BBMM103 Management Principles: Case Study
\nPolaroid – Disruptive Innovation!
\n*The following case study has been written drawing heavily on the information both from the Boston.com Staff website and the official Polaroid website.
\nFigure 1: Dr Ed Land with the SX 70 1972 (Boston.com Staff 2012)
\nBackground
\nPolaroid was founded in 1937 by Dr. Edwin Land, a scientist who managed the company for more than four decades. \u201cDr. Land,\u2019\u2019 as most people referred to him, left Harvard College before graduation to start inventing in a Cambridge garage. In 40 years, Land built up a company that did about $1.4 billion of business all over the world in 1979.
\nHe stuck to his guns, never diversified into other businesses, never sold out to another company, and never borrowed money on a long-term basis.
\nLand was in charge of Polaroid, CEO for 43 years during its transition from a small research and marketing firm into one of the most successful high-tech companies ever. Unfortunately for Land, he was not the type to back down on his ideas. Polaroid in its \u2018hey day\u2019 was the equivalent of \u201cApple\u201d of its times in the 1960s and \u201870s. The company\u2019s profits started declining in the 1980s which eventually led to Polaroid\u2019s bankruptcy in the 2000s.
\nEarly Days
\nThe company, got its start by grafting polarizer technology onto every product imaginable, including 3-D movies and glare-reducing goggles for dogs. As a 22-year-old Harvard dropout in New York, he sneaked into Columbia University labs to invent the artificial polarizer, which splits light waves into separate beams.
\nDuring World War II, Polaroid designed and manufactured numerous products for the armed services including an infrared night viewing device polarizing and coloured filters for rangefinders and periscopes.
\nPolaroid\u2019s first camera was put on sale at Jordan Marsh in downtown Boston just before Christmas 1948 sold for $89.95.
\nBy 1956, Polaroid is distributing its products to more than 45 countries worldwide.
\nFigure 2: The Model 95 Land camera (1948) (Boston.com Staff 2012)
\nInstant Photography \u2013 Disruptive Technology (Innovation)
\nIn 1943, Land was asked by his three-year-old daughter why she could not see the picture he had just taken of her. Her request led to the Polaroid Land Camera in 1948. This was also the moment that Land conceived the idea of an \u2018instant camera\u2019.
\nKodak workers came up with a camera that employed a sticky, peel-away film that the user pulled out of the camera with a string. Then Polaroid started marketing the SX-70 in 1972, which dispensed with the peel-away and automatically ejected the picture from the camera. This camera was produced by Polaroid from 1972 to 1981 (wiki).
\nThis type of camera and film was a disruptive technology (Innovation) that subsequently altered the film and camera industry. This created a new market and value network for Polaroid. It replaced the market for developed film cameras for the \u2018average Joe\u2019, who now could see a picture taken instantly. Developed film cameras became the domain of professionals and hobbyists.
\nKodak, a rival of Polaroid copied the concept and in 1976 introduced the Kodamatic which used a similar film and camera technology to that of Polaroid.
\nPolaroid\u2019s invention of instant photography created a new business line that didn\u2019t just sell cameras. It charged about $1 for each sheet of coated paper that developed into a photograph before people\u2019s eyes. The film sales produced huge profit margins with no competitor to do anything about it.<\/p>\n
Figure 3: SX 70 camera (1972) (Michael Zang 2011)
\nKodak documents showed officials calling Polaroid\u2019s SX-70 camera a \u201cmasterpiece of engineering.\u2019\u2019 Kodak dumped its $94 million investment in a peel-apart instant product in 1972 when it recognized this was \u201cessentially an obsolete product,\u2019\u2019 soon to be replaced by the newer SX-70 technology. Kodak rushed to copy Polaroid, using 30,000 film units and 70 SX-70 cameras.
\nPolaroid announced they were suing the rival film company. Polaroid was fighting back against the inroads of an industrial giant seven times its size. Land claimed that Kodak had stolen its patented inventions to make the new cameras.
\nWhen Kodak first introduced its new cameras in 1976 and Polaroid sued, the instant photography business was about to take off. In the two years that followed \u2013 and in large part because of Kodak\u2019s added advertising \u2013 total sales of instant cameras climbed from 7.4 million cameras in 1976 to 10.3 million in 1977 and 14.3 million in 1978.
\nIn 1977, Polaroid released the \u2018One Step\u201d camera. This was an affordable, fixed-focus camera which became the best-selling camera, instant or developed, in America at the time. In 1977, the company celebrated the 30th anniversary of instant photography with a $100,000 party. More than six million Polaroid cameras were sold that year.
\nThe Decline of Polaroid in the 1980s
\nIn 1981, Land resigned as chairman of the board. He had been the head of the company for more than 40 years. The introduction of Polavision, a colour motion-picture system that made 2\u00bd-minute films in self-developing cassettes, designed to usher in era of home videos did not sell well, and eventually lead to the company writing of $89M and Land\u2019s resignation.
\nPolaroid sought to innovate in the declining market for instant pictures and create newer products despite Land\u2019s absence.
\nPolaroid, poured much of the profits from the instant photography business into high-resolution imaging and electronic imaging systems \u2014 used in everything from computerized X-rays to tamperproof automobile licenses.
\nThe 1980s were not kind to Polaroid, which was trying to reinvent itself by shifting away from a dependence on consumer photography, a market in steady decline. Polaroid was forced to make wholesale changes, including firing thousands of workers and closing local factories.
\nThe Rise of New Technologies in the 1990s
\nOne-hour colour film processing, single-use cameras from competitors, videotape camcorders, and digital cameras \u2014 drastically changed the world of photography. Not only were there more choices for capturing images, but the total cost for each picture had dropped substantially.
\nEdwin Land died in 1991. He ordered his notes and correspondence be destroyed after he retired in 1981. What was left perished in a fire that consumed his home years later.
\n\u201cThe purpose of inventing instant photography was essentially aesthetic,\u2019\u2019 Land said in 1947, announcing the process\u2019s invention.
\nPolaroid laid-off thousands of workers and closed more manufacturing plants. The company shifted into disposable cameras for its instant photos. But this was years after other filmmakers, Kodak and Fujifilm, were already in the market.
\nCost pressures lead the company to indefinitely shelve plans to create a combination camera that produced instant photos and 35-millimeter negatives and another combination camera that yielded instant photos along with digitally stored images.
\nTo keep costs down, the company made virtually all new instant camera and film products in China and other low-wage countries \u2014 a move that prompted Polaroid to close more Massachusetts production facilities. In another streamlining move, the company left its long-time corporate home in Kendall Square for a Polaroid-owned building on Memorial Drive that had been mothballed.
\n2000\u2019s
\nPolaroid released a tiny portable printer in 2001. The company envisioned a way for advertisers such as restaurants and retailers to reach mobile phone users with printouts. That would give Polaroid an additional revenue stream from the new product, along with sales of the device, and refills of printout media.
\nPolaroid filed for bankruptcy in October 2001.
\nThe company announced a plan that gave the top 45 executives bonuses just for staying at their jobs. Meanwhile, other employees were restricted from selling their stock before leaving their jobs.
\nThe employee stock ownership plan was crucial in fending off a hostile company takeover. But as Polaroid\u2019s fortunes waned in the late 1990s, the ESOP became a source of frustration. Employees couldn\u2019t sell their shares until they left the company. As Polaroid\u2019s stock sank, employees saw a big piece of their life savings evaporate. Meanwhile, executives who owned shares outside the plan were free to sell.
\nA group of Minnesota-based investors bought Polaroid\u2019s assets, including the photo collection. Then they declared bankruptcy. The creditors were granted permission to auction off the valuable artefacts in Polaroid\u2019s archives.
\nPolaroid announced that the company would stop producing instant film in 2008. The era of the offhand whirr-whirr-whirr of Polaroids \u2013 push, click, eject; push, click, eject \u2013 was over.
\nPolaroid today
\nAfter Polaroid announced that it would stop producing analog instant film, a group of former employees bought a Polaroid film factory in the Netherlands. The company was called The Impossible Project. The team had to create new colour dyes from scratch. But today, instant photo enthusiasts can order select films online or at a handful of specialty stores.
\nAnalog photographs shifted to digital, but for those who miss the thick, tactile, slightly unreal feeling of a Polaroid, the folks at The Impossible Project are designing a machine that converts digital photos to a physical copy.
\nA successful \u201cKickstarter campaign\u201d was launched recently to capitalize on the growing market for customers tired of staring at their photos on a screen.
\nPerhaps Polaroid still has a role in the future of photography.
\nReferences
\nPolaroid, Available from https:\/\/www.polaroid.com\/history, (February 2019)
\nBoston.com Staff 2012, History of Polaroid and Edward Land, Available from https:\/\/www.boston.com\/uncategorized\/noprimarytagmatch\/2012\/10\/03\/history-of-polaroid-and-edwin-land, (February 2019)
\nMichael Zang 2011, Available from https:\/\/petapixel.com\/2011\/06\/16\/the-story-behind-the-polaroid-sx-70\/, (February 2019)
\nDiscussion Questions (minimum 100 words per question)
\n1. What is meant by the terms internal and external forces for change? Which forces do you think are causes of change at Polaroid?
\n2. As a manager, how would you deal with resistance to change when you suspect employee fears of job loss are well founded?
\n3. How might businesses use the Internet to identify customer needs through open innovation? What do you see as the major advantages and disadvantages of the open innovation approach?
\n4. What is the main corporate culture at Polaroid? Explain.
\n5. What type of management approach did Polaroid have? Consider the lecture on the Evolution of Management.
\n6. Where does Dr. Edward Land\u2019s leadership fall on the Blake Mouton Leadership Grid? Explain.
\n7. What are the driving and restraining forces of a change you would like to make in your life? Do you believe understanding force-field analysis can help you more effectively implement a significant change in your own behaviour?
\n8. Write one goal Polaroid could have implemented using the SMART principle when the companies\u2019 profits were declining.
\n9. Does Polaroid have a future? Discuss. (hint: research companies that have reinvented themselves)
\n10. Which of the three competitive strategies \u2013 differentiation, cost leadership, or focus \u2013 best explains Polaroid strategy?
\nAssignment Paper 2
\nBB103 Management Principles
\nSchool Business
\nCourse Name Bachelor of Business
\nUnit Code BB103
\nUnit Title Management Principles
\nTrimester Trimester 1, 2019
\nAssessment Author A\/Prof Venkatesh Mahadevan
\nAssessment Type Group
\nAssessment Title Report and Presentation
\nUnit Learning
\nOutcomes
\nAddressed: a-e
\na. Explain key management theories that inform contemporary practices
\nb. Examine contemporary issues faced by managers in different levels of an organisation
\nc. Analyse a management issue and justify recommendations based on new knowledge of management theories
\nd. Work effectively with others in diverse management contexts
\ne. Identify and evaluate social responsibility and ethical issues in business situations
\nWeight 25% (Report 15% and Presentation 10%)
\nTotal Marks 25
\nWord limit 2500
\nRelease Date Week Four
\nDue Date Week Eleven
\nSubmission Guidelines \u2022 All work must be submitted on Moodle by the due date along with a completed Assignment Cover Page.
\n\u2022 The assignment must be in MS Word format, 1.5 spacing, 11-pt Calibri (Body) font and 2 cm margins on all four sides of your page with appropriate section headings.
\n\u2022 Reference sources must be cited in the text of the report, and listed appropriately at the end in a reference list using APA 6th edition for the School of Business.
\nExtension If an extension of time to submit work is required, an Application for Special Consideration and supporting documentation must be submitted directly to the School’s Administration Officer via your MIT AMS login
\n[https:\/\/online.mit.edu.au\/ams\/default.aspx?ReturnUrl=%2fams%2f]. You must submit this application no later than three working days after the due date of the specific piece of assessment or the examination for which you are seeking Special Consideration.
\nFurther information is available at:
\nhttps:\/\/monkessays.com\/write-my-essay\/mit.edu.au\/about-mit\/institute-publications\/policies-procedures-andguidelines\/specialconsiderationdeferment
\nAcademic
\nMisconduct
\nAcademic Misconduct is a serious offence. Depending on the seriousness of the case, penalties can vary from a written warning or zero marks to exclusion from the course or rescinding the degree. Students should make themselves familiar with the full policy and procedure available at: https:\/\/monkessays.com\/write-my-essay\/mit.edu.au\/about-mit\/institute-
\npublications\/policies-procedures-and-guidelines\/Plagiarism-Academic-Misconduct-
\n\u00a9 MIT March 2019 T3-2018 v1
\nPolicy-Procedure. For further information, please refer to the Academic Integrity Section in your Unit Description.<\/p>\n
ASSIGNMENT DESCRIPTION:
\nDETAILS OF ASSESSABLE TASKS
\nMajor Assignment (to be done in groups of 3\u2019s) = 15% Written Report & 10% In class Presentation
\nDue Before Class: Week 11 (Report) and Week 11 (Presentation)
\nThis is a group assignment. The groups should consist of a minimum of three students and a maximum of four students. Then you are required to read the case scenario based on the sources given including the reference list and make sure you identify the general management issues covered by the case scenarios.
\nSpend time researching (Newspaper articles, Business magazines, plus any other suitable non-peer review articles and peer-review articles from library search engines like Emerald and Ebscohost) in relation to the pharmaceutical industry, and use for example Porter\u2019s 5 Forces to analyse external environment, identify each of the retail companies (Priceline, Chemist Warehouse and Amcal\u2019s Corporate and Strategic Business Strategies). Then research management theories, expert Blogs, write-ups (very important to put in your citations to show evidence basis proof) on suitable current management principles\u2019 practice to help you fully discuss, analyse, evaluate and provide justifications to the case questions and prepare your answers succulently.
\nThis assignment requires the students to write a report on the key Management unit in the pharmaceutical industry context. The students will need to use relevant topic (sample nursing essay examples by the best nursing assignment writing service)s learned in the management principles unit, analyse management practices and evaluate what actions are required to resolve major issues faced the three major competitors. You are also required to read the assignment narrative and researched information from different sources including annual reports of the companies, industry reports and other reliable resources.
\nThe report should be structured as:
\nExecutive Summary
\nContent Page
\n\u2022 Introduction \u2022 Major issues
\n\u2022 Management theories related to case scenario analysis
\n\u2022 Analysis of Priceline, Chemist Warehouse and Amcal\u2019s Corporate & Business Strategies \u2022 Current Management practices
\n\u2022 Full discussion of the answers to case questions using appropriate theories to support your discussions and justifications
\n\u2022 Assessment of suggested solutions to overcome major issues
\n\u2022 Recommendations with action plan and Conclusion
\n\u2022 References {at least 10 academic sources of information such as peer-reviewed journals, and (5 industry and\/or government reports, books chapters, annual reports and other valid sources)}
\n\u2022 Appendices
\nPlease discuss with your lecturer and tutor for any further clarification.
\nThe report must be uploaded (Submitted) at the start of class in Week 11 commencing. Late submission will be penalised at the rate of 10% of available marks per day or part thereof. The presentation of this report should be on power point and must be done in a professional manner in Week 11.
\nThe following context has been created for your group assignment based on the sources given in the reference list:
\nAPI doubts Sigma plans as merger hopes end
\nBy AAP
\nMar 13th, 2019
\nThe proposed merger between the owners of the Priceline and Amcal pharmacy chains is off after Sigma Healthcare rebuffed an approach by its rival.
\nAmcal owner Sigma, which is restructuring after losing a contract to supply Chemist Warehouse, said on Wednesday that October’s cash-and-scrip approach by Australian Pharmaceuticals Industries had undervalued its long-term prospects.
\nInstead of responding with an increased offer, API questioned Sigma’s plans and said it would now decide what to do with the 12.85 per cent stake it bought late last year.
\n-The Sigma Board has chosen a path to restructure its significantly downsized business, rather than pursue a merger to create a future that benefits consumers, pharmacists and both sets of shareholders,- API said.
\nSigma said it agreed the tie-up could save the combined company $60 million a year through supply chain consolidation, but that a business review completed last month found $100 million in potential savings through cost-cutting as a stand-alone company.
\nIt also said that a decline in API’s share price also meant the offer was worth 12 per cent less than when it was made in October.
\nThe offer was worth about $727 million when it was made public in December.
\nAPI countered by saying the cost savings that Sigma was citing were uncertain and unclear, and would mostly be offset by revenue lost by Chemist Warehouse’s decision to take its business elsewhere.
\nIt also pointed out its offer represented a 41.8 per cent premium to the average price of Sigma shares in the month before the offer was announced.
\n-API notes that very little information has been provided by Sigma in relation to its intended restructure,- API said.
\nSigma shares slumped on the development, dropping 14 per cent to 52.5 cents by 1423 AEDT, their lowest since before the merger proposal was made public.
\nAPI shares were down 3.57 per cent, at $1.35.
\nSigma is the owner of franchise brands Amcal, Chemist King, Discount Drugs and Guardian.
\nAPI owns the Priceline, Soul Pattinson and Pharmacist Advice brands.
\nhttps:\/\/finance.nine.com.au\/2019\/03\/13\/10\/18\/sigma-healthcare-rejects-api-merger-offer
\nReference List Sources:
\nhttps:\/\/www.canstarblue.com.au\/stores-
\nservices\/pharmacies\/https:\/\/www.professionalpharmacists.com.au\/2018-community-pharmacistsreport\/
\nhttps:\/\/www.commbank.com.au\/content\/dam\/commbank\/assets\/corporate\/industries\/pharmacyinsights-report-2018.pdf<\/p>\n
Sigma hit by competitor\u2019s blow<\/a><\/p><\/blockquote>\n