

business operations. For this transition stage ARE management planed a time span for 4 months

Refreeze: After 4 months transition stage peoples adapted the new change and new ways for doing business. And

they captured all new process and services procedure for new idea. ARE management evaluated the capability for

new team and allow them as an independed strategic business unit within the group of companies.

Change management in ICICI

Industrial credit and Investment Corporation of India-ICICI is leading private sector financial service institution in India.

ICICI implemented a large scale new business change in 1998 for tap new market and to become a financial power

house in India under the leadership of its Managing Director & CEO, Mr. K.V. Kamath. Here we can analyze his

change management initiative and change implementation with Kotter’s 8 step change model. Since ICICI is a large

and established private sector institution Kotter’s 8 step change model is very suitable for its change initiative because

the model describes detailed analysis for all change criteria. The 8 steps of ICICI’s change process as mentioned

bellow.

Step 1 Create Urgency

In this stage Mr. Kammath announced the urgency around the needs for change for ICICI mainly changes in the

organizational structure from a development bank mode to that of a market-driven financial conglomerate. Also his

aim is to develop ICICI is major financial powerhouse in India and increase its ability to respond to the market

changes

Step 2 Form a Powerful Coalition

Obviously these large-scale changes accouchements caused enormous tension within the organization. The systems

within the company soon were in a state of stress. Employees were finding the changes unacceptable as learning

new skills and adapting to the process orientation was proving difficult. The changes also brought in a lot of confusion

among the employees, with media reports frequently carrying quotes from disgruntled ICICI employees. According to

analysts, a large section of employees began feeling alienated. But Mr. Komath move forward with his decision and

he formed powerful collation within the team after re arranging the exiting team to suit with new change. The new

arranged team called specialist groups, and these specialist team known as ‘structured projects’, ‘infrastructure group’

as per the nature of their operations.

Step 3 Create a Vision for Change

In this Mr. Komath explained his clear vision and mission about ICICI and target needs to achieve though change

process. His aim is to become ICICI is a financial powerhouse and one stop shop for all financial services and

products. Also Kamath, having seen the changes occurring in the financial sector abroad and in the early 1990s,

Indian government allowed Indian corporate to raise long-term funds abroad,

Step -4 Communicate Vision

Mr. Komath developed a communication strategy and communication channel to distribute change management

update to everybody in the organizations. And he developed some key internal divisions to make communication

effectively such as; 'infrastructure group (IIG),' 'oil & gas group (O&G),' 'planning and treasury department (PTD)' and

the 'structured products group (SPG)'. Also he identified leaders for every key department for implementing process.

Step-5 Remove Obstacle

As usual Mr. Komath faces resistance for his change management process. The approach towards creating these

new skill sets, however, led to one unintended consequence. As these new groups took on the key tasks, a majority of

the work, along with a lot of good talent, shifted to the corporate center. While the zonal offices continued to do the

same work - disbursing loans to corporate in the same region - their importance within the organization seemed to

have diminished. Mr. Komath refuting this and he announced his opinion that; some of the people who did not fit in

this set-up were quick to leave the organization. However, this was just the beginning of change-resistance at ICICI.

Another change management problem surfaced as a result of ICICI's decision to focus its operations much more

sharply around its customers. In the system prevailing, if a client had three different requirements from ICICI he had to

approach the relevant departments separately. The process was time consuming, and there was a danger that the

client would take a portion of that business elsewhere. To tackle this problem, ICICI set up three new departments:

major client group (MCG), growth client group (GCG) and personal finance group. Now, the customer talked only to

his representative in MCG or GCG. And these representatives in turn found out which ICICI department could do the

job.

Step-6 Create Short- Terms Wins

In this stage Mr. Komath offered training for very employees is associated with new change process especially for

officers and junior management grades. Along with the training to the employees, Mr. Komath also took steps to set

right the reward system. To avoid the negative impact of profit center approach, wherein pressure to show profits

might affect standards of integrity within an organization, Mr. Komath ensured that rewards were related to group

performance and not individual performances. To reward individual star performers, the method of selecting a star

performer was made transparent. This made it clear, that there would be closer relationship between performance

and reward.

Step-7 Build on the Change

During change process it was reported that pressure on accountability triggered off some levels of anxiety within ICICI

which resulted in a lot of stress in human relationships. Dismissing reports of upsetting people, Kamath said, 'much of

the restructuring plan has come from the bottom.' ICICI also reviewed the compensation structure in place. Two types

of remuneration were considered - a contract basis which would attract risk-takers and a tenure-based compensation

which would be appealing to employees who wanted security. Kamath accepted that ICICI had been a bit slow on

completing the employee feedback process. Soon, a 360-degree appraisal system was put in place, whereby an

individual was assessed by his peers, seniors and subordinates. As a result of the above measures, the employee

unrest gradually gave way to a much more relaxed atmosphere within the company.

Step-8 Anchor the Change in Corporate Culture

The final step for change management process in ICICI is to stick on change, what Mr. Komath and his team had

been made. And make continuous effort to ensure that the change is seen in every aspect of the organizations to

achieve its desired objective o become a financial powerhouse. Also it required to communicate department leaders

about success about change process to their people within the department which Mr. Komath had made as part of

change management process. such as 'infrastructure group (IIG),' 'oil & gas group (O&G),' 'planning and treasury

department (PTD)' and the 'structured products group (SPG)',

Task 1.1-C The Value of Using Strategic Intervention Techniques in an Organization Undergoing Change

The strategic intervention refers to all the planned programmatic activities aimed at bringing changes in an

organization. These changes are intended to ensure improvement in the functioning of the organization. The changes

brought either internal or external agencies for organization, or any staff within the organizations. The intervention can

also relate to whole organization as to how to achieve better vertical or horizontal integration among all level.

Organizations need to basically analyze where, how, when what etc. , to carry out an intervention to improve their

performance. Interventions are carried to improve an organization from its current position to a desired position and to

achieve the desired change. A number of techniques are used for intervention . The focus of intervention could be ;

individual, interpersonal, group or team, system or subsystem, organization and the external environment. The

purpose of intervention could be to improve the process, Action, and provide feedback. Specific reasons for

intervention could be;

• To provide feedback about task, individual, team and other aspects of organizational dynamics.

• To provide awareness of changing norms, to confront and deal with issues constructively

• To develop positive attitudes openness and improve interaction among people,

• To educate employees, improve their knowledge and skills

• To bring constructive and desirable changes to improve individual and organizational performance.

Most frequently used interventions in every organization are ; person focused, role focused, action research based,

process feedback based and training based. And theoretical basis of interventions could be Psychoanalytical,

transactional analysis, Operant Conditioning and behavior modification, Achievement Motivation, Sensitivity analysis ,

forces field and group dynamics, socio-psychological, MBO etc.

Task-1.2-A why did ICICI need to plan for change? Examine why organisations need to plan for strategic

change

Change management is an approach to shifting or transitioning complexity of the process or project in an organization

from current stage to desired future state. Every organizations having their own growth objectives and it may varies

subjected to internal and external circumstances for the organization. Because this external and internal factors may

change as per number of reasons. The team responsible for governing the organization must understand how to

manage these varying circumstances and complexities to make positive and remarkable result for organizations. And

also they need to change and implement revised process and operational strategy for organization to stabilize its pre

defined growth objective according to varying circumstances. The reasons for changing external factors are ; business

environmental or competition, business relationship, technology, People change: change in leadership; shift of power

within the organization the internal factors which leads to organizational changes are re structuring or re engineering.

In addition to that there are some socio cultural, technological, political or legal, environmental and ethical reasons

are also effect organizational strategy and trigger organizational change.

Internal resources and financial implications, such as Cost of re-training, Costs of hiring, interviews, Loss of trust:

lower productivity, Loss of employees and customers, New product development, mergers and acquisitions, strategic

alliances, Loss of public opinion can affect customer relationships, and human resource issues like; Redundancies,

layoffs due to loss in business, Negative effects of downsizing, loss of interest, reduced risk taking etc are also trigger

organizational change because it may affect the organization exiting flow toward its strategically growth objective.

In the case of ICICI bank Mr. Komath having a strategic plan to change its organizational structure from a

development bank mode to that of a market driven financial conglomerate. Also as strategic leader of ICICI Mr.

Komath make his decision to create new divisions to tap new markets and to introduce flexibility in the organization to

increase its ability to respond to market changes. necessitated because of the organization's new-found aim of

becoming a financial powerhouse. And there was a positive announcement from Indian government in 1990 that to

allow the Indian corporate to rise long term fund aboard. This strategic vision and changing business environment

leads ICICI to further changes.

Task-1.2-B what drives the need for strategic changes in organisations? Assess these factors, which drive

the need for strategic change.

Change is inevitable in the life of every organization. In today competitive business world, most of the organizations

facing dynamic and changing business environment. They should either change their business strategy to sustain in

the market or just die. Organizations that learn and cope with change can thrive and flourish and others who are not

ready to cope with change will be wiped from market. The forces which make the changes not only market

sustainability; they are also technological, economic, political, social, legal, international and labour market

environments. When an organizational system is disturbing with its internal or external force, change frequently

occurs. And change process help organization to modify of its structure or process of the systems as per changing or

fluctuating internal or external forces. There are number of factors both internal and external which affect

organizational functioning. Any change in these factors necessitates changes in an organization. The major important

external factors are; technology, economy & market condition, social changes, political and legal changes. And major

internal factors are changes in managerial persons, deficiency in existing organization, and nature of the work force,

Technology: when there is a change in technology in the organizational environment and competitive organizations

adopt the new technology. The organizations under focus become less cost effective and its competitive position

weakens. Therefore, it has to adopt new technology, its work structure is affected and a new equilibrium has to be

established.

Economic and marketing conditions: in marketing every organization exports its output to the environment. Sometime

organization faced the marketing issues that. Competitor organizations are also exporting this same output or buyers

are not buying this output. Such kind of scenario the change process may help organizations to change its products

and services as suit with new marketing condition and its customer group.

Social conditions: Social changes reflect in terms of people’s aspirations, the needs, and their ways of working. Social

changes have taken place because of the several forces like level of education, urbanization, and feeling of

autonomy. These social changes affect the behavior of people in the organization. There, it is required to make

adjustment in its working so that it matches with people.

Political and legal changes: political and legal factors broadly define the activities which an organization can

undertake and the methods which will be followed by it in accomplishing those activities. Any changes in these

political and legal factors may affect the organizational operation.

Changes in managerial personal: There may be some internal changes due to change in key managerial persons

within the organizations. Some time old managers replaced by new managers because of retirement, promotions,

transfer or dismissal. Each new person can implement their own ideas and way of doing the process, result in that the

organization should according to the new ideas and process.

Deficiency in existing organization: deficiency in organization means, in the form of unmanageable span of

management, large number of managerial levels, lack in co-ordination between various departments, obstacles in

communication, multiplicity of committees, lack of uniformity in policy decisions, lack of cooperation between the line

and staff

Nature of the work force: Different work values have been expressed by different generation, i.e.; the group of 50 plus

values and younger generation will be thinking extremely different. Their behavior has also become very complex and

leading them towards organizational goals is a challenge for the managers. The employee turnover is also very high

which again put strain on the management.

Task-1.2-C- Implications on resources, if the organisation does not respond to strategic change

As I mentioned earlier the organizational external and internal conditions are varying time to time. Organization which

cannot manage this changes atmosphere cannot sustain for a long with their existing service, product, as well a

proactive approaches dealing with change is at the core of all aspects. But some organization is not bother about its

environmental change may because of their fear for implementing change. Some kind of organization might loosing

the market share and gradually and wiped off from market after some times. There are many real time examples such

case in the present business world. Eastman Kodak is the one of the biggest examples for such kind of organization

which loses their market share and industry leading position.

Eastman Kodak, the 131 year old film pioneer that has been struggling for years to sustain new digital driven market.

Although Kodak developed digital camera in 1975, the first of its kind , product was dropped for fear it would threaten

their exiting photographic film business. In the 1990’s Kodak planned a decade long journey to move to digital

technology. But their core business; convention al photographic film business faced no pressure from competing

technology at beginning, and as Kodak executives could not predict a world without traditional photographic film. But

its competitors identify the future opportunity in digital world and digital camera business and start produce and

market digital camera massively worldwide. Obviously the consumers whoever using conventional photographic

technology gradually switched to the digital offering from Sony and other competitive organization. Consequently

digital photography market is developed massively whereas sales of conventional photography dropped since 2001.

Competitive organization like Sony and Fujifilm achieve a great share of digital photo graphic market with this new

technological changes in digital photography.

Despite high growth , Kodak failed to anticipate how fast these digital cameras sector is changing, with low profit

margins, many companied entered into the market in mid of 2000 with strong market competition. In 2001 Kodak held

no 2 spot in US digital camera sales just behind Sony. In 2005 Kodak enjoyed high profit margin, fell 18% which is not

apt for current changing market condition and competition with their rival products. This resulted decrease in overall

sales and a disappointed profit in 2005. At the same time digital cameras became undercut by Asian competitors and

they can able to offer very cheap rates. Kodak had 27 percentage market leading share in 1999, that decreased to 15

percentage by 2003. And in 2007 Kodak was No-4 in US digital camera sales with 9.6 percentage market share and

gradually by 2010 it held 7 percentage in seventh place behind Canon, Sony, Nikon and others.

Continuing with these strategic loses in recent 2012 February, Kodak received a warning from the New York stock

exchange notifying it that its average closing price was below $1.00 for 30 consecutive days and that over the next 6

months it must increase closing share price at least $1.00 on the last trading day of each calendar month and have an

average closing price of at least $1 over than 30 trading days prior or it would be delisted from stock market. Earlier in

1997 Kodak share price range was $90, but shares closed at 76 cents on January 3, 2012. In January19, 2012 Kodak

filed for bankruptcy. The company stock was delisted from New York stock exchange. In February 9, 2012 Kodak

announces it will exit from digital image capture business, phasing out its production of digital cameras. Also shut

down the film factories and eliminated 27,000 jobs as it outsourced fir its manufacturing.

From the above case for Kodak we can notice that there was a change management requirement according to the

technological and external market change within the organization during early stage of digital camera era. But

unfortunately the Kodak didn’t proactively respond this environment changes and losses their opportunity to sustain

with other rival organizations.

Reference

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