Kodak+to+Shutter+Camera+Business+by+mengxin

=TITLE OF EXTRACT:= Kodak to Shutter Camera Business

=SOURCE:= http://www.reuters.com/article/2012/02/09/kodak-idUSL2E8D94FS20120209

=DATE EXTRACT WAS WRITTEN:= Feb. 9, 2012

=DATE CURRENT EVENT WAS WRITTEN:= Feb. 23, 2012

=EXPLANATION OF THE ECONOMIC THEORY RELATED TO THE ARTICLE:= Kodak Co. has gone bankrupt and is looking to cut its costs in producing their products by stop making digital cameras, pocket video cameras and digital picture frames. This company became one of the biggest corporate casualties of the digital age because it failed to move along with the development of modern technologies. In just 6 years ago, Kodak was one of the three digital camera makers in the world, but it has focused on desktop printer business more recently because of its mobility of factors of production. Kodak owned 10% of market share in 2006, just coming behind Canon and Sony Corp, while dropped to 7th in 2010, behind Nikon and Samsung. As the quality of digital cameras in cell phones improved, the demand for stand-alone cameras decreased significantly, and mostly limited to only the higher-end market, where Kodak did not compete in. Expecting the company’s exit to generate more than $100 million in annual operating savings, the company will take a charge of about $30 million to leave the business. Kodak eventually collapsed from the pressure of its investors because investors believed margins are higher for products such as photography film and printer ink cartridges rather than cameras. Kodak has decided to improve its margins in the camera business by narrowing its product portfolio, geographies, and retail outlets, however, will continue to offer online and retail photo printing, and desktop printers because it depends on digital technology for ¾ of its revenue.

=VOCABULARY TERMS AND DEFINITIONS:=
 * Cost – the value of money that has been used up to produce something
 * mobility of factors of production – how easy it is to shift producing one product to producing another
 * demand – the desire to own anything, the ability to pay for it, and the willingness to pay for it
 * revenue – income that a company receives from its normal business activities
 * market share – percentage of a market accounted for by a specific entity

=DIAGRAMS:=

=EVALUATION:= I agree with the decision that Kodak made because it is approaching its shut down point because the revenue Kodak is getting is not enough to cover the cost to produce their products. This happened due to the lack of demand for Kodak products. However, Kodak could perhaps have changed that if they tried to get more demand from their consumers. They could have adapted to the market more, and manufacture more high-end cameras. However, the government should have helped with Kodak because hundreds of thousands of people lost their jobs and Kodak had so much influence in history, and still does, so perhaps the government could have given subsidies to Kodak.