Kodak

Introduction
Eastman Kodak Company, commonly known as Kodak, is an American technology company focused on imaging solutions and services for businesses. It was founded by George Eastman in 1888. Kodak is best known for photographic film products. During most of the 20th century Kodak held a dominant position in photographic film, and in 1976, had an 89% market share of photographic film sales in the United States. Kodak began to struggle financially in the late 1990s as a result of the decline in sales of photographic film and its slowness in transitioning to digital photography, despite having invented the core technology used in current digital cameras.

Kodaks Failure
Kodak began to struggle financially in the late 1990s as a result of the decline in sales of photographic film and its slowness in transitioning to digital photography Kodak focused on digital photography and digital printing and attempted to generate revenues In January 2012, Kodak filed for Chapter 11 bankruptcy protection In February 2012, Kodak announced that it would cease making digital cameras, pocket video cameras and digital picture frames In August 2012, Kodak announced the intention to sell its photographic film commercial scanners to emerge from bankruptcy

Kodak sold many of its patents for approximately $525,000,000 to a group of companies (including Apple, Google, Facebook)

On September 3, 2013, Kodak emerged from bankruptcy

Kodaks Success
The success of Kodak was based on film and film was an extremely lucrative product. Kodak dominated the film market with 30-40 % of the global market share in the 20th century. The company was also successful because it ensured that the products it sold and especially the cameras were inexpensive and so affordable by most of the customers Another factor that enabled Kodak to be successful was its large loyal market and especially in USA where in the 20th century it had a market share of over 80%.

 The company also ensured that its products were of high quality something which aided it to enhance and protect its market share. Kodak played an important role establishing the need to preserve significant occasions such as family events and vacations. These were labelled Kodak moments, a concept that became entrenched in everyday life.

Reasons For Failure

Kodak did not adapt the digital technology Kodak Failed to forecast the change in the mind-set of people Kodak kept trying to recreate the photography universe of yesteryear Unwilling to let go of the extremely lucrative (gross margins of nearly 70%) film business The company lacked a visionary leadership Another factor that led to the failure of Kodak was the online photo-sharing that took place across the globe Internal conflicts within Kodak

Kodak did not adapt the digital technology

Kodaks top management never fully grasped how the world around them was changing. Kodak always thought that people would never part with hard prints and that people valued film-based photos for their high quality. The leadership of Kodak did not believe that digital technology in the imaging and photography industry would be the factor to determine competitiveness. The company was the first to explore digital technology in the imaging and photographing industry but it failed to incorporate the same in the market.

 By the time the company saw its competitors benefit from the digital technology it had, it began to venture into the same only to find its competitors had already created a loyal customer base making its relatively hard for Kodak to penetrate the market.

Change in the mind-set of people

Kodak had over relied on its loyal customer base such that it overlooked the changes in demand. With digital, a significant shift in mind-set occurred in the meanings associated with cameras. Rather than being identified as a piece of purely photographic equipment, digital cameras came to be seen as electronic gadgets. The cause for Kodaks failure is in not understanding what people take photographs for, but what they do with photos once they have taken them

 With digital devices, newcomers such as Sony were able to bypass one of Kodaks massive strengths: its distribution network. Instead, digital cameras became available in electronic retail outlets next to other gadgets. Kodaks brand came to be associated with traditional photography rather than digital.

Tried to recreate the photography universe of yesteryear

Digital disrupted Kodaks neat equilibrium in yet another important way; women were no longer the main customers, men were. For Kodak, the severing of the link between taking photographs and hardcopy prints was a serious concern. While men took lots of pictures, their role had never been that of family archivists (a role reserved for women). Hence they tended to take pictures that industry insiders called transient.

 Kodak was in uncharted territory and rather than accepting it as the new reality, it kept trying to recreate the photography universe of yesteryear, one based around sentimental images taken by women at family reunions and vacations

Unwilling to let go of the film business

The margins on hardware, i.e. digital cameras was very thin as compared to film. Kodak was unwilling to let go of the extremely lucrative (gross margins of nearly 70%) film business, it tried for many years to prolong the life of film through smaller cameras and digitally coded film and hybrid technologies such as Photo CD. Its digital imaging division, locked up in its headquarters in Rochester, always appeared to be under pressure to create synergies between film and digital.

 The company became resistant to change and insensitive to customers needs and expectations.

The company lacked a visionary leadership

It is largely believed that Kodak failed because it did not adapt the digital technology. Kodak was doing extremely well in the market but its failure can largely be attributed to the leadership. This is because the company at some time lacked a visionary leadership that was able to comprehend the changes that were taking place in the external environment and ensure that the necessary steps were taken.

 Kodak having dominated the imaging and photography industry for long, the company was the first to develop a digital camera way back in 1975. This means that the company had the necessary knowledge, supply chain, workforce and other resources necessary to enhance the companys competitiveness The leadership failed the company because it never came up with the necessary strategies that would enable the company to transit to digital technology without affecting the competitiveness it had created with the initial products.

online photo-sharing
Digital photography is about freedom from printing. People don't print photos anymore -- they share photos online. had the company recognized that customers no longer wanted to print but rather wanted to share online, would have been smart to deemphasize its printer business and build its online property , into something more than just an easy way to upload and print photos. The real future business model for digital photography was destined to be social media.

Internal conflicts within Kodak

Internal conflicts within Kodak also contributed to the failure of the company. This is because there was no unity within the leadership in the way to go with some being dedicated to ensuring that the company retained its old products while another was determined in bringing Kodak to compete effectively within the digital. There were divisions between the digital department and the analogue and all were competing for the same customers. The internal competition favoured the competitors in that during the time Kodak was not able to come up with ways of bridging its past with the changes in the external environment

Methods that could have helped sustain Kodak

If Kodak had remained in touch with the market and changes in demand it would have been able to come up with products that reflected market needs and expectations. Being in touch with the market would also have enabled the company to monitor the activities that are being undertaken by its competitors to create and sustain competitiveness. Kodak should not have entirely relied on the loyal customer base. On the contrary, Kodak should have made use of the loyal customer base to launch new products as the customers trusted the company to come up with quality products.

 The truth is that when it was dabbling in digital versions of its analogue products, Kodak should have also invested in several start-ups based in Silicon Valley. These start ups would have been led by people who get digital. They would not have been the current revenue sources for Kodak. In short, Kodak needed to let the new generation of users and entrepreneurs take charge. It should have embraced uncertainty and be prepared to be driven in unforeseen directionsa far cry from how the company had spent its life.

 Kodak should have been much more willing to allow a convergence between pictures and activities such as social networking or gaming.