The challenges Kodak faced are not unique, so what can other businesses learn from its failure? Clearly companies that derive a large proportion of their profit from a single product — in Kodak's case film — are more vulnerable.
But having a corporate mindset open to new ideas and able to embrace uncertainty is essential. As the company approaches its th birthday, what will be its legacy? Those precious family albums, perhaps, and our enduring passion for photography. But its impact could have been even greater, and longer-lasting.
Someone might buy the brand and its assets, but Kodak is never going to be Kodak again. This work is licensed under a Creative Commons Licence. If you use this content on your site please link back to this page. Our selection of the week's biggest Cambridge research news and features sent directly to your inbox.
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Annual reports Equality and diversity Media relations A global university. Events Public engagement Jobs Give to Cambridge. Like many successful Japanese manufacturers at the time, Fujifilm was aggressively expanding into new markets and would do so by competing on price at the expense of double digit margins.
As the digital age emerged and each business recognized the eventual death of film, Kodak invested heavily into digital photography while Fujifilm placed its bet on document solutions. Bringing the majority of profits from this business under the Fujifilm umbrella is often cited by the company as the shelter under which they weathered the digital photography storm.
This is a nice illustration of how Fujifilm mixed their revenues out of film products as they began to decline and mixed in revenues from document solutions which though not necessarily growing, was still a relatively stable market. Below is a comparison between Kodak and Fujifilm on a total revenue basis:. In the graph I label Fujifilm as diversifying their business and Kodak as not diversifying. What I mean is that hopping from one technology to another within the same market is not diversifying.
To truly diversify and save their business, Kodak needed to move into other markets that were either growing or stable and that maintained healthy levels of profitability. To do that, old dogs like Kodak must learn some new tricks.
These two issues plague most companies at some point, especially large companies because the laws of corporate physics are so powerful to overcome. This prescription sounds great but sometimes it can be tough to know what market to go into. For help in that regard, sometimes all it takes is thinking about the adjacent spaces near the edges of your business.
To illustrate this, Fujifilm included several examples of adjacent markets they viewed as business growth opportunities. This graphic from their annual report shows how Fujifilm was analyzing where they could expand to within the health care field.
They already provided several health care diagnostic solutions but what if they expanded into preventative care or health treatment products? Just look at Fujifilm for proof of that. The sad part about it is that Kodak supported tens of thousands of people in addition to being a pillar of the Rochester NY community.
Anytime a large company like that begins to fail it impacts a lot of people. The silver lining to the story though is it provides business leaders around the world with a rich story to learn from. CEO I may comment briefly on your interesting post; in particular I may add some findings related to your assumptions concerning the challenges Kodak was facing: Certainly, there was an unwillingness to give up a profitable core business and to move to something else; however, I would suggest that this holds true for every other well-run company facing discontinuous change too.
So in this aspect I would not necessarily identify something specific that had been at work at Kodak. Here I may add that Kodak was neither reluctant nor inert towards diversification. It was cheaper than film photography and the image quality was better. Around that time, a magazine stated that Kodak was being left behind because it was turning a blind spot to new technology.
The marketing team at Kodak tried to convince the managers about the change needed in the company's core principles to achieve success. But Kodak's management committee continued to stick with its outdated idea of relying on film cameras and claimed the reporter who said the statement in the magazine did not have the knowledge to back his proposition.
Kodak failed to realize that its strategy which was effective at one point was now depriving it of success. Rapidly changing technology and market needs negated the strategy. Kodak invested its funds in acquiring many small companies, depleting the money it could have used to promote the sales of digital cameras. When Kodak finally understood and started the sales and the production of digital cameras, it was too late.
Many big companies had already established themselves in the market by then and Kodak couldn't keep pace with the big shots. In the year , Kodak finally announced it would stop the sales of traditional film cameras. Also Read: Why Startups Fail? Case Study on Failed Startups in India. By January , Kodak had used up all of its resources and cash reserves.
On the 19th of January in , Kodak filed for Chapter 11 bankruptcy protection which resulted in the reorganization of the company. The credit enabled Kodak to continue functioning. To generate more revenue, some sections of Kodak were sold to other companies.
Along with this, Kodak decided to stop the production and sales of digital cameras and stepped out of the world of digital photography. It shifted to the sale of camera accessories and the printing of photos. In September , Kodak announced it had emerged from Chapter 11 bankruptcy protection. Celebrated camera accessory manufacturers of yesteryear, Kodak, is looking to join Chinese smartphone manufacturing giant Oppo for an upcoming flagship smartphone. This new smartphone is rumored to have 50MP dual cameras, where the cameras of the device will be modeled upon the old classic camera designs of the Kodak models.
The all-new flagship model of Oppo is designed to be a tribute to the classic Kodak camera design. Furthermore, the phone will also embed a large sensor in its ultrawide camera as well along with a 13MP telephoto lens and a 3MP microscope camera.
The collaborations between Android OEMs and camera makers are not something new. An easy explanation is myopia. Kodak was so blinded by its success that it completely missed the rise of digital technologies. After all, the first prototype of a digital camera was created in by Steve Sasson, an engineer working for … Kodak. The camera was as big as a toaster, took 20 seconds to take an image, had low quality, and required complicated connections to a television to view, but it clearly had massive disruptive potential.
Spotting something and doing something about it are very different things. In fact, Kodak invested billions to develop a range of digital cameras. Doing something and doing the right thing are also different things. The next explanation is that Kodak mismanaged its investment in digital cameras, overshooting the market by trying to match performance of traditional film rather than embrace the simplicity of digital.
All of that is moot, the next argument goes, because the real disruption occurred when cameras merged with phones, and people shifted from printing pictures to posting them on social media and mobile phone apps.
And Kodak totally missed that.
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