Kodak And The Digital Revolution
Bullet Point Summary of Kodak and the Digital Revolution (A) Case Study
Critical Issues surrounding Kodak include the following:
Kodak’s business was based on the famous ‘razor-blade’ model where they would sell cameras cheaply and make huge profit margins on the consumables, the films. This model so deeply rooted in Kodak’s company culture that it didn’t see itself as something else than a film-making company, Kodak was still in the film business and not in the imaging business. Kodak’s critical issue was in failing to change its business strategy to capitalize off the new technology.
Product
Kodak fails to offer clear, distinguishing benefits to consumers. Kodak develops products quickly due to its competitive environment but its timing was way off.
Digital imaging was a disruptive technology that was emerging in early 80’s and Kodak got blind sighted by its extreme focus on existing customers and their needs. They followed a customer focus strategy instead of taking digital imaging as a disruptive innovation. Their focus was to provide products that its existing clients want in a cost effective manner. Kodak’s strategy for digital imaging has been way off and its first digital product, the “Photo CD” which was a failure.
It couldn’t leverage upon world’s first electronic image sensor that they launched earlier that was widely used by computer industry worldwide.
Inability to translate innovation into marketable products.
Diversification
Over a 10 year span, beginning when Kodak was able to achieve about 90% of the film market and 85% of U.S. camera sales Kodak diversified the company by acquiring many companies related and unrelated to the film and digital camera business, in process lost track of its core business.
Management
Kodak’s another issue is its multiple managerial problems. First, the company lacked fresh blood in its management team. All of its CEO’s primarily came from the manufacturing jobs within its own company. This hurt the company
Critical Issues surrounding Kodak include the following:
Kodak’s business was based on the famous ‘razor-blade’ model where they would sell cameras cheaply and make huge profit margins on the consumables, the films. This model so deeply rooted in Kodak’s company culture that it didn’t see itself as something else than a film-making company, Kodak was still in the film business and not in the imaging business. Kodak’s critical issue was in failing to change its business strategy to capitalize off the new technology.
Product
Kodak fails to offer clear, distinguishing benefits to consumers. Kodak develops products quickly due to its competitive environment but its timing was way off.
Digital imaging was a disruptive technology that was emerging in early 80’s and Kodak got blind sighted by its extreme focus on existing customers and their needs. They followed a customer focus strategy instead of taking digital imaging as a disruptive innovation. Their focus was to provide products that its existing clients want in a cost effective manner. Kodak’s strategy for digital imaging has been way off and its first digital product, the “Photo CD” which was a failure.
It couldn’t leverage upon world’s first electronic image sensor that they launched earlier that was widely used by computer industry worldwide.
Inability to translate innovation into marketable products.
Diversification
Over a 10 year span, beginning when Kodak was able to achieve about 90% of the film market and 85% of U.S. camera sales Kodak diversified the company by acquiring many companies related and unrelated to the film and digital camera business, in process lost track of its core business.
Management
Kodak’s another issue is its multiple managerial problems. First, the company lacked fresh blood in its management team. All of its CEO’s primarily came from the manufacturing jobs within its own company. This hurt the company