Kodak: Digital Photography
Kodak’s current position in digital imaging is focused on three areas:
1. Image capture (digital cameras) – cameras are still not boosting profits, but Kodak has secured 15% of the market, and have boosted advertising spending towards s more integrated marketing effort
2. Services (online photo manipulation) - spent significant dollars on R&D developing software
3. Image output (digital kiosks, inkjet printers, paper and inks) – network of 19,000 kiosks at retail stores are highly profitable and accounted for $200 million in sales, and steady paper sales. They are looking to further raise margins in this area
Would Kodak’s position be different had the company adopted a different digital imaging strategy in the eighties and nineties? Evaluate Kodaks’ strategy starting in the mid-eighties.
Kodak’s position would have been different under different strategies towards digital imaging in the eighties and nineties.
In the eighties (1983 – 1989)
• Kodak failed to recognize the significance of the digital imaging market. They diversified through acquisitions and hiring, to expand market share and to push for R&D to explore new technologies, especially digital imaging. However, they approached it with the same tried and tested methods of operations, and did not want to let go of their focus and success in the film-based market. (E.g. Kodak was first to introduce image sensor, the core element of digital camera, but did not take advantage of it)
• They spent a lot on R&D, launching new products but lacked a central vision or effort towards pushing in the digital camera space.
- 1986 launched various electronic image products and electronic photography division was established
- 1989, introduced more than 50 products involving electronic image capture or conversions
- Kodak had spent $5 billion on R&D costs for digital imaging with no results
• As the leader of the film industry, barrier to entry for competition was high. However when it came to
1. Image capture (digital cameras) – cameras are still not boosting profits, but Kodak has secured 15% of the market, and have boosted advertising spending towards s more integrated marketing effort
2. Services (online photo manipulation) - spent significant dollars on R&D developing software
3. Image output (digital kiosks, inkjet printers, paper and inks) – network of 19,000 kiosks at retail stores are highly profitable and accounted for $200 million in sales, and steady paper sales. They are looking to further raise margins in this area
Would Kodak’s position be different had the company adopted a different digital imaging strategy in the eighties and nineties? Evaluate Kodaks’ strategy starting in the mid-eighties.
Kodak’s position would have been different under different strategies towards digital imaging in the eighties and nineties.
In the eighties (1983 – 1989)
• Kodak failed to recognize the significance of the digital imaging market. They diversified through acquisitions and hiring, to expand market share and to push for R&D to explore new technologies, especially digital imaging. However, they approached it with the same tried and tested methods of operations, and did not want to let go of their focus and success in the film-based market. (E.g. Kodak was first to introduce image sensor, the core element of digital camera, but did not take advantage of it)
• They spent a lot on R&D, launching new products but lacked a central vision or effort towards pushing in the digital camera space.
- 1986 launched various electronic image products and electronic photography division was established
- 1989, introduced more than 50 products involving electronic image capture or conversions
- Kodak had spent $5 billion on R&D costs for digital imaging with no results
• As the leader of the film industry, barrier to entry for competition was high. However when it came to