Why kodak struggled in the digital marketplace

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. It was so close. Maybe in it would have lured a young engineer from Google named Kevin Systrom to create a mobile version of the site. In real life, unfortunately, Kodak used Ofoto to try to get more people to print digital images. There were other ways in which Kodak could have emerged from the digital disruption of its core business.

The significant problem lied with values, how could Kodak prioritise digital imaging when it posed a major threat to cannibalise their profitable and attractive film business? The view is also supported by the review of disruptive innovation theory by Yu and Hang and the primary solution advised in such cases is to establish an autonomous organisation.

The leadership at Kodak executed several decisions pertaining to a certain strategy and direction for growth and profits over time. Looking at the leadership, achievements and transition phases of Kodak, three separate time periods based on the CEOs after can be considered for this analysis.

The period of to included CEOs Walter Fallon — , Colby Chandler — , and Kay Whitmore — and the interesting observation about of this period is that all the CEOs came from the same manufacturing background within Kodak itself.

Fisher was the first outsider to run Kodak and while he emerged as the strong leader to push Kodak into the digital age, he considerably failed in changing the culture of Kodak. The recent period, after until Kodak filed for Chapter bankruptcy protection in was headed by Antonio Perez as CEO of the company. Ansoff presented a framework that can be used to analyse strategies used by Kodak under different time periods of leadership mentioned above.

And looking at its competitor Fuji that survived because of extreme diversification, one can argue that Kodak did the very best thing. Kodak, during the period of to started off with an ill-conceived process of unrelated diversification by investing in a pharmaceutical firm, the only logic behind being the industry relatedness with its core chemical business.

The company carried on with its unrelated diversification spree, which then was divested to pay off debts, immediately after Fisher came on board in Unlike the previous leadership that believed their core business being chemical, Fisher believed the company was a film and consumer product business.

Fisher initially pursued market penetration strategies by underestimating the digital adoption rate in emerging economies like China. When the strategy failed, Fisher shifted towards product development strategy by looking for network and consumables based business model. The application of matrix suggests business units like the digital camera should be injected with huge cash to maintain their market share.

Overall, Kodak had similar culture over time, and when leaders outside of Kodak background especially Fisher tried changing it, they faced several difficulties.

Unlike other CEOs, Fisher was brought into Kodak from outside of the company with a challenging responsibility of taking Kodak to the digital age. Few of such problems realised from above frameworks include failure of Kodak to change its culture, previous success of Kodak in the film industry that kept Kodak focusing on existing markets with existing products , cognitive inertia, and the compliance built with success over time at Kodak.

Perhaps, an important question today is what innovative companies can learn from the disaster of immensely successful and innovative company like Kodak? Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed. I am a marketer, blogger, and internet entrepreneur. Join my list to connect with me and receive my occasional newsletter and insights. They lost their monopol status. Toggle navigation. Blind to disruptive technology changes in the marketplace. Home Blog Change Management. Tags Disruptive Change. About The Author Torben Rick Experienced senior executive, both at a strategic and operational level, with strong track record in developing, driving and managing business improvement, development and change management.

Next Post. Previous Post. Blog Comments. Most shared post. Social Followers.