...SIMONA GIORGI Kodak and the Digital Revolution (A) In February 2003, Daniel A. Carp, Kodak’s CEO and chairman, reviewed 2002 sales data with Kodak’s senior executives. Film sales had dropped 5% from 2001 and revenues were down 3%. 2003 did not look any brighter: Carp expected revenues to grow only slightly and net income to remain flat or decrease (see exhibit 1 for information on Kodak’s financial performance and exhibits 2 and 3 for information on sales of cameras and film rolls in the United States). The film industry was “under pressure unlike ever before.” Carp predicted a “fairly long downturn”1 for traditional photography sales as consumers turned to digital cameras, which did not require film. Kodak was moving more of its manufacturing to China, where it could boost film sales, and was planning to slash 2,200 jobs, or 3% of its work force, especially in the photo-finishing business. Carp had received a master’s in business from MIT. He had begun his career at Kodak in 1970 as a statistical analyst. Since then, he had held a variety of positions at Kodak. In 1997, he became president and COO, and was appointed CEO on January 1, 2000. He believed Kodak’s current struggle was one of the toughest it had faced. How could he use digital imaging to revitalize Kodak? Kodak, 1880-1983: A brief history In 1880, George Eastman invented and patented a dry-plate formula and a machine for preparing large numbers of plates. He also founded the Eastman Kodak Company in Rochester...
Words: 8668 - Pages: 35
...MANAGING CHANGE 300 QUESTION 1 Discuss the reason of Kodak’s failure in the “digital revolution” by evaluating the nature of the digital products market Kodak is a 133 year old technology company, and was a world leading in camera film for decade. Today, Kodak is struggling as its facing bankruptcy, and the share price has fallen from as high as $94.75 per share in 1997 to as low as less than 30 cents per share in 2012. This happened as of due to the rise of competition in technology/camera industry, such as digital revolution, people are not using roll film anymore, people are using digital camera, even mobile phone has camera itself. Furthermore, Kodak is change slowly, does not agile, and quick enough. Although Kodak was a leading brand in camera, and had huge image, but it is lacking on the simplicity, means people prefer using digital with memory card as their “film”, and also it is simple, because they do not have to buy the film as the old camera does. In digital revolution, everything is changing. Not only technology, even newspaper and magazines affected, Kodak was one company that affected by digital revolution. However, Kodak does not respond to the changes, moreover Kodak tried to be an innovator in digital camera. Not only slow to change and adapt to change like competitors (Fujifilm, IBM) but also Eastman-kodak invested on digital printers and digital camera at the wrong time when the printing business in declining industry, which is worked. However, they...
Words: 2394 - Pages: 10
...Kodak and the Digital Revolution [pic] [pic][pic]Brief Overview: Kodak is a multinational American corporation which has become a household name most known for its film products. The company has come face to face with many changes due to the digital revolution which has created a rapid changing photography industry. George Eastman began Kodak in 1880 and introduced the first Kodak camera in 1888 coining the slogan “you press the button, we do the rest.” Eastman held a high standard for the company when it came to competition however with many managerial and product line changes, Kodak has slowly fallen behind in the industry. The company has experienced many shortcomings with the most recent trend of digital photography. According to Exhibit 7, from 1998-2002 Kodak was 2nd to Sony in the U.S. for the percent of units sold. The company is now considering layoffs as market share, film sales, and company revenues are down. Problems: § The company is faced with 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 overall and put a damper on keeping up with technological changes and competition as “Kodak avoided anything risky or innovative.” Second, when the company finally did add new blood to its management team things still didn’t look up. CEO Kay Whitmore was added in 1990 and changed the focus to “film based technology” such...
Words: 2832 - Pages: 12
...KODAK and the Digital Revolution 1. Evaluate Kodak's strategy in traditional photography. Why has the company been so successful throughout the history of the industry? Kodak had several core competencies to its advantage. Of primary importance were its “user-friendly” qualities, cost, extensive advertising that helped built its name; perceived quality of its products and its customer focus that lead to strengthening an important core competency i.e. customer satisfaction. Kodak’s leadership also came from marketing and its relationships with retailers (for shelf space and photo-finishing) and also its investments in R & D. During its heyday, its technological capabilities and its rapid design to market cycle times were success factors. Kodak used a razor-blade strategy wherein film was regarded as the consumable so it sold cameras for low cost and profited from increased sales of films. 2. Compare traditional photography to digital imaging. What are the main structural differences in the industry? (Use the 5-forces model) | Traditional | Digital | Rivalry among competing firms in industry | Initially none until 1976 when Fuji came in | High- many companies producing different brands at all price category | Bargaining power of suppliers | Low – since Kodak was their main consumer | ...
Words: 1252 - Pages: 6
...the history, business approaches, management, and marketing of Eastman Kodak and Fujifilm. The paper will compare and contrast the approach to management that each company has pursued in order to embrace innovation. Determine what other management differences have impacted the relative success of Kodak and Fujifilm. Evaluate each company’s approach to ethics and social responsibility and the impact those approaches have had on each company profitability. Discuss the extent to which management of both companies adapted to changing market conditions. Look at three ways any company could build in flexibility to back up its decision-making process in order to adapt to changing market conditions. Describe the history and core of each company. In 1881, Eastman Kodak was first introduced into the business world in 1881 as the Eastman Dry Plate Company in Rochester, New York. George Eastman was the founder and was the first to demonstrate a gelation dry plate versus a wet plate that was used for photography. The company changed its name to the name we all know in 1888, which is Kodak and then a new camera was sold to the public with the brand name. In the beginning Kodak was able to keep up with the changing times and keeping up with technology. They were able to develop new and easier methods to use film development, cameras, printers, and health imaging units until the digital age began. In 2012, Kodak entered Chapter 11 bankruptcy because they lack the ability to adapt to...
Words: 2080 - Pages: 9
...the history, business approaches, management, and marketing of Eastman Kodak and Fujifilm. The paper will compare and contrast the approach to management that each company has pursued in order to embrace innovation. Determine what other management differences have impacted the relative success of Kodak and Fujifilm. Evaluate each company’s approach to ethics and social responsibility and the impact those approaches have had on each company profitability. Discuss the extent to which management of both companies adapted to changing market conditions. Look at three ways any company could build in flexibility to back up its decision-making process in order to adapt to changing market conditions. Describe the history and core of each company. In 1881, Eastman Kodak was first introduced into the business world in 1881 as the Eastman Dry Plate Company in Rochester, New York. George Eastman was the founder and was the first to demonstrate a gelation dry plate versus a wet plate that was used for photography. The company changed its name to the name we all know in 1888, which is Kodak and then a new camera was sold to the public with the brand name. In the beginning Kodak was able to keep up with the changing times and keeping up with technology. They were able to develop new and easier methods to use film development, cameras, printers, and health imaging units until the digital age began. In 2012, Kodak entered Chapter 11 bankruptcy because they lack the ability to adapt to...
Words: 2080 - Pages: 9
...Kodak and the Digital Revolution (Group Assignment) 1. Why has transition to digital technology been so tough? a) The beginning of the transition to digital technology is tough because the quality of digital imaging photos wasn’t as sophisticated as the traditional silver halide photos. The digital camera’s memory is one of the major dependencies since memories were costly that led the low price of digital cameras for attracting consumers. b) Kodak has huge R&D in digital imaging industry, but its entire R&D process for launching new products in the marketing is slow and long. New development for digital imaging technology is very rapid. Steep decline on cameras’ price due to fast pace of new technology and the digital imaging market was very competitive with many new entrants. c) Razor-blade culture was built deeply in Kodak that makes difficult to apply on the digital imaging market. d) Kodak was using the vertical integration strategy with their own R&D and production lines for all their products. It caused significant difficulty entering the digital imaging market where dominant companies for digital imaging were already in this market. e) Kodak had to seek for joint venture or alliance with some market leaders on software, hardware and Internet provider for maintaining a market leader positioning on digital imaging since they are lack of experience in these areas and Kodak couldn’t do everything! These joint venture and alliance become threat of increasing...
Words: 276 - Pages: 2
...The Rise and Fall of Eastman Kodak, an Emblem of American Business Excellence Executive Summary With the slogan "you press the button, we do the rest," George Eastman put the first simple camera into the hands of a world of consumers in 1888. In doing so, he made a complicated process easy to use and accessible to nearly everyone. Since that time, the Eastman Kodak Company has led the way with an abundance of new products and processes to make photography simpler, more useful and more enjoyable. Its reach increasingly involves the use of technology to combine images and information--creating the potential to profoundly change how people and businesses communicate. Kodak continues to expand the ways images touch people's daily lives. The company ranks as a premier multinational corporation, with a brand recognized in virtually every country around the world’’ (kodak.com). However, despite numerous efforts in acquiring new competences and turn around its business model, Kodak has so far failed to impress consumers and stakeholders alike. Facing stiff competition and shrinking profit margins, Kodak seems not able to find its rightful place in the new digital age. This report will shed some light as to why Eastman Kodak has been struggling for years and how it could overcome the challenges it currently faces. kodak manufacturing plant around 1930 RECENT PAST Kodak being a centennial company, it was necessary to take as much distance as possible when trying to analyze its...
Words: 3700 - Pages: 15
...Market In between 1996 and 1997, Kodak held almost 80 percent of the U.S market and their products was selling quite well at that time, people were willing to use their roll film and film camera, and this was the main focus of Kodak during that time. When Fujifilm joined the US market, their target strategy is pried its film just a little bit lower than Kodak’s, since they did that, their market share increased form 10% to 16%, they made a price war to Kodak as their competitive advantage. Still, many people is US preferred use Kodak rather than Fuji, but once consumer tried the Fuji film, they found it was similar products as long as they are cheaper than Kodak’s. Since Kodak should react to the price war, as as Salomon Smith Barney analyst Jonathan Rosenzweig figured that “for every 1 percent cut in Kodak film prices, a 1 percent drop in earnings per share results.” When the market is shifting form film camera to digital, what happens to Kodak? Since Kodak was failure to innovate, when the market was changing, they react themselves very slow. In 1975, Kodak electrical engineer, Steve Sasson invented the first digital camera; on the other hand, the management of Kodak decided to keep this new product, because this digital camera will influence their major products- the film. Later Sony make the digital camera but with high cost. Since the cost of the digital camera was decreasing, more people were willing to purchase digital camera and when Kodak realized the market transforming...
Words: 618 - Pages: 3
...Sukanda Uthairat (01608844) Kodak Case Study 1. What was the basis for Kodak’s success in analog or film photography, and why was it able to maintain its leadership position for so long? In 1884, Kodak roll of film was launched. This was the future innovative product in film business in that era. The first Kodak camera was introduced in 1888. The company distinguished itself and advertised products with the slogan “You press the button, we do the rest.” Kodak focused on customer needs by developing convenient-to-use products. For mass production strategy, the company sold its products by using a razor-blade strategy: low-price camera, but high-profit of film repurchase and having the strong relationship with retailers for selling products and printing photos with Kodak paper. This meant that the company offered customers with complete range of service from photo capturing to photo finishing, resulting in customers’ preference for Kodak rather than higher-quality products from competitors. In order to increase the growth, Kodak also continuously did the research. The company invested in R&D for color film and new cameras to medical imaging and graphic arts. As the result, this technological strength prevented the entry of competitors in the market. Kodak had the largest market share in film market and camera sales by 1976 before the digital era. 2. What are the key ways in which the structure of digital imaging is different from analog or film photography? In photography...
Words: 689 - Pages: 3
...Kodak and the Digital revolution 1. Evaluate Kodak's strategy in traditional photography. Why has the company been so successful throughout the history of the industry? Kodak is known for providing the quality services, innovative products offering the best quality to customers. It developed competitive advantages and satisfied its customers during many years. Kodak has evolved different strategies in the field of traditional photography where it brought innovations and modification. Kodak has a successful history in the industry. According to the case study, the main reason behind the success of Kodak in the industry is its quality. 2. Compare traditional photography to digital imaging. What are the main structural differences? Will digital imaging replace traditional imaging? How have value creation and value appropriation changed in digital photography relative to traditional photography? The digital image consists of a defined set of points called pixels. The traditional image on sensitive material also consists of points or grains of metallic silver. Contrary to the traditional photography, the digital images aren’t using any consumable any more, as the digital image are stock on a memory stick. Digital imaging will replace the traditional photography, because the quality of the digital technology is growing a lot, and digital picture are in line todays need. The demand for the digital products is getting higher day by day. Therefore, it can be very easily...
Words: 647 - Pages: 3
...KODAK AND THE DIGITAL REVOLUTION 1. Why was Kodak able to navigate the shift from black and white to color photography more successfully than the shift from chemical to digital photography? Kodak’s leadership during B&W photography age came from marketing and relationships with retailers. Customers preferred Kodak to other manufactures, some of which who had better products even, because they were satisfied with Kodak’s offerings and didn't feel the need to pay for enhanced products. The low cost cameras fueled Kodak’s growth and profits which helped the company significantly in being able to invest in R&D to develop color film. This was a relatively easy shift for Kodak, compared to its competitors who were not able to make similar investments in R&D. Despite Kodak’s efforts in transforming it into a high-tech company, by expanding markets, re-thinking product development, investing heavily on research and forming alliances with computer executives in the 1990’s, under Fisher’s leadership, Kodak was unable to change the culture of the company from its razor-blade, low cost model. While Kodak’s core business of film faced no competition, they were late entrants in the digital space. Their efforts in trying to do too much was unsuccessful in shifting from chemical to digital photography. 2. Which companies have benefited most from the shift to digital photography over the past 10 years? Over the past 10 years, companies such as Sony, Canon, Nikon, Fuji and...
Words: 438 - Pages: 2
...recognised brands. Indeed for much of the twentieth century Kodak was an American industrial icon , at one point enjoying a similar status as tech giant Apple does today. However, as digital technology changed photography dramatically, Kodak, the former leader in analog film and one of world’s most valuable brands, got left behind and went bankrupt by early 2012. Besides never capitalising on the digital-camera technology it helped create, Kodak also gravely misunderstood the new ways consumers wanted to interact with their photos, the technologies involved, and the market forces surrounding them. By the time Kodak had both feet fully in the digital game, it had been outclassed by more nimble competitors with better products. Kodak invented digital photography. In 1975 Kodak engineer Steve Sasson created the first digital camera, which took photos with 10,000 pixels, or 0.01 megapixels - about a hundredth of the resolution that low-end camera phones have today. Kodak didn't stop there, it worked extensively on digital technology, patenting numerous technologies, many of which are built into the digital cameras of today. In 1995 the company brought its first digital camera to market, the DC40. This was years before many others got into the digital game, but Kodak never took advantage of its early start nor did they market the new technology. Philosophically, the company was steeped in the film business, and to embrace digital meant cannibalising its own lucrative film business. Other...
Words: 952 - Pages: 4
...The case presents us with the problems that Kodak is facing because they have been complacent in maintaining their market, which paved the way for Fuji to encroach on their territories. Kodak has been on top of the market for so long that they did not expect a relative newcomer in the US market to succeed that much. Fuji has the advantage of capitalizing on the support of the Japanese government, as well as an almost monopoly in Japan, which is why Fuji can afford to lower prices in the United States market. Right now Kodak is faced with two main dilemmas, one its competition with Fuji that will become more pronounced since they both plan to enter the lucrative Chinese market, and the bigger problem that is its struggle to stay relevant despite the advent of the digital cameras. By 1998 Kodak was suffering relatively constant declining sales. The only thing that saved them financially that year so they could post a positive net income was the layoff of more than 16,000 employees. This is referenced in the financials by cutting the SG&A Expense by nearly half as compared to that of a year ago. It is mentioned in the article and unclear if the cut in SG&A also was a result of cutting marketing. If that occurred, then as mentioned in the case, it was a business mistake. The second problem with Kodak's is that it has been the industry leader for so long that it developed a collective mindset of invincibility. They did not keep strong tabs of their competitors and if they do notice...
Words: 1876 - Pages: 8
...C. Symonds When Eastman Kodak vowed in 2000 to become a leader in digital cameras, the idea seemed ludicrous. The old-line Rochester (N.Y.) company had film and print all through its DNA. Yet by 2005, Kodak ranked No. 1 in the U.S. in digital camera sales. Its digital sales surged 40%, to $5.7 billion, even as its film-based businesses fell 18%. The key: product innovation, something Kodak knew how to do oh-so-well. The company designed one award-winning breakthrough after another to make digital photography nearly as simple as pointing and clicking. So why does Kodak Chief Executive Antonio M. Perez now dump on digital cameras, calling them a "crappy business"? Simple: While blazing growth of camera sales has helped blunt the effects of Kodak's fast-fading film revenues, it hasn't replaced the rich profits of the film business. Even the best mass-market cameras yield slim profit margins. So, although Kodak's digital camera business was a roaring sales success, it turned out to be a crushing profit disappointment. Perez, who arrived at Kodak in 2003 and became chief executive last year, had championed a dramatic change only to find it wasn't the right model for turning the company around. Now he's crafting yet another strategy for Kodak, its third in less than a decade. Building on the mistakes made and lessons learned in recent years, Perez is attempting innovation of another sort -- reinventing the company's core business model. He aims to make Kodak do for photos what Apple...
Words: 3144 - Pages: 13
