Nostalgia fills in our minds when we hear the name “Kodak”, the film and photography giant was one of the most valued brands at the end of the 20th century. Kodak was popular not only for its products but also for its strategy of selling inexpensive cameras, films, chemicals and paper which made it dominate 90% of film sales and 85% of camera sales alone in the U.S.
Everyone wanted to own a Kodak camera but it never realized that its own inventions (Kodak invented the first Digital Camera) could lead to its own downfall, as Kodak was outfitted by Nikon when it came to the Digital Camera modifications. Kodak did not see the digital camera invention as a possible Star Product (BCG Matrix) as it focused on its traditional cash cow products (BCG Matrix) which was the film roll. It spent large amount of capital on R&D for film rolls to make them cheaper, aggressive marketing to slow the shift of digital cameras back to film. The biggest reason of for Kodak losing its dominance was its lack of ability to adapt and change. Kodak and Fujifilm were each others biggest competitors but the difference between them is that Fujifilm re-engineered its business model while Kodak was stubborn with its culture, organization structure and its strategies. Fujifilm at the same time decided to spread its risks by diversifying its product line as it expanded into cosmetics also. Kodak failed to globalize into different markets as it could not forecast and anticipate the consumer behavior and tastes in different countries.
With an old and rusty business model, investors lost hope in Kodak as the share price significantly dropped from 2000. What other businesses need to learn from Kodak is that no matter how big the organization is, it needs to keep itself adapted, moving and transitioning into the new era of change.
Sources:
- “Eastman Kodak.” Wikipedia. Wikimedia Foundation, n.d. Web. 03 Oct. 2015.
- YAKOWICZ, WILL. “Why You Need to Get Employees to Challenge Your Decisions.” Inc.com. Inc, n.d. Web. 03 Oct. 2015. <http://www.inc.com/will-yakowicz/the-reason-why-companies-like-kodak-fail.html>.
- “The Last Kodak Moment?” The Economist. The Economist Newspaper, 14 Jan. 2012. Web. 03 Oct. 2015. <http://www.economist.com/node/21542796>.
- Forbes. Forbes Magazine, n.d. Web. 03 Oct. 2015. <http://www.forbes.com/sites/avidan/2013/08/20/the-death-of-scale-is-kodaks-failure-an-omen-of-things-to-come-for-corporate-america/>
- “Failed Strategies and the Death of Kodak.” MarketWatch. N.p., n.d. Web. 03 Oct. 2015. <http://www.marketwatch.com/story/failed-strategies-and-the-death-of-kodak-2012-08-24>.
