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Annual Report 1996


Business Review
Foundations for Growth


Four strategic platforms
In 1996, Polaroid set a decisive course for growth in its consumer imaging, commercial imaging and new imaging businesses. Through the disciplined implementation of four fundamental strategies, Polaroid successfully introduced new products and applications, entered promising new markets worldwide and built sustainable momentum toward accelerated growth in sales and profitability.


c Revitalize the core consumer business:
Innovative marketing and advertising initiatives furthered the revitalization of Polaroid's core instant photography business, creating awareness and fresh interest among a new generation of consumers in mature markets and around the world.
 
c Focus on selected global commercial markets:
New imaging solutions accelerated the development of carefully selected commercial markets. These flexible solutions - employing instant photographic chemistry, digital technology or a combination of the two - targeted the practical needs of customers in such growing markets as secure identification systems, photo retailing, law enforcement, and scientific and business imaging, among others.
 
c Accelerate growth in developing markets:
Polaroid expanded its presence in high-potential developing markets around the world, while limiting associated risks through a prioritized, diversified approach to market selection. Tailored distribution and marketing plans are in place for 11 key developing markets, with new products to meet their unique needs on the fast track for development. Within these markets, the company is building on its strong base in document and identification photography as a springboard for expanding into the consumer market and for entering other profitable commercial market segments.
 
c Develop and grow new imaging businesses:
In 1996, Polaroid began to make effective use of strategic alliances, licensing agreements and joint marketing agreements. These relationships allow Polaroid to strengthen and profit from its brand franchise, extend its technical expertise to new applications and enter new markets, while minimizing additional investments in manufacturing and sales infrastructure. Discussions with many companies have resulted in diverse product and market development opportunities. A significant example is Polaroid's alliance with Sterling Diagnostic Imaging, Inc., to provide sales, marketing, service and hardware manufacturing for Helios Laser Imaging systems. Polaroid continues to manufacture Helios film and will develop new medical diagnostic imaging products and technologies for Sterling.




Tactical initiatives support the strategies
There are a number of major tactical initatives under way which support the four strategic platforms, either directly, like the focus on 11 selected developing markets, or operationally, such as the new product development process, cycle time reduction initative and new customer satisfaction goals.



Global supply chain advancements
Polaroid took significant steps in 1996 to reduce cycle time and accelerate the movement of materials and information through its entire global supply chain. This initiative supports the corporate goals of reducing both manufacturing cycle time and new-product delivery time by 50 percent by the end of 1998, both critical objectives for meeting the fast-changing demands of the marketplace.
    Benchmarked against the best practices of the world's leading companies, this comprehensive effort will produce tangible and continuous improvements in operating efficiency over the next five years in virtually every area of operations, including supplier relationships, inventory reduction and distribution.
    Polaroid also began a targeted consolidation of manufacturing capacity during the year, closing some older plants and expanding activities at newer, underutilized facilities in order to operate more efficiently and reduce expenses.
    Manufacturing established more than 35 specific customer-satisfaction measures covering all aspects of operations, with specific improvement goals for each measure. The organization is meeting or exceeding 90 percent of these goals, in many cases by a wide margin. Elevated customer-satisfaction scores also reflect major improvements in the consistency of product quality.

Carole Uhrich is executive vice president and president, commercial imaging. Prior to this position, she was responsible for global product supply, including manufacturing operations, purchasing, distribution and logistics for Polaroid. Uhrich holds a B.A. and an M.S. in Chemistry from Northeastern University. She joined Polaroid in 1966 as an assistant scientist in engineering.

A focused approach to high-growth markets
Polaroid strengthened its approach to developing markets around the world, concentrating on markets with high growth potential. While still relatively small, this part of Polaroid's business has grown steadily every year since the early 1990s, fueled by tailored strategies for manufacturing and distribution, customized product offerings, tariff reductions and targeted pricing campaigns.
    The 11 selected markets on which Polaroid is focusing - including China, India, Indonesia and Turkey - contain more than half the world's population. Their youthful populations, urban centers, emerging middle classes and family-oriented cultures qualify them as promising markets for many segments of both consumer and commercial imaging.

 The Polaroid System 2000 camera and film were just two of several products introduced in 1996 to meet the customer needs of developing markets.
    In 1996, Polaroid introduced several products designed for these developing markets. For example, the Polaroid System 2000 camera (called the Jin Cai, or "gold treasures"camera, in China), uses a film that better meets the needs of customers in developing markets. One of the first products to result from an improved product development process, Polaroid's new "geo film" is designed specifically to produce excellent results in hot, humid climates. Packages of this special Polaroid 600 Plus instant film are labeled "optimized for hot climates."
    The company also extended consumer advertising and marketing efforts in the developing markets of Brazil, Mexico and Poland with positive results. New advertising will be introduced in China, India and Latin America in 1997.
    The year included the opening of new Polaroid subsidiaries in China and India, the establishment of a new representative office in Thailand and consumer camera manufacturing and a software development center in India. In Indonesia, where sales doubled over 1995, Polaroid established a representative office in Jakarta and a relationship with a new selling company, PT Nuansa Panorama Semesta, which translates into English as "New Beautiful Vision Company."

Marian Stanley is vice president, developing markets. She joined the company in 1967 and has a bachelor's degree from St. Bonaventure University and a master's degree from Boston College. Prior to her current position, she was divisional vice president, Asia Pacific operations. She served as the non-officer employee member of Polaroid's Board of Directors from 1989 to 1993.

Streamlined product development
To ensure a steady stream of new, customer-focused products, Polaroid reorganized the product-development function in 1996. Cross-functional teams, consisting of research, development, marketing and manufacturing, are linked together to deliver greater customer requirements. This new approach supplies the strategic foundation for faster response to shifting market requirements.
    Cross-functional product development aims to decrease time-to-market for new products, while delivering well-targeted, commercially-viable products on time, on budget and according to specification.



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Polaroid Corporation Annual Report 1996
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