Polaroid Corporation Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Introduction

The paper attempts to describe the situation analysis for Polaroid Inc. and discusses the internal and external factors that affect the financials of the company. The paper also attempts to describe the internal analysis through the application of SWOT analysis, whereas, the external analysis through the utilization of Porter’s five forces. Moreover, the paper aims to describe the reposition and turnaround plan for the company along with the determining of metrics to identify the effectiveness of the plan. Moreover, the paper entails to the strengthening of the company and provides recommendations for the future strategies of Polaroid.

Situation Analysis

Ralph Norwood has been appointed as the new treasurer for the company Polaroid. The company was facing an outstanding note of $150 million which would come to mature in less than a year. The company also needed funding for hiring a new CEO and for his restructuring plan for the company. Therefore, for the understanding of the board of directors, Norwood decided to portray a glimpse of the company financial policies and position to the board. The company faced many financial challenges amongst which serving the maturing debt tops the rest. The company has an objective to serve outstanding debt therefore; restructuring of the maturity was a good idea. Similarly, there had not been an equal distribution of total debt for each year.

The treasurer also does not want to see that the company is associated with a junk bonk which might pose a threat to the good image of the company. Norwood considers that the company shall maintain a grading of BBB or higher, anything lower than BBB would worsen the image of the company. Therefore, Norwood considers EBIT as a good measure for credit quality. Revamping and revitalizing the current business environment of the company is also a main issue for the company in order to maintain a competitive advantage for Polaroid. In fact, it is considered as the most important issue at hand as the company has been in the verge of decline due to the increase of different competitors for digital imaging.

Internal and External Factors

SWOT Analysis

Strengths

Polaroid was the first company to enter the instant camera market and is also known as the pioneer of the industry. The company launched the first instant camera in the year 1984. The company’s fastest growing business unit is the camera industry where the company had received a growth sales of $142,000 to $1 billion. The company has a vast business portfolio in their product line. The company was also the first in the market to introduce instant movie camera and film. The patent policy for Polaroid is very strong as a result, the company was able to sue Kodak for disobeying the patent law. The company is facing an increasing number of sales in the Asia Pacific, Canada, and South American region. The company generated a total sale of 9% from the Russian region alone which signifies the strength of Polaroid in the region. The company also had a $150 million line of credit which it used for various purposes.

Weaknesses

There was a small percentage of share price for Polaroid traded which had resulted in limited amount of sales and as well as earnings growth. The company failed to gain an equal market share in the European market where it lost to its competitor, Fuji Company in the product category of digital products and instant camera. Polaroid lacks sufficient funds due to which the company had to face huge cost in the manufacturing of its product in the domestic and as well as in the international market. Therefore, in order to fulfill the sufficient funds demand, if the company issues new bond then it would result in increased debt ratio while the profits for the company will decline. Polaroid was losing the market share in its own domestic market due to strategies implemented.

Opportunities

The new emerging market and economy brings new opportunities for Polaroid as through product extension strategies or to form joint ventures and partnerships with the local firm. There is a lack of infrastructure in the emerging economies which shall be exploited well by the company in order to gain the market share..............................

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