Kodak Case Study

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Kodak Appeals to Court to Terminate 1921 and 1954 Decrees that Restrict Pricing Policies Eastman Kodak Co. is one of the dominant market share holders within the camera and other photography-related industries. Kodak pioneered amateur photography and is often credited for the invention of roll film, and the first camera. The markets for color film and color photofinishing in 1954 were controlled by Kodak. It had over 90% of the amateur color negative film market. 1) What are the decrees affecting Kodak’s actions? Why were they put into place? There were two decrees affecting Kodak’s action: the first one was put into place in 1921, according to which Kodak had to stop imposing different forms of dealing contracts on retailers, divest all of the acquired firms, license its photofinishing processes and technically assist anybody willing to start a photofinishing business. The decree’s main purpose was to provide better conditions for healthy competition in the photo industry. With the development of the color film market, Kodak became its sole leader. The company sold its color film only as a package together with processing. By bundling the cost of film and processing, Kodak effectively monopolized the photofinishing industry. This resulted in the new decree being issued in 1954. The decree was awarded and placed a permanent restriction on Kodak from bundling or otherwise connecting in any manner, the sale of its color films to the photofinishing process. It also required Kodak to divest itself of some of its photo labs. Thus, the decrees of 1921 and 1954 had promoted the development of a competitive market for the sale of films as well as processing. The decrees against Kodak intended to limit its market power and prevent monopolization of the photographic industry. 2) Who are the competitors for Kodak? What market share does Kodak have compared to its
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