I don't know. The still photographic film manufacturing part of Eastman Kodak is a relatively small part of Eastman Kodak's business, but I expect that there are targets built into the agreement between them - targets for both sides.
And of course there is a synergy between the other things done by Eastman Kodak's division that makes still film and the still film production itself. So if still film ended, it would affect the profitability of their motion picture film and other coating business - e.g. their growing circuit coating business.
Does the Ford Motor Company have requirements to make cars - could they just decide to make trucks?
Anything is possible, but there are consequences if changes are imposed to existing arrangements.
Both sides being stuck with each other is not good business practice in general.
Both sides being stuck with each other is not good business practice in general. If either side gets dissatisfied for any reason with the other's performance, then what? This also could affect the higher pricing for Kodak films at the retail level. Who decided to start up Ektachrome 100 again? Who has the power to decide these things per the bankruptcy provisions? Who's in charge?
Do you know if EK do the packaging for the non-Kodak branded film ? The lack of finishing capacity seems to be the issue which is driving the shortage of 35mm colour film and the silly prices that are being chargedThe bankruptcy is long over, and has no relevance.
Back at the time of the bankruptcy, Eastman Kodak and Kodak Alaris entered into a contract respecting the distribution and marketing of Kodak branded still film man.
That contract has since been revised, due at least in part to the hugely disruptive role played by a world wide pandemic.
Eastman Kodak has always been free to contract manufacture non-Kodak branded film for sale by others under their name.
They are also now able to sell some other product - e.g. the non-remjet Vision film to Cinestill.
But the marketing and distribution rights for Kodak manufactured, Kodak branded, regular still film in regular packaging designed to be sold in the retail market still belong to Kodak Alaris. Eastman Kodak completely lacks the infrastructure to market and distribute that sort of product.
Do you know if EK do the packaging for the non-Kodak branded film ? The lack of finishing capacity seems to be the issue which is driving the shortage of 35mm colour film and the silly prices that are being charged
Perfectly sensible logic - as long as you're in the business of making, let's say, injection moulded plastic trinkets or galvanized screws, AND you're incapable or unwilling to think beyond economics 101 as taught at Western highschool level. However, in many industries, instances of all sorts of dependencies are extremely common and often unavoidable. In other words: the real world works differently, whether you like it or not.
Name other marriages in business where divorces aren't possible.It is a marriage and they love each other.
Name other marriages in business where divorces aren't possible.
The possibility of getting divorced later on is not necessarily a reason to not get married.
Depending on whom you ask, of course. I know you recently got advice from someone to not go there anymore, but not everyone is equally jaded by some bad experiences. And in business, partnerships ALWAYS come with tension. Again, that's not a reason to not go there.
Like I said, plenty of examples of marriages that worked at least for some time, sometimes even for a very long time, to the benefit of all involved.
You didn't answer the question. Name another business arrangement that cannot end, where both parties are stuck with each other for ever more?
Alan, your question doesn't make sense to me.
If someone were to put a gun to my head, I'd offer an example like ASML and Carl Zeiss SMT. The latter has exclusively made the optics for ASML's lithography equipment, and has been the sole supplier for this critical component for decades now. They're independent companies, but their relationship is a very exclusive one. Although there have been tensions between both companies, which is a matter of course if you're doing business very intimately at the very edges of what's physically possible, they relationship remains a productive and mutually beneficial one for both parties. In fact, it's such a successful relationship that everything we do that involves computer technology ultimately relies on the fruits of this very relationship.
So Zeiss is legally compelled to manufacture what ASML wants?
Maybe if you think of it another way, it'll seem less unusual. Kodak Alaris seems free to sell any product manufactured by anybody and Eastman Kodak seems free to sell its film to anyone they want (as long as it's not then branded Kodak). If you think of it as a brand-licensing arrangement, it's not unusual.
The point is Eastman Kodak cannot get rid of Kodak Alaris.
But Alaris has exclusive representation in perpetuity.
If Alaris's retirees who own Alaris grow in number
So in this relationship, what you brought to the table was an asset (access to a market) that was relatively easy and cheap to imitate or otherwise substitute for the manufacturer. No matter how you negotiated, you held the short straw from the very beginning. This is also why I don't think your example is a useful point of reference for the Alaris/EK alliance, since the assets on both sides appear to be more complementary, valuable and to a large extent partnership-specific. More importantly, the interests of both partners closely align on crucial points. It's a proper alliance, in contrast with the distributorship you were part of.I had an exclusive Greater NYC Area dealership with a building automation manufacturer. After a few years, they decided to open their own branch office in NYC and dumped me. Our contract gave me a year to move on. I should have negotiated a better deal, maybe three years.
Sure they can - when the term of their current agreement is up, they can comply with whatever terms of that agreement mandate about how they end their relationship, and leave.
The business world is full of long term agreements. When Harman bought the assets of Ilford from the receiver, they entered into a 30 year (IIRC) lease for the premises. There are many such long term leases and other business arrangements out there.
The agreement between Kodak Alaris and Eastman Kodak is just that - an agreement. If it is a well crafted agreement, it reflects the needs of both parties. And, most likely, it includes provisions that help provide long term certainty for each party.
Alan, with all due respect, the deal you entered into reflected an imbalance of power. It sounds like a fairly typical example where a larger entity takes advantage of its power over a smaller entity. In the case of Eastman Kodak and Kodak Alaris, the agreement reflected a fairly good balance of power. Eastman Kodak couldn't afford to keep operating their incredibly expensive - bankruptcy inducing expensive! - worldwide distribution and marketing infrastructure. And the Kodak Limited Pension Plan had both cash and the ability to take that on (through the corporation they created - Kodak Alaris), provided that they had access to long term supply of product. As a result of the Agreement, Kodak Alaris became the larger of the two, and Eastman Kodak became the smaller.
I've never seen any evidence of that. Such an agreement is unlikely, because in most jurisdictions "agreements in perpetuity" are unenforceable.
So in this relationship, what you brought to the table was an asset (access to a market) that was relatively easy and cheap to imitate or otherwise substitute for the manufacturer. No matter how you negotiated, you held the short straw from the very beginning. This is also why I don't think your example is a useful point of reference for the Alaris/EK alliance, since the assets on both sides appear to be more complementary, valuable and to a large extent partnership-specific. More importantly, the interests of both partners closely align on crucial points. It's a proper alliance, in contrast with the distributorship you were part of.
In the remainder of your post, you appear to assume that there's opportunistic behavior on either side of the Alaris/EK alliance. We have yet to see firm evidence of this, and it's in fact quite likely this doesn't happen since one partner offering junk film and the other party doing a crap job distributing it would harm both partners' business. The assumption that either party is screwing over the other is one that's commonly made in overly simplistic economics and traces back to basic assumptions about economic actors, such as that they're inherently opportunistic and that they're rational actors (and a host of other assumptions). Time and again, research and practice have shown that these assumptions are often not accurate. Moreover, the reduction of vast and complex entities like these two firms into atomic economic actors and then applying simplistic (and often erroneous) assumptions to them just doesn't make sense. This extends btw to the shareholders of companies, especially in those cases where a company is not publicly traded (and even if it is, not all shareholders are out for short-term gains at the cost of long-term profitability).
Another assumption you appear to make is that the alliance lacks a form of flexibility that would somehow be beneficial to both partners, and by extension for consumers. The problem with reasoning of this kind is that it's equally abstract and if you work out the details, it's just as easily can flip in the opposite direction: i.e. that the partnership is better capable (through its combination of complementary assets etc.) to respond to market dynamics. One particularly strong argument for this view is in the very existence of the alliance in the first place. Apparently, there's a very strong perceived benefit on both sides of the deal to keep it this way.
The conceivable argument that the legal framework between both parties would be the only knot that ties them together, in practice doesn't hold any water. Look at any number of alliances where either party decided to bail out, and you'll find that substantial legal measures were taken to make exactly this very unattractive - and yet, it happens. It's very similar to the situation where you were left in the dust by the building automation manufacturer: even if you had negotiated a better deal, as long as you didn't bring any more valuable bargaining chips to the table, in the end the power imbalance would have played out in their favor. If you run into a long-standing alliance, it always turns out there are strong and lasting ties that keep the parties together, and these ties invariably trace back to things that are both valuable and difficult to imitate or substitute.
Perhaps the above starts to explain my earlier somewhat exasperated responses to your suggestions - and I apologize for the antagonistic formulation of those. I have some difficulty going along in the too shallow assumptions that are being made by you and also others in trying to 'understand' why Kodak film (in particular color film) isn't cheaper than it is. There are very good reasons for this, and opportunistic behavior, price gouging, imbecile management etc. etc. are not the first ones that come to mind.
A partnership is successful until it isn't.
Just what the terms are to break it up in this case is unknown but seems rather limited
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