Vision Statement "The vision of Eastman Kodak is to be a world class company and a leading imaging company in protecting the quality of environment and the health and safety of customers, employees and communities in which company operates its business" (Kodak, 2011). Order my new book The HERO Transformation Playbook. Ultimately, refocusing the business with so many forces in motion proved to be impossible. They sold film, they sold the chemicals you used to develop the film and then they sold … How could a behemoth like Kodak, with abundant resources and some of the biggest talent in the country, fail to take advantage of a technology that was invented inside its own laboratories ? Whether Kodak went into bankruptcy, chapter 11, or something similar they lost their dominent market positions and are struggling to focus their business into profitable areas. Examines Kodak's strategic efforts and … The company filed for bankruptcy protection in 2012, exited legacy businesses and sold off its patents before re-emerging as a sharply smaller company in 2013. I had my penultimate MBA elective at the weekend on Corporate Strategy so my next few posts will concentrate on value creation, value capture and business model architecture. By 1988, Kodak employed over 145,000 workers worldwide. And Kodak totally missed that. So, another explanation is that Kodak invented the technology but didn’t invest in it. Kodak, the company that fueled the growth of the photography industry, is selling its patents. Also Kodak did not understand their customer; for many years their customer had been families and in particular women. Sasson himself told The New York Times that management’s response to his digital camera was “that’s cute – but don’t tell anyone about it.” A good line, but not completely accurate. All rights reserved. Kodak could have licensed their brand to P&G or licenced their technology to other companies, or a combination of both. One business model that is currently succeeding isn’t enough. That criticism perhaps held in early iterations of Kodak’s digital cameras (the $20,000 DCS-100, for example), but Kodak ultimately embraced simplicity, carving out a strong market position with technologies that made it easy to move pictures from cameras to computers. A Kodak engineer, Steve Sasson by name, invented the 1st ever digital camera, in 1975! That same month Facebook plunked down $1 billion to acquire Instagram, the 13-employee company Systrom had co-founded 18 months earlier. In fact, Kodak invested billions to develop a range of digital cameras. Kodak’s action towards the digital world seemed to be the most logical step. Kodak could have been split in a manufacturing division, chemical division and a very profitable research division. Kodak’s first challenge had to do with technology. Consider Fuji Photo Film. "One fatal flaw of Kodak's efforts in photography is they primarily focused on photography," Anthony says. This piece will focus on how Fujifilm changed an element of its business model to adapt to and ultimately leverage the digital revolution. Kodak was once the 800-pound gorilla in the world of photography. Unless the company becomes innovative and move away from the core business model, its chances for survival are minimal. Abstract The introduction of digital imaging in the late 1980s had a disruptive effect on Kodak's traditional business model. How did a company that had pioneered the photographic market in 1880 collapse in just a few short years? Not only was a major technological change upending our competitive landscape; challenges were also affecting the ecosystem we operated in and our organizational model. Using this business model, Kodak was able to generate massive revenues and was able to expand its business and the company to new heights. Contrary to popular opinion Kodak was ahead of the digital technology curve and they saw well ahead of time that digital photography was a game changer. Spotting something and doing something about it are very different things. One option could have been to break up the business. Back in … This would have left Kodak free to focus purely on digital without any distractions. Kodak was a great company that dominated its industry for more than 80 years, making billions in revenues and employing more than a hundred and fifty thousand employees worldwide. Business models are at the heart of corporate strategy and that is why they interest me so much. Learn the right lessons, and you can avoid its fate. Organizational Transformation in the Case of Eastman Kodak Corporation The story we all know goes as follows: Kodak' business model was based on selling films for cameras. It used a razor and razorblade strategy of selling cameras and films to customers. It sold the site to Shutterfly as part of its bankruptcy plan for less than $25 million in April 2012. In the late 90s, Kodak hastily installed 10,000 digital kiosks in Kodak’s partner stores. Kodak had spent over a hundred years and huge resources building a household brand that would have been very attractive to a portfolio brand company such as P&G or Unilever. Before Mark Zuckerberg wrote a line of Facebook’s code, Kodak made a prescient purchase, acquiring a photo sharing site called Ofoto in 2001. Armed with the perfect business model and a strong vertical integration, Kodak innovated and offered some of the best products and services in the imaging business. The camera was as big as a toaster, took 20 seconds to take an image, had low quality, and required complicated connections to a television to view, but it clearly had massive disruptive potential. Subsequent Kodak CEOs were trapped in cognitive inertia: they kept developing new digital technologies without envisioning a new business model for the digital market. Kodak … All rights reserved. Where they failed was in realizing that online photo sharing was the new business, not just a way to expand the printing business. Kodak was so blinded by its success that it completely missed the rise of digital technologies. Kodak's success was based on a business model of genius. Doing something and doing the right thing are also different things. Their failure is usually an inability to truly embrace the new business models the disruptive change opens up. The American icon had the talent, the money, and even the foresight to make the transition. But in the digital market it is a much younger audience who want to share their photos quickly with their friends. The most important priority for a turnaround business is to focus on one thing! This point was highlighted with the case of Kodak’s demise from  Quasi-Monopolist (1888-1976) to bankruptcy protection in 2012. Kodak said this month it would lay off more than 30 employees in November at Eastman Business Park and Kodak Research Labs. Business Model. Kodak had a huge asset in their extensive distribution network with reach into many countries and retailers. Kodak has long been a generous employer and model corporate citizen, a benevolent force in building and supporting Rochester’s social, educational, and cultural institutions. It was so close. From its inception, Kodak dominated the American photography industry.As late as 1976, Kodak commanded 90% of film sales and 85% of camera sales in the U.S., according to a 2005 case study for Harvard Business School. Would now manufacture ingredients for generic drugs digital imaging in the digital market it is a corporation... Photos quickly with their friends model in the year 2000 Kodak could have valued... 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