Kodak 2014 Annual Report Download - page 13

If we cannot attract, retain and motivate key management and other key employees, Kodak
’s revenue and earnings could be harmed.
In order for us to be successful, we must continue to attract, retain and motivate executives and other key employees, including technical, managerial, marketing, sales,
research and support positions. Hiring and retaining qualified executives, research and engineering professionals, and qualified sales representatives, particularly in Kodak’s
targeted growth markets, are critical to our future. We may be unable to attract and retain highly qualified management and employees, particularly if we do not offer
employment terms competitive with the rest of the market. Failure to attract and retain qualified individuals, key leaders, executives and employees, or failure to develop and
implement a viable succession plan, could result in inadequate depth of institutional knowledge or skill sets, which could adversely affect our business.
If we cannot effectively anticipate technology trends and develop and market new products to respond to changing customer preferences, our revenue, earnings and cash
flow could be adversely affected.
We are a technology company serving imaging for business markets, including packaging, micro 3D printing, graphic communications and enterprise services. Our success in
these markets depends on our ability to offer differentiated solutions to capture market share and grow scale. To enable this, we must continually develop and introduce new
products and services in a timely manner to keep pace with technological developments and achieve customer acceptance. In addition, the services and products that we
provide to customers may not or may no longer meet the needs of our customers as the business models of our customers evolve. Our customers may decide to outsource their
imaging needs or may purchase imaging services and needs from other suppliers. In addition, it is difficult to predict successfully the products and services our customers will
demand. The success of our business depends in part on our ability to identify and respond promptly to changes in customer preferences, expectations and needs. If we do not
timely assess and respond to changing customer expectations, preferences and needs, our financial condition, results of operations or cash flows could be adversely affected.
We must also effectively communicate to our customers, investors, and other key stakeholders our new business model and successfully position our products for the markets
we serve. If we are unable to anticipate new technology trends, develop improvements to the Company’s current technology to address changing customer preferences, and
effectively communicate our businesses, products, and the markets we serve, our revenue, earnings and cash flow could be adversely affected.
We have outsourced a significant portion of Kodak’
s overall worldwide manufacturing, logistics and back office operations and face the risks associated with reliance on
third party suppliers.
We have outsourced a significant portion of our overall worldwide manufacturing, logistics, customer support and administrative operations to third parties. To the extent that
we rely on third party service providers, we face the risk that those third parties may not be able to:
Further, even if Kodak honors its payment and other obligations to its key suppliers of products, components and services, such suppliers may choose to unilaterally withhold
products, components or services, or demand changes in payment terms. In addition, we may experience shortages in supply and disruptions in service as a result of
unexpected demand, transportation and logistical limitations, and/or disruptions or production difficulties at our suppliers such as disruptions due to fires, other natural
disasters or events outside of a supplier’s control. In addition, disruptions could result from a reduction in the number of our suppliers due to their own financial difficulties or
a reduction in the products offered by such suppliers. As a result of the loss of any supplier, or a substantial decrease in the availability of products from our suppliers, we may
be unable to meet our customer commitments, our costs could be higher than planned, and our cash flows and the reliability of the Company’s products could be negatively
impacted. Kodak will vigorously enforce its contractual rights under such circumstances, but there is no guarantee we will be successful in preventing or mitigating the effects
of unilateral actions by our suppliers. Other supplier problems that we could face include electronic component shortages, excess supply, risks related to the duration and
termination of Kodak’s contracts with suppliers for components and materials and risks related to dependency on single source suppliers on favorable terms or at all. The
realization of any of these risks should alternative third party relationships not be established, could cause interruptions in supply or increases in costs that might result in
Kodak’s inability to meet customer demand for our products, damage to our relationships with Kodak’s customers, and reduced market share, all of which could adversely
affect our results of operations and financial condition.
•
develop manufacturing methods appropriate for the Company’s products;
•
maintain an adequate control environment;
•
quickly respond to changes in customer demand for the Company’s products;
•
obtain supplies and materials necessary for the manufacturing process; or
•
mitigate the impact of labor shortages and/or disruptions.
12