The End of the Road
KODAK Philippines Bids Adieu To RP
by: Jerry Liao
Talk about pictures and photography, the name KODAK will definitely be around the corner. Yes, the name has been so popular here in the Philippines to the extent that people will say “I-KODAK mo ako” (take my picture), “KODAK-AN Tayo” (group photo) or “Pa-KODAK Tayo” (lets have our picture taken) most of the time rather than using the right terms – that is because the name KODAK became synonymous to pictures.
But like Barbara Streisand’s song “Some Good Things Never Last”, the end of the road has come for KODAK Philippnes. By May 30, 2007 – KODAK Philippines will be officially out of the Philippine market, they will cease their operations here. Reason – Worldwide Cost-Cutting.
Kodak is in the midst of a restructuring designed to drum up more sales of digital picture-taking and home-printing products as consumers switch from traditional snapshots and services to digital technology. And because of this restructuring, Kodak has piled up $2.6 billion in restructuring charges and accumulated $2 billion in net losses over the last 10 quarters.
Last February as part of their cost-cutting measures, KODAK eliminated 3,000 more jobs — bringing its planned tally of layoffs to 28,000 to 30,000 since 2004. By year-end, its work force will slip below 30,000, less than half what it was just three years ago. KODAK’s work force had dipped below 50,000 from a high of 145,300 in 1988.
So why am I writing about this? First is because it’s a big news. KODAK leaving the Philippines after its years of existence in the country says a lot about our business climate. Althought its a worldwide decision, deciding to close down its Philippine operation cast some question in my mind. Why would a company who has been doing business here in the Philippines for years will suddenly pack their bags and ship out just because the company is in a financial fix? Why the Philippines?
Let me share with you a story that will more or less answer the question I raised. I have this friend who travels a lot. This friend of mine is really into fashion. One time, I ask my friend that since he/she is into fashion, I am curious to know where he/she does his/her shopping? This is what my friend said: “I don’t do my shopping here in the Philippines, I do it abroad. It is true that we have the shops of popular and top brands here in the country, but the products they’re selling are not the latest. I go to other Asian countries and they have the latest designs.” From this answer, I hope you’ll get an idea how important is the Philippines in as far their worldwide strategy.
Now that KODAK Philippines is out, does this mean we will not be seeing any new KODAK products? What happens now to the KODAK’s clients? Who will provide the support?
I heard that the KODAK Philippine team has decided to form a new company called “TECHTRENDS” which will act as the local and exclusive distributor of KODAK products. Some may say that it is but normal and a logical choice to have the local team to continue where KODAK Philippines has left off – I beg to disagree and here are my opinions, concerns and questions:
1. What support will this new company get from KODAK who already decided to abandon its operation here in the country? As far as I am concern, Kodak has wiped-out the Philippines in its corporate map.
2. What will happen to the existing distributors if the new group will be the exclusive distributor? What will happen to the efforts of the previous distributors in bringing KODAK products to the market? What happens to their distributorship contracts – will they just be considered null and void?
3. Is it fair that the new group will just take over the clients served by the old distributors? It’s like handing the new group everything in a silver platter. Why is the new group given priority over the existing distributors? Do they have the experience and technical know-how?
4. Did the existing distributors given enough time to adjust with the new setup? Were they informed ahead of time?
5. With all due respect, does the new team have enough capital to supply the needs of the market? Money to buy Kodak products that will sustain them for months since payments will be made in terms (mostly 90 to 120 days). Do they have enough marketing funds to support their channels? Do they have enough manpower to provide support and service to the market? Taking over the operation of KODAK Philippines is no joke. It will entail millions or even billions of pesos. All I am saying is If the new group have the money, they should have setup their own company long time ago and not work for Kodak. We are talking of long-term business here and not short-term.
6. And if the new team fails to perform as expected by KODAK, what will KODAK do? Go back to their old distributors? Do you think the old distributors would want to do business with KODAK again after the abrupt cancellation of distributorship appointments?
7. And how will the distributors, dealers and customers feel regarding the move of this new group – who saw the opportunity, seized it without considering who will get hurt during the entire process. Very cunning and devious if you ask me. Remember, in business – its all about relationship and professionalism.
If my memory serves me right, the same situation happened to KODAK copier when KODAK decided to discontinue its selling efforts for their copiers (I just forgot which country). The local team decided to continue KODAK’s copier operation – and guess what, they folded up after sometime. With all honesty and sincerity, I wish the copier experience will not happen to our local team.
I just want to say that the main reason why KODAK is leaving is because of its restructuring program – technology advancement is forcing KODAK to innovate which they should have done long time ago. Leaving the country does not change a thing, digital technology is already here, will stay and will haunt them for as long their company exist. And the local team should realize that digital imaging technology leaders like Canon, HP, Epson, Sony and others are still here to give them a tough fight. The new team has a lot of catching up to do – and gaining more partners is the key to their success.
Adieu KODAK Philippines and thank you for the memories. I hope you have enough pictures to remember