In the early 1990, Kodak entered Russia.
At that time, Russian consumers had little knowledge of Kodak’s products. Moreover, there was little or no infrastructure in place for distributing photographic equipment and films and for processing film. Kodak gain a competitive advantage as a first mover advantage which is being first to the market and created a new market space with a new product or service, and continued to dominate that segment which is the photography market. A slow pace of market and technology evolution will benefited first mover advantage.
For example, the consumer market for photography was underdeveloped so this is a good opportunity for Kodak entry to the Russia photography market. The entry of Kodak is a perfect message for a consumer market that was not used to photography.Kodak gain competitive advantage by cost leadership. Cost leadership as an advantage occurs when Kodak is able to offer the same quality product as its competitors but at a lower price. For example, Kodak recognizing the limited income of Russian consumers. Consumers were poor and lacked the ability to afford all but the most inexpensive cameras.
Hence, They sell lower-end film and cameras which is more economic and cheaper than other firm company. Kodak offers simple cameras for around $20 to Russian consumers. They can afford to execute this product strategy because the cameras are made locally.
Instead of trying to sell the top quality Kodak Gold film, which is famous in the West, the cheaper brand, Kodak Color Plus, is marketed heavily in Russia.Not only that, Kodak also gain an advantage through the differentiation which is the business often use to set themselves apart from competitors. Kodak began offering new film, similar to its respected Kodak Gold product. The general manager of Kodak in Russia, Thomas D.
Garman, described although the new Kodak color produced with Russian packaging at a cheaper price, as “not quite as high quality” as Kodak Gold, “but better than its competitors.”. They continue with Kodak Gold as their premium product, as Garman said that “We cannot ignore the pressures on consumer spending because people are accepting lower quality because of the lower price, and we had to respond to that.”.
Furthermore, Kodak gain competitive advantage by established a positive brand name. Kodak established the company’s brand image as an enterprise that can be trusted. Kodak also boosted its corporate image by rented a large building in Yaroslavl from Russian photography equipment manufacturer, Slavich, to establish the paper-finishing facility.
In addition to public relations benefit, this may also helped Kodak lower its costs by utilizing cheap Russian labour and by avoiding tariffs on imports of photographic products into Russia. Hence, building a local plant in Russia may helped Kodak gain cost advantages while enhancing corporate reputation. Not only that, Kodak also promoted itself as a company that stand against corruption and black market practices.