kodak strategy case study

• Data, AI, & Machine Learning
• Managing Technology
• Social Responsibility
• Workplace, Teams, & Culture
• AI & Machine Learning
• Diversity & Inclusion
• Big ideas Research Projects
• Artificial Intelligence and Business Strategy
• Responsible AI
• Future of the Workforce
• Future of Leadership
• All Research Projects
• AI in Action
• Most Popular
• The Truth Behind the Nursing Crisis
• Work/23: The Big Shift
• Coaching for the Future-Forward Leader
• Measuring Culture

The spring 2024 issue’s special report looks at how to take advantage of market opportunities in the digital space, and provides advice on building culture and friendships at work; maximizing the benefits of LLMs, corporate venture capital initiatives, and innovation contests; and scaling automation and digital health platform.

• Past Issues
• Upcoming Events
• Video Archive
• Me, Myself, and AI
• Three Big Points

The Real Lessons From Kodak’s Decline

Eastman kodak is often mischaracterized as a company whose managers didn’t recognize soon enough that digital technology would decimate its traditional business. however, what really happened at kodak is much more complicated — and instructive..

• Leading Change
• Business Models
• Developing Strategy
• Technology Innovation Strategy

Eastman Kodak Co. is often cited as an iconic example of a company that failed to grasp the significance of a technological transition that threatened its business. After decades of being an undisputed world leader in film photography, Kodak built the first digital camera back in 1975. But then, the story goes, the company couldn’t see the fundamental shift (in its particular case, from analog to digital technology) that was happening right under its nose.

The big problem with this version of events is that it’s wrong. Moreover, it obscures some important lessons that other companies can learn from. To begin with, senior leaders at Kodak were acutely aware of the approaching storm. I know because I arrived at Kodak from Silicon Valley in mid-1997, just as digital photography was taking off. Management was constantly tracking the rate at which digital media was replacing film. But several factors made it exceedingly difficult for Kodak to shift gears and emerge with a consumer franchise that would be sustainable over the long term. Not only was a major technological change upending our competitive landscape; challenges were also affecting the ecosystem we operated in and our organizational model. Ultimately, refocusing the business with so many forces in motion proved to be impossible.

A Difficult Technology Transition

Kodak’s first challenge had to do with technology. Over the course of more than a century, Kodak and a small number of its competitors had developed and refined manufacturing processes that enabled consumers to capture and preserve images for a lifetime. Color film was an extremely complex product to manufacture. The 60-inch “wide rolls” of plastic base material had to be coated with as many as 24 layers of sophisticated chemicals: photosensitizers, dyes, couplers, and other materials deposited at precise thicknesses while traveling at 300 feet per minute. Wide rolls had to be changed over and spliced continuously in real time; the coated film had to be cut to size and packaged — all in the dark. With film, the entry barriers were high. Only two competitors — Fujifilm and Agfa-Gevaert — had enough expertise and production scale to challenge Kodak seriously.

The transition from analog to digital imaging brought several challenges. First, digital imaging was based on a general-purpose semiconductor technology platform that had nothing to do with film manufacturing — it had its own scale and learning curves. The broad applicability of the technology platform meant that it could be scaled up in numerous high-volume markets (such as microprocessors, logic circuits, and communications chips) apart from digital imaging. Suppliers selling components offered the technology to anyone who would pay, and there were few entry barriers. What’s more, digital technology is modular. A good engineer could buy all the building blocks and put together a camera. These building blocks abstracted almost all the technology required, so you no longer needed a lot of experience and specialized skills.

Semiconductor technology was well outside of Kodak’s core know-how and organizational capabilities. Even though the company invested lots of money in the basic research and manufacturing of solid-state semiconductor image sensors and developed some notable inventions (including the color filter array that is used on virtually every color image sensor), it had little hope of being a competitive volume supplier of image sensor components, and it was difficult for Kodak to offer something distinctive. Contrast this with Sony Corp., which entered the sensor business to support its electronic video recording business. As an electronics company, its organizational capabilities were far more aligned with what was needed to succeed. What’s more, it jumped in early.

But Sony and other Japanese consumer electronic companies also had to adjust to the changes brought on by digital technology. Sony’s Trinitron color television, once a category leader, was overrun by “plug-and-play” modular digital components — in this case, liquid crystal displays, flat panel displays, and TV chips that made designing a television set easier. As Yukio Shohtoku, retired executive vice president of Panasonic Corp. explained to me, modularization “makes consumer products, our consumer products, a commodity.”

Once consumer electronic products transitioned to digital, Shohtoku noted, leading brands such as Panasonic and Sony lost their competitive edge in those markets. This explains how hundreds of companies, many of them startups, could move into imaging and how a company such as GoPro Inc., based in San Mateo, California, could appear out of nowhere and take the consumer video recorder market by storm. It’s a situation that many makers of technology products are now facing or may soon face.

Scaling Down Is Hard

While the technology presented one set of problems, figuring out how to manage declining film sales while trying to extract maximum profits presented another. Growing companies learn how to invest in manufacturing efficiency and in achieving scale economies. As volumes increase, unit costs go down and capital efficiency improves. But scaling down is hard to do. It helps if your capital base is fully depreciated, but what if you have to reduce the size of your production runs? At a certain point, you just don’t have enough volume anymore to absorb your fixed costs.

In Kodak’s case, film had a finite shelf life, so as sales declined, the company had to figure out how to shrink the size of production batches without driving unit costs up too far or forcing the selling price up, which would have led to a death spiral. I remember when the yearly sales of a particular type of Kodak film went below a single wide, roll production batch. Shrinking the run length would drive up the proportion of time and materials expended in setup, and shifting to smaller production lines would incur additional capital expense, something that would have been impossible to justify. Having a product line made up of many film types worked well when sales were going up but worked against the company as volumes shrank. Discontinuing products pushed film photographers (especially professionals) to digital, and it further drove down cost absorption. For a while, Kodak was fortunate that motion picture print film manufacturing was able to absorb a huge proportion of factory overhead. But when theaters finally moved to digital projection, the company couldn’t slash costs fast enough to keep up with declining volumes.

Declining scale was also a big problem for Kodak in its retail distribution network. Once the volume of film sales at retail stores started to drop, holding onto shelf space became harder. This is not a unique problem — it happens in other markets that are being affected by low-cost imports, market fragmentation, or the cyclical decline of products as newer, more sophisticated products are introduced. But in Kodak’s case, the category was disappearing. For many years, Kodak management was careful not to talk about the problem publicly to prevent it from becoming a self-fulfilling prophecy (something critics misconstrued as management not grasping the gravity of the situation). One could argue that exiting the business and forcing consumers to transition to new solutions was the right way to go. But that would have required Kodak to give up billions of dollars in profits and abandon products like motion picture print distribution too soon, without having other products to capture the demand.

Ecosystem Troubles

The third part of Kodak’s problem had to do with its ecosystem. Much has been written about the importance of building an ecosystem when a new product or service has to leverage complementary assets. Kodak built a unique and powerful ecosystem to support film-based photography. While the majority of its profits came from manufacturing and selling film, retail partners made large profits from photo finishing. For retailers, it was a wonderful business because it brought customers into their stores multiple times: first to purchase film, then to drop off exposed film for developing and printing, and finally to pick up the prints. Each visit brought ancillary purchases, and photofinishing was one of the top two or three profit generators for many retailers and chain stores. But the end of analog imaging was bringing this golden era to an end.

In hindsight, there were two ecosystem design problems. First, as analog photography declined, there was no reason for retailers to be loyal to Kodak products; many were just as happy to use chemicals and paper from Fuji. Second, Kodak management didn’t fully recognize that the rise of digital imaging would have dire consequences for the future of photo printing.

Organizational Inertia?

Kodak management has been criticized for compromising its digital efforts because it wanted to protect film. But the criticism is overblown. Responding to recommendations from management experts, from the mid-1990s to 2003 the company set up a separate division (which I ran) charged with tackling the digital opportunity. Not constrained by any legacy assets or practices, the new division was able to build a leading market share position in digital cameras — a position that was essentially decimated soon thereafter when smartphones with built-in cameras overtook the market.

A complicated and emotional issue was how to deal with the thousands of people in the legacy businesses that were destined to shrink. Most of the individuals in question knew they didn’t have the right skills for the new businesses; their jobs were to maximize profits from the declining businesses for as long as possible. A few people could make the transition, but the truth is that commoditized digital businesses tend to have lower profit margins and can’t afford to carry a lot of costs — particularly legacy costs.

The organizational challenge was even more pronounced at a senior level. For many managers of legacy businesses, the survival instinct kicked in. Some who had worked at Kodak for decades felt they were entitled to be reassigned to the new businesses, or wished to control sales channels for digital products. But that just fueled internal strife. Kodak ended up merging the consumer digital, professional, and legacy consumer film divisions in 2003. Kodak then tried to make inroads in the inkjet printing business, spending heavily to compete with fortified incumbents such as HP, Canon, and Epson. But the effort failed, and Kodak exited the printer business after it filed for Chapter 11 bankruptcy reorganization in 2012.

What Might Kodak Have Done?

With the benefit of hindsight, it’s interesting to ask how Kodak might have been able to achieve a different outcome. One argument is that the company could have tried to compete on capabilities rather than on the markets it was in. This would have meant directing its skills in complex organic chemistry and high-speed coating toward other products involving complex materials — a path followed successfully by Fuji. However, this would have meant walking away from a great consumer franchise. That’s not the logic that managers learn at business schools, and it would have been a hard pill for Kodak leaders to swallow.

For Kodak, it might also have meant holding on to Eastman Chemical Co., a unit it spun off in 1994. After emerging from Chapter 11 bankruptcy protection in 2013, Kodak chose to stand its ground in the imaging business. Today, it is a much smaller company that sells products such as commercial printing solutions, while Eastman Chemical, based in Kingsport, Tennessee, has become a major player in industrial chemicals, fibers, and plastics. (Ironically, Eastman Chemical might end up being George Eastman’s most lasting legacy.)

Yet another potential path for Kodak might have been proactively exiting its legacy businesses in a timely way, as IBM Corp. did. From the early 1990s through the 2000s, IBM managed to do this very efficiently, exiting markets that included printer manufacturing, flat panel displays, personal computers, and disk drives. For the company that’s doing the exiting, exiting legacy businesses is an opportunity to restructure and shed a lot of costs. Kodak eventually did this with its consumer film business, which is now owned by Kodak’s U.K. pension plan. But for an organization exiting its traditional business, the real challenge is keeping an innovation pipeline full of new products and services that can replace the old ones. As Kodak has shown, that can be a formidable challenge.

Lessons for Managers

Every situation is different, but the experiences of Kodak suggest some sobering questions for managers in industries undergoing substantial technology-driven change. Among them are:

Is our core technology converging to the point of being replaced by a general-purpose technology platform? If so, the company could lose manufacturing scale and early-mover advantages — such as being far down the legacy manufacturing learning curve.

Is the technology that underpins our business likely to shift to a digital/modular platform that will lower barriers to entry? If so, commoditization pressure will be inevitable, and the company must prepare to live on much lower margins.

Do we have a capital-intensive legacy business? If so, can we develop a strategy for scaling down production volumes that is both capital efficient and keeps production costs from rising excessively? This is key to maximizing cash flow while trying to execute a transition. It will involve using older equipment or repurposing production assets to make alternate products.

How does the balance of power in our ecosystem change as technology shifts impact different parts of the value chain differently? Will the interests of partners cause our company to do things that are contrary to its long-term interests? This requires thinking about how ecosystem partners will manage the transition and adjusting strategy accordingly.

About the Author

Willy Shih is the Robert and Jane Cizik Professor of Management Practice in Business Administration at Harvard Business School. From 1997 to 2003 he was a senior vice president at Eastman Kodak Co. and served as president of the company’s consumer digital business.

More Like This

Add a comment cancel reply.

You must sign in to post a comment. First time here? Sign up for a free account : Comment on articles and get access to many more articles.

Comments (18)

Craig mcgowan, stephen waybright, giovanbattista testolin, karl schubert, arthur weiss, julian koor, victor yodaiken, john krienke, jeffrey hardy, butch cunnings, charles h. green.

More From Forbes

How kodak failed.

• Share to Facebook
• Share to Twitter
• Share to Linkedin

(Update 1-19-2012 — Kodak has filed for bankruptcy protection .)

There are few corporate blunders as staggering as Kodak’s missed opportunities in digital photography, a technology that it invented. This strategic failure was the direct cause of Kodak’s decades-long decline as digital photography destroyed its film-based business model.

A new book by my Devil’s Advocate Group colleague, Vince Barabba , a former Kodak executive, offers insight on the choices that set Kodak on the path to bankruptcy. Barabba’s book, “ The Decision Loom: A Design for Interactive Decision-Making in Organizations ,” also offers sage advice for how other organizations grappling with disruptive technologies might avoid their own Kodak moments.

Steve Sasson, the Kodak engineer who invented the first digital camera in 1975, characterized the initial corporate response to his invention this way:

But it was filmless photography, so management’s reaction was, ‘that’s cute—but don’t tell anyone about it.’ via The New York Times (5/2/2008)

Kodak management’s inability to see digital photography as a disruptive technology, even as its researchers extended the boundaries of the technology, would continue for decades. As late as 2007, a Kodak marketing video felt the need to trumpet that “Kodak is back “ and that Kodak “wasn’t going to play grab ass anymore” with digital.

To understand how Kodak could stay in denial for so long, let me go back to a story that Vince Barabba recounts from 1981, when he was Kodak’s head of market intelligence. Around the time that Sony introduced the first electronic camera, one of Kodak’s largest retailer photo finishers asked him whether they should be concerned about digital photography. With the support of Kodak’s CEO, Barabba conducted a very extensive research effort that looked at the core technologies and likely adoption curves around silver halide film versus digital photography.

The results of the study produced both “bad” and “good” news. The “bad” news was that digital photography had the potential capability to replace Kodak’s established film based business. The “good” news was that it would take some time for that to occur and that Kodak had roughly ten years to prepare for the transition.

Gado via Getty Images

The study’s projections were based on numerous factors, including: the cost of digital photography equipment; the quality of images and prints; and the interoperability of various components, such as cameras, displays, and printers. All pointed to the conclusion that adoption of digital photography would be minimal and non-threatening for a time. History proved the study’s conclusions to be remarkably accurate, both in the short and long term.

The problem is that, during its 10-year window of opportunity, Kodak did little to prepare for the later disruption. In fact, Kodak made exactly the mistake that George Eastman, its founder, avoided twice before, when he gave up a profitable dry-plate business to move to film and when he invested in color film even though it was demonstrably inferior to black and white film (which Kodak dominated).

Barabba left Kodak in 1985 but remained close to its senior management. Thus he got a close look at the fact that, rather than prepare for the time when digital photography would replace film, as Eastman had with prior disruptive technologies, Kodak choose to use digital to improve the quality of film.

This strategy continued even though, in 1986, Kodak’s research labs developed the first mega-pixel camera, one of the milestones that Barabba’s study had forecasted as a tipping point in terms of the viability of standalone digital photography.

The choice to use digital as a prop for the film business culminated in the 1996 introduction of the Advantix Preview film and camera system, which Kodak spent more than $500M to develop and launch. One of the key features of the Advantix system was that it allowed users to preview their shots and indicate how many prints they wanted. The Advantix Preview could do that because it was a digital camera. Yet it still used film and emphasized print because Kodak was in the photo film, chemical and paper business. Advantix flopped. Why buy a digital camera and still pay for film and prints? Kodak wrote off almost the entire cost of development.

As Paul Carroll and I describe in " Billion-Dollar Lessons: What You Can Learn From The Most Inexcusable Business Failures of the Last 25 Years ," Kodak also suffered several other significant, self-inflicted wounds in those pivotal years:

In 1988, Kodak bought Sterling Drug for $5.1B, deciding that it was really a chemical business, with a part of that business being a photography company. Kodak soon learned that chemically treated photo paper isn’t really all that similar to hormonal agents and cardiovascular drugs, and it sold Sterling in pieces, for about half of the original purchase price.

In 1989, the Kodak board of directors had a chance to take make a course change when Colby Chandler, the CEO, retired. The choices came down to Phil Samper and Kay R. Whitmore. Whitmore represented the traditional film business, where he had moved up the rank for three decades. Samper had a deep appreciation for digital technology. The board chose Whitmore. As the New York Times reported at the time,

Mr. Whitmore said he would make sure Kodak stayed closer to its core businesses in film and photographic chemicals. via The New York Times (12/9/1989)

Samper resigned and would demonstrate his grasp of the digital world in later roles as president of Sun Microsystems and then CEO of Cray Research. Whitmore lasted a little more than three years, before the board fired him in 1993.

For more than another decade, a series of new Kodak CEOs would bemoan his predecessor’s failure to transform the organization to digital, declare his own intention to do so, and proceed to fail at the transition, as well. George Fisher, who was lured from his position as CEO of Motorola to succeed Whitmore in 1993, captured the core issue when he told the New York Times that Kodak

regarded digital photography as the enemy, an evil juggernaut that would kill the chemical-based film and paper business that fueled Kodak’s sales and profits for decades. via The New York Times (12/25/1999)

Fisher oversaw the flop of Advantix and was gone by 1999. As the 2007 Kodak video acknowledges, the story did not change for another decade. Kodak now has a market value of $140m and teeters on bankruptcy. Its prospects seem reduced to suing   Apple and others for infringing on patents that it was never able to turn into winning products.

Addressing strategic decision-making quandaries such as those faced by Kodak is one of the prime questions addressed in Vince Barabba’s book, “ The Decision Loom .” Kodak management not only presided over the creation technological breakthroughs but was also presented with an accurate market assessment about the risks and opportunities of such capabilities. Yet Kodak failed in making the right strategic choices.

This isn’t an academic question for Vince Barabba but rather the culmination of his life’s work. He has spent much of his career delivering market intelligence to senior management. In addition to his experiences at Kodak, his career includes being director of the U.S. Census Bureau (twice), head of market research at Xerox , head of strategy at General Motors (during some of its best recent years), and inclusion in the market research hall of fame.

Vince Barabba

“ The Decision Loom ” explores how to ensure that management uses market intelligence properly. The book encapsulates Barabba’s prescription of how senior management might turn all the data, information and knowledge that market researchers deliver to them into the wisdom to make the right decisions. It is a prescription well worth considering.

Barabba argues that four interrelated capabilities are necessary to enable effective enterprise-wide decision-making—none of which were particularly well-represented during pivotal decisions at Kodak:

1.  Having an enterprise mindset that is open to change. Unless those at the top are sufficiently open and willing to consider all options, the decision-making process soon gets distorted. Unlike its founder, George Eastman, who twice adopted disruptive photographic technology, Kodak’s management in the 80’s and 90’s were unwilling to consider digital as a replacement for film. This limited them to a fundamentally flawed path.

2. Thinking and acting holistically. Separating out and then optimizing different functions usually reduces the effectiveness of the whole. In Kodak’s case, management did a reasonable job of understanding how the parts of the enterprise (including its photo finishing partners) interacted within the framework of the existing technology. There was, however, little appreciation for the effort being conducted in the Kodak Research Labs with digital technology.

3. Being able to adapt the business design to changing conditions. Barabba offers three different business designs along a mechanistic to organismic continuum—make-and-sell, sense-and-respond and anticipate-and-lead. The right design depends on the predictability of the market. Kodak’s unwillingness to change its large and highly efficient ability to make-and-sell film in the face of developing digital technologies lost it the chance to adopt an anticipate-and-lead design that could have secured the it a leading position in digital image processing.

4. Making decisions interactively using a variety of methods . This refers to the ability to incorporate a range of sophisticated decision supporttools when tackling complex business problems. Kodak had a very effect decision support process in place but failed to use that information effectively.

While “ The Decision Loom ” goes a long way to explaining Kodak’s slow reaction to digital photography, its real value is as a guidepost for today’s managers dealing with ever-more disruptive changes. Given that there are few industries not grappling with disruptive change, it is a valuable book for any senior (or aspiring) manager to read.

• Editorial Standards
• Reprints & Permissions

MBA Knowledge Base

Business • Management • Technology

Home » Management Case Studies » Case Study on Business Strategies: Kodak’s Transition to Digital

Case Study on Business Strategies: Kodak’s Transition to Digital

Kodak is one of the oldest companies on the photography market, established more than 100 years ago. This was the iconic, American organization, always on the position of the leader. Its cameras and films have become know all over the world for its innovations. Kodak’s strength was it brand — one of the most recognizable and resources, that enabled creating new technologies. Since the formation of Kodak, the company has remained the world’s leading film provider with virtually no competitors. That is until the arrival of Fuji Photo Film, which now surpasses Kodak in earnings per share and is viewed as the industries number two. It is evident that there has been a significant shift from the use of traditional film cameras to a market fully fledged and saturated with modern and updated digital cameras and digital photographic tools.

However over the time, the situation started to change for Kodak, as it has underestimated the changes on the market. There has been a significant shift from the use of traditional film cameras to a market fully fledged and saturated with modern and updated digital cameras and digital photographic tools. The age of digital technologies were emerging. The core business of Kodak- the film business, started to decline and some areas of the business started to be less profitable and filled with many competitors, especially cheap ones from Asia. Also, the prices of the digital cameras were falling.

Eastman Kodak is divided into three major areas of production.

• Kodak’s Digital and Film Imaging Systems section produces digital and traditional film cameras for consumers, professional photographers, and the entertainment industry.
• Health Imaging caters to the health care market by creating health imaging products such as medical films, chemicals, and processing equipment.
• The Commercial Imaging group produces aerial, industrial, graphic, and micrographic films, inkjet printers, scanners, and digital printing equipment to target commercial and industrial printing, banking, and insurance markets.

Issues and Challenges

The main issue behind this case is the problems faced by the Eastman Kodak Company in the process of changing to Digital technology in printing. It failed to establish market share and market leadership in the Digital sector. It is threatened with either immediate or rapid diversification in technology. Kodak has been extremely successful over the last century in film sales and film development. Now the time has come for the Eastman Kodak to respond to the challenges of digital cameras and also contemplate other issues as follows:

• Will the company’s current strengths and capabilities to make Kodak as ‘The Picture Company”?
• How serious are the weakness and competitive deficiencies?
• Does the company have attractive market opportunities that are well suited with Kodak’s resources? Does it have the internal resources to continue spending money investing in new technology?
• What type of strategy should it use to enter the digital camera business and how will Kodak leverage its strategic resources?
• Should it continue to research and produce digital camera technology alone, or look for partners?
• How will it cope with their existing and new competitors and how will it build a strategic advantage over other companies? Can Kodak once again dominate the world market?

What went wrong at Kodak?

Kodak started facing difficulties in 1984, when the Japanese firm Fuji Photo Film Co. invaded on Kodak’s market share as customers switched to their products after launching a 400-speed color film that was 20% cheaper than Kodak’s. Secondly, during 1980s the company failed to recognize the change in the environment and instead followed and sticked to a business model that was no longer valid for the post-digital age. After the management realized the change and react accordingly but it was too late.

Kodak’s strength

Kodak’s strength can take several forms as follows:

• Valuable intangible assets : Kodak’s strengths were its brand equity and distribution presence. After almost a century of global leadership in the photographic industry, Kodak possessed brand recognition and worldwide distribution. Kodak could bring new products to consumers’ attention and to support these products with one of the world’s best known and most widely respected brand names as a huge advantage in the market where technological change created uncertainty for consumers. Kodak’s brand reputation was supported by its massive. , worldwide distribution presence — primarily through retail photography stores, film processors, and professional photographers.
• Competitive Capabilities : Prior to 1990s Kodak had invested huge in R&D. Moreover, its century of innovation and development of photographic images gave Kodak tremendous depth of understanding of recording and processing images. Central to Kodak’s imaging capability was its color management capability. In the digitizing color and transferring digital images to paper, Kodak possessed a powerful set of complementary technologies in sensing, color management and thermal printing.
• Market advantage: Through its wider distribution network, it has been able to maintain a huge market coverage and accessibility. It had worldwide distribution presence — primarily through retail photography stores, film processors, and professional photographers.

Company’s competence and Competitive capabilities

• Competency : Eastman Kodak has been Leveraging competencies in film and paper media, color management. It has been known for the best quality films and cameras worldwide. Its journey of more than 100 years has helped to gain the experience and excel in its Endeavour. The organizational changes like decentralization and accountability that George Fisher made helped increase speed of manufacturing and product development .i.e short product development cycles. Secondly, a strength could be also considered Kodak’s favorable corporate image (and implicitly a significant brand equity) that results from the values which are said to lead the staff’s behaviors (“respect for the dignity of the individual, integrity, trust, credibility, continuous improvement and personal renewal, recognition and celebration”), a transparent management which allows shareholders to have a realistic and up-to-date image of the operations performed, strong Human Resources policies and commitment to the community.
• Core Competency : Eastman Kodak was a highly integrated company that did its own R&D and manufactured its own parts. Changing global markets and cost pressures in the 1980s and 1990s threatened the way of doing business. So the knowledge, company’s intellectual capital are also affected and repercussion is proficiency in its core competency started diminish. George Fisher, CEO in 1993, refocused the company on core competencies and joined the trend of outsourcing with close relationships to suppliers and announced a new explicit social contract as part of the restructuring effort. By 1997, the company could not grow out of its competitiveness problems like major price competition from its biggest international competitor, Fuji, which was engaged in a major price-cutting campaign aimed at increasing its market share internationally and particularly in U.S. markets. In response, Kodak made more significant changes designed to reduce its costs and to recapture market share in the company’s core products. But all these attempts only lead to decrease market share and declining profit.
• Distinctive Competency : Firstly, the brand image of the company that has been built since century is the distinctive competency for Kodak. Before the digital age, its distinctive competencies were film and Cameras and its sister concern for its chemical technology.

Strategies of Eastman Kodak

• Vertical integration combined with continuous innovation and product development. Speed is also required cutting cycle times in manufacturing and product development.
• To systematize and accelerate product development and improve product-launch, quality, Kodak introduced a new product development methodology called “Manufacturing Assurance Process”(MAP).
• Joint venture with HP, Microsoft to introduce new products that required in the market. Collaborate with expert to enhance the competency.
• Digital strategy was to create greater coherence among Kodak’s multiple digital projects.
• Previously they had diversification strategy but later Fisher focus in Imaging business.

Source: Scribd.com

Related posts:

• Case Study: McDonald’s Business Strategies in India
• Case Study on Apple’s Business Strategies
• Case Study: Walt Disney’s Business Strategies
• Case Study on Business Strategies: The Downfall of Sun Microsystems
• Case Study of Qantas Airlines: Business Model and Strategies
• Case Study on Business Strategies: Failure Stories of Gateway and Alcatel
• Case Study: Airbnb’s Growth Strategy Using Digital Marketing
• Case Study: L’Oreal Marketing Strategies in India
• Case Study of Toyota: International Entry Strategies
• Case Study of McDonalds: Advertising and Promotion Strategies

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Brought to you by:

The Reinvention of Kodak

By: Ryan L. Raffaelli, Christine Snively

The Eastman Kodak Company (Kodak) was a name familiar to most Americans. The company had dominated the film and photography industry through most of the 20th Century and was known for making…

• Length: 23 page(s)
• Publication Date: Nov 30, 2018
• Discipline: Organizational Behavior
• Product #: 419012-PDF-ENG

What's included:

• Teaching Note
• Educator Copy
• Supplements

$4.95 per student

degree granting course

$8.95 per student

non-degree granting course

Get access to this material, plus much more with a free Educator Account:

• Access to world-famous HBS cases
• Up to 60% off materials for your students
• Resources for teaching online
• Tips and reviews from other Educators

Already registered? Sign in

• Student Registration
• Non-Academic Registration
• Included Materials

Instructors should consider the timing of making the video available to students, as it may reveal key case details.

The Eastman Kodak Company (Kodak) was a name familiar to most Americans. The company had dominated the film and photography industry through most of the 20th Century and was known for making affordable cameras (and the "Kodak Moment") and supplying the movie industry with film. At its peak in 1997, Kodak had a market value of $30 billion. Despite inventing the first digital camera, Kodak stumbled to capitalize on the new technology and by 2011 the company was in Chapter 11 bankruptcy protection. In September 2013, Kodak emerged from bankruptcy as a smaller business-to-business (B2B) digital imaging company. The following March, Jeff Clarke took over as Kodak's new CEO. The company continued to produce and sell film to moviemakers, but Clarke, who needed to reinvent Kodak, wondered if keeping that business line made sense. To some inside the company, film was a "sacred cow" and fundamental to Kodak's identity. In January 2016, Clarke and his executive team traveled to Las Vegas, Nevada, for the annual Consumer Electronics Show (CES) where the company unveiled a prototype of its new Super 8 camera-an analog motion picture camera initially launched in 1965 to shoot home movies-with updated features. Over the course of the four-day event, media and other industry players had overwhelmed the Kodak booth, excited to catch a glimpse of the camera, asking when they could expect to see the Super 8 on shelves. While the business-to-business (B2B) side of the company appeared to be growing, the new Super 8 reflected the culture and identity of a firm originally rooted in film and consumer products. Sentiment aside, Clarke needed to decide if the new Super 8 fit into the company's overall strategy and whether Kodak was focused on the right markets for growth. What was the optimal path to reinvention?

Nov 30, 2018 (Revised: Aug 24, 2020)

Discipline:

Organizational Behavior

Harvard Business School

419012-PDF-ENG

We use cookies to understand how you use our site and to improve your experience, including personalizing content. Learn More . By continuing to use our site, you accept our use of cookies and revised Privacy Policy .

• SUGGESTED TOPICS
• The Magazine
• Newsletters
• Managing Yourself
• Managing Teams
• Work-life Balance
• The Big Idea
• Data & Visuals
• Reading Lists
• Case Selections
• HBR Learning
• Topic Feeds
• Account Settings
• Email Preferences

Kodak and the Brutal Difficulty of Transformation

• Scott D. Anthony

2012 has not gotten off to a great start for Eastman Kodak. Three of the company’s directors quit near the end of last year, and word recently emerged that the company was on the brink of filing for Chapter 11 bankruptcy protection. The easy narrative is that Kodak is a classic case of a company […]

2012 has not gotten off to a great start for Eastman Kodak. Three of the company’s directors quit near the end of last year, and word recently emerged that the company was on the brink of filing for Chapter 11 bankruptcy protection.

• Scott D. Anthony is a clinical professor at Dartmouth College’s Tuck School of Business, a senior partner at Innosight , and the lead author of Eat, Sleep, Innovate (2020) and Dual Transformation (2017). ScottDAnthony

Partner Center

Why Did Kodak Fail? | Kodak Bankruptcy Case Study

Yash Taneja

Kodak, as we know it today, was founded in the year 1888 by George Eastman as ‘The Eastman Kodak Company’ . It was the most famous name in the world of photography and videography in the 20th century. Kodak brought about a revolution in the photography and videography industries. At the time when only huge companies could access the cameras used for recording movies, Kodak enabled the availability of cameras to every household by producing equipment that was portable and affordable.

Kodak was the most dominant company in its field for almost the entire 20th century, but a series of wrong decisions killed its success. The company declared itself bankrupt in 2012. Why did Kodak, the king of photography and videography, go bankrupt? What was the reason behind Kodak's failure? Why did Kodak fail despite being the biggest name of its time? This case study answers the same.

Why Did Kodak Fail? Biggest Reason Of Kodak's Failure - Fights against Fuji Films Kodak's Bankruptcy Protection Ressurection of Kodak: Kodak in the mobile industry?

Why Did Kodak Fail?

Kodak, for many years, enjoyed unmatched success all over the world. By 1968, it had captured about 80% of the global market share in the field of photography.

Kodak adopted the 'razor and blades' business plan . The idea behind the razor-blade business plan is to first sell the razors with a small margin of profit. After buying the razor, the customers will have to purchase the consumables (the razor blades in this case) again and again; hence, sell the blades at a high-profit margin. Kodak's plan was to sell cameras at affordable prices with only a small margin for profit and then sell the consumables such as films, printing sheets, and other accessories at a high-profit margin .

Using this business model, Kodak was able to generate massive revenues and turned into a money-making machine.

As technology progressed, the use of films and printing sheets gradually came to a halt. This was due to the invention of digital cameras in 1975. However, Kodak dismissed the capabilities of the digital camera and refused to do something about it. Did you know that the inventor of the digital camera, Steven Sasson, was an electrical engineer at Kodak when he developed the technology? When Steven told the bosses at Kodak about his invention, their response was, “That’s cute, but don’t tell anyone about it. That's how you shoot yourself in the foot!"

Kodak ignored digital cameras because the business of films and paper was very profitable at that time and if these items were no longer required for photography, Kodak would be subjected to huge losses and end up closing down the factories which manufactured these items.

The idea was then implemented on a large scale by a Japanese company by the name of ‘Fuji Films’. And soon enough, many other companies started the production and sales of digital cameras, leaving Kodak way behind in the race.

This was Kodak's first mistake. The ignorance of new technology and not adapting to the changing market dynamics initiated Kodak's downfall.

List of Courses Curated By Top Marketing Professionals in the Industry

These are the courses curated by Top Marketing Professionals in the Industry who have spent 100+ Hours reviewing the Courses available in the market. These courses will help you to get a job or upgrade your skills.

Biggest Cause Of Kodak's Failure

After the digital camera became popular, Kodak spent almost 10 years arguing with Fuji Films , its biggest competitor, that the process of viewing an image captured by the digital camera was a typical process and people loved the touch and feel of a printed image. Kodak believed that the citizens of the United States of America would always choose it over Fuji Films, a foreign company.

Fuji Films and many other companies focused on gaining a foothold in the photography & videography segment rather than engaging in a verbal spat with Kodak. And once again, Kodak wasted time promoting the use of film cameras instead of emulating its competitors. It completely ignored the feedback from the media and the market . Kodak tried to convince people that film cameras were better than digital cameras and lost 10 valuable years in the process.

Kodak also lost the external funding it had during that time. People also realized that digital photography was way ahead of traditional film photography. It was cheaper than film photography and the image quality was better.

Around that time, a magazine stated that Kodak was being left behind because it was turning a blind spot to new technology. The marketing team at Kodak tried to convince the managers about the change needed in the company's core principles to achieve success. But Kodak's management committee continued to stick with its outdated idea of relying on film cameras and claimed the reporter who said the statement in the magazine did not have the knowledge to back his proposition.

Kodak failed to realize that its strategy which was effective at one point was now depriving it of success. Rapidly changing technology and market needs negated the strategy. Kodak invested its funds in acquiring many small companies, depleting the money it could have used to promote the sales of digital cameras.

When Kodak finally understood and started the sales and the production of digital cameras, it was too late. Many big companies had already established themselves in the market by then and Kodak couldn't keep pace with the big shots.

In the year 2004, Kodak finally announced it would stop the sales of traditional film cameras. This decision made around 15,000 employees (about one-fifth of the company’s workforce at that time) redundant. Before the start of the year 2011, Kodak lost its place on the S&P 500 index which lists the 500 largest companies in the United States on the basis of stock performance. In September 2011, the stock prices of Kodak hit an all-time low of $0.54 per share. The shares lost more than 50% of their value throughout that year.

Kodak's Bankruptcy Protection

By January 2012, Kodak had used up all of its resources and cash reserves. On the 19th of January in 2012, Kodak filed for Chapter 11 bankruptcy protection which resulted in the reorganization of the company. Kodak was provided with $950 million on an 18-month credit facility by the CITI group.

The credit enabled Kodak to continue functioning. To generate more revenue, some sections of Kodak were sold to other companies. Along with this, Kodak decided to stop the production and sales of digital cameras and stepped out of the world of digital photography. It shifted to the sale of camera accessories and the printing of photos.

Kodak had to sell many of its patents, including its digital imaging patents, which amounted to more than $500 million in bankruptcy protection. In September 2013, Kodak announced it had emerged from Chapter 11 bankruptcy protection.

Ressurection of Kodak: Kodak in the mobile industry?

Celebrated camera accessory manufacturers of yesteryear, Kodak, is looking to join Chinese smartphone manufacturing giant Oppo for an upcoming flagship smartphone. This new smartphone is rumored to have 50MP dual cameras, where the cameras of the device will be modeled upon the old classic camera designs of the Kodak models.

The all-new flagship model of Oppo is designed to be a tribute to the classic Kodak camera design. The camera of this Oppo model will allegedly use the Sony IMX766 50MP sensor. Furthermore, the phone will also embed a large sensor in its ultrawide camera as well along with a 13MP telephoto lens and a 3MP microscope camera.

No other information on this matter is currently available as of September 13, 2021.

The collaborations between Android OEMs and camera makers are not something new. Yes, numerous other companies have already come together with other camera manufacturing companies like Nokia, which joined hands with German optics company Carl Zeiss earlier in 2007 to bring in the camera phone Nokia N95. This can be concluded as the first of such collaborations that the smartphone industry has seen. Numerous other collaborations happened eventually, which resulted in outstanding results. OnePlus' partnership with Hasselblad, Huawei pairing up with Leica and the recent news of Samsung's associating with Olympus are some of the significant collaborations to be mentioned.

Kodak had earlier made a leap into the smart TV industry and is ushering in success through this new move. Kodak TV India has already commissioned a plant in Hapur, Uttar Pradesh in August 2020, designed to manufacture affordable Android smart TVs for India. Furthermore, the renowned photography company is looking to invest more than Rs 500 crores during the next 3 years for making a fully automated TV manufacturing plant possible in Hapur. The company committed to this plan as part of its ‘Make in India’ initiative and will leverage its Android certification. Kodak's announcement, as it seemed, was further recharged with the Aatmanirbhar Bharat campaign launched by PM Narendra Modi in the wake of the coronavirus pandemic in 2020.

The TV industry of India imports most of its raw materials and exhibits a value addition of only about 10-12%. However, with the investment that Kodak has promised the company has aimed to increase the value-added to around 50-60%. The Hapur R&D facility will foster the manufacturing of technology-driven products and introduce numerous other lines of manufacturing aligned with the "Make in India" belief.

Super Plastronics Pvt Ltd, a Noida-based company has obtained the license from Kodak Smart TVs to produce and sell their products in India in partnership with the New-York based company and has already launched a range of smart TVs already, as of September 2021 including:

• Kodak 40FHDX7XPRO 40-inch Full HD Smart LED TV
• Kodak 43FHDX7XPRO 43-inch Full HD Smart LED TV
• Kodak 42FHDX7XPRO 42-inch Full HD Smart LED TV
• Kodak 32HDXSMART 32-inch HD ready Smart LED TV

and more. Besides, Kodak HD LED TVs were also up for sale at the lowest prices for 2020, in partnership with Flipkart and Amazon for The Big Billion Days Sale and the Great Indian Sale respectively. This sale, which took place between 16th and 21st October 2020, also included the all-new Android 7XPRO series, which starts at Rs 10999 only and is currently dubbed as the most affordable android tv in India.

Want to Work in Top Gobal & Indian Startups or Looking For Remote/Web3 Jobs - Join angel.co

Angel.co is the best Job Searching Platform to find a Job in Your Preferred domain like tech, marketing, HR etc.

What happened to Kodak?

Kodak was ousted from the market of camera and photography due to numerous missteps. Here are some insights into the same:

• The ignorance of new technology and not adapting to changing market needs initiated Kodak's downfall
• Kodak invested its funds in acquiring many small companies, depleting the money it could have used to promote the sales of digital cameras.
• Kodak wasted time promoting the use of film cameras instead of emulating its competitors. It completely ignored the feedback from the media and the market
• When Kodak finally understood and started the sales and the production of digital cameras, it was too late. Many big companies had already established themselves in the market by then and Kodak couldn't keep pace with the big shots
• In September 2011, the stock prices of Kodak hit an all-time low of $0.54 per share
• Kodak declared bankruptcy in 2012

Why did Kodak fail and what can you learn from its demise?

Kodak failed to understand that its strategy of banking on traditional film cameras (which was effective at one point) was now depriving the company of success. Rapidly changing technology and evolving market needs made the strategy obsolete.

Is Kodak still in Business?

Kodak declared itself bankrupt in 2012. Kodak's bankruptcy resulted in the formation of the Kodak Alaris company, a British organization that part-owns the Kodak brand along with the American Eastman Kodak Company.

When did Kodak go out of business?

Kodak faced its demise in 2012.

Is Kodak a good camera?

Kodak's cameras and accessories were of premium quality and the first of the choices professional photographers and others. The company was a winner in the analogue era of photography. However, the company dived down to hit the rock-bottom level.  

What does Kodak do now?

Currently, Kodak provides packaging, functional printing, graphic communications, and professional services for businesses around the world. Better known for making cameras, Kodak moved into drug making and has secured a $765m (£592m) loan from the US government in 2020.

Why was Kodak so successful?

Kodak adopted the 'razor and blades' business plan. The idea here was to first sell the razors with a small margin of profit. After buying the razor, the customers will have to purchase the consumables (the razor blades in this case) again and again; hence, sell the blades at a high-profit margin. Kodak's plan was to sell cameras at affordable prices with only a small margin for profit and then sell the consumables such as films, printing sheets, and other accessories at a high-profit margin.

Must have tools for startups - Recommended by StartupTalky

• Manage your business smoothly- Google Workspace

Oleg Jelesko: Global Investment Success With Da Vinci Capital Management

Oleg Jelesko is recognized for his extensive experience and reputation in the business world, notably for his impact within a network of investors and financial experts. He founded an investment company, Da Vinci Capital Management, that has made a significant mark in the market, highlighted by its diverse portfolio of

Top Sponsors of the ICC T20 World Cup 2024

Lots of businesses are putting their money into the Twenty20 World Cup 2024, the biggest event in international cricket that is currently underway. With over 200 million viewers for the most recent tournament in 2022, the Cricket World Cup is second only to the FIFA World Cup in terms of

7 Must-Have Features In An All-In-One HR Software For Startups

Juggling the demands of running a startup can feel like a three-ring circus. From developing a groundbreaking product to building a dream team, founders wear many hats and often work tirelessly to keep all the plates spinning. However, one area that can easily slip through the cracks is human resources

Hisham Mundol, Chief Advisor at Environmental Defense Fund, India, Shares Insights on the Country's Green Future

In the spirit of World Environment Day, StartupTalky presents an exclusive interview with Hisham Mundol, Chief Advisor at Environmental Defense Fund, India. Explore his expertise as he discusses India's sustainable growth, EDF's impactful initiatives in climate action, and the crucial role of businesses and individuals in protecting our environment. Gain

• Sudipta Kashyap
• Sep 15, 2021
• 14 min read

Failure of Kodak: An investigation with the application of the paradox of strategy

An age ago, the phrase, "Kodak moment," implied something that was worth saving and enjoying. Today, however, the term progressively fills in to describe a corporate disaster that cautions the chiefs of various companies of the need to stand up and react when problematic improvements infringe on their market. Even though Kodak is sadly neglected from the failure it encountered, it has taught various other businesses some major lessons.

The correct lessons from Kodak are unpretentious. Organizations frequently see the troublesome powers influencing their industry. They as often as possible redirect adequate assets to take an interest in developing the business sectors. Their disappointment is typically powerlessness to really grasp the new plans of action as the troublesome switch opens. Kodak made a computerized camera, put resources into the innovation, and even comprehended that the photographs would be shared on the web. Where they fizzled, was in understanding that online photograph sharing was the new business, not simply an approach to extend the printing business.

Therefore, I use this common occurrence when companies fail to understand the future of the market and continue to stick to their main line of business as an example of the paradox of strategy as explained by Michael E. Raynor in his book, “The strategy paradox”

Keywords : strategy paradox, technological paradigm, innovation

Introduction

Kodak was the most well-known name in the realm of photography and videography in the twentieth century. The company achieved an insurgency in the photography and videography businesses with annual revenue of 11,395 billion dollars up to 2005. In any case, the achievement of the organization continuously started to transform into disappointment because of its slip-ups in its market prediction. The ruin of Kodak began around the 90s and the organization proclaimed itself bankrupt in 2012.

Here is a confounding reality: the best firms frequently share more for all intents and purposes with failed associations than with those that have overseen simply to endure, which explains that more lessons are to be learnt from failed businesses rather than the flourishing works. Truth be told, the very qualities that we have come to distinguish as determinants of accomplishment are additionally the elements of disappointment. Thus incidentally, something contrary to progress isn't a disappointment, it is mediocrity.

This paper takes the model of a case study analysis where we critically analyze the performance of Kodak from its conception to its present-day scenario. The story of Kodak serves as a perfect example for the paradox of strategy and will reiterate this point in the last section of the paper after an in-depth inquiry into the structure and the management of Kodak. This paper will present the findings which will be used to establish the connection between the paradox of strategy and Kodak.

Problem statement/Research problem

The central problem of my research is to explain the concept of paradox of strategy, its implications with relation to the case study of Kodak. It aims to give an overall analysis as to strategies with the best chance of accomplishment, additionally have the best chance of disappointment. Settling this paradox requires another perspective about procedure and vulnerability which will be viewed through the story of Kodak and a timeline of its decisions and decline.

Literature Review

The Strategy Paradox, a book by Michael E. Raynor : The title and focal point of the book sets up an omnipresent, however, the little-got tradeoff between a decision to be taken based on the present or future market perspectives. The tradeoffs are based on explicit convictions about an eccentric future, yet current key methodologies using the past performance of markets power pioneers focus on an unyielding methodology paying little heed to how the future may unfurl. It is this obligation to the vulnerability that is the reason for "the methodology oddity.” which means that a particular methodology may or may not work and can be determined only by the future.

Barriers of change: The Real Reason behind the Kodak Downfall by John Kotter : The Kodak issue, by all accounts, as indicated by the article, is that it didn't move into the computerized world sufficiently quickly. Recent articles borrow a touch more and find that there were individuals who saw the issue coming and individuals covered in the association however the firm didn't act when it ought to have.

How Underdeveloped Decision Making and Poor Leadership Choices Led Kodak into Bankruptcy : While it is impossible to fully comprehend the mechanics of Kodak’s failure, poor decision making, and leadership appear to have played prominent roles in the company’s decline and bankruptcy. With these lenses, Kodak’s downfall is analyzed with attention to Kodak’s leaders and the underdeveloped decision-making routines they followed.

Research Gap

I believe that my study shall help those companies looking forward to taking risks, especially during the unprecedented and uncontrollable times of Covid-19. It speaks about the danger of undermining such risks in the enthusiasm of making a daring decision by rewinding the story of Kodak.

Research Objectives

To examine the decisions of Kodak after establishing themselves as a well-known name in the realm of photography and videography, and the effects of the same on their market share over the years.

To analyze the motives behind these decisions and how Kodak took risky decisions in a few situations that ultimately resulted in their breakdown.

To prove the paradox of strategy as a reason for their downfall and justify the same with different models and frameworks.

Research Design and Methodology

My paper is primarily dependent on qualitative analysis and therefore uses secondary data to justify the hypothesis. The data used in the paper is spread across different time periods. The statistics shall cover the annual revenue of the company from 2005-2019, the worldwide market share of photography companies from January 2010 to July 2020, the consumer satisfaction, quarterly net income and popularity of the brand in the photography industry. Due to the use of secondary data and variables, the study adopts descriptive statistics and majorly includes variables such as the annual revenue, quarterly net income, global market share and consumer satisfaction, to name a few. All these variables are dependent on the decisions taken by the enterprise and other factors prevailing in the market.

In the qualitative study I have chosen models such as SWOT Analysis, McKinsey’s 7S Framework, strategic management cycle and value Discipline Model to analyze the business history of Kodak and why certain decisions were taken and why a few of them were ignored.

Theoretical background to the paradox of strategy

Even though in most circumstances it is impossible for us to overcome the paradox of strategy, according to experts a flexible business plan will do the work. When the leaders of a company design a strategy with goal setting, they may have been proved wrong through technological paradigm shifts or environmental and legal factors. Over a course of time, their goals and strategies seem either too old or irrelevant in the current market space but in most cases, such a realization comes late and ultimately leads to its failure. Even though in an actual sense the strategy taken by the company would have been perfect years back they will face a backlash from current circumstances.

History of Kodak

Kodak can be characterized with the story of huge success during the 1970s but consequently a story of failure by 2012. The company was in bankruptcy during the year 2012 and it is important to understand how this company that ruled the photography market for years, suddenly saw a backlash.

George Eastman and Henry Strong are the founders of this massive franchise. The name “Kodak'' was coined by George Eastman in the 1800s and he played an important role in the company, while Henry Strong was mostly an investor. Photography before the 1800s majorly involved huge and heavy cameras that took hours of travel, shooting and printing. Kodak was reputed to have revolutionized the process of photography in the world. They introduced small portable cameras and worked with the tagline “Press the button and we do the rest”. These cameras were made available to the public and were extremely handy. Kodak soon introduced films for processing the photos. However, there were huge complaints as these cameras required particularly Kodak films for the processing which saw a huge fall in the prices of their films. In 2009 the production of films ultimately stopped. In 1976, Kodak was controlling 85% of the camera industry and 90% of the filmmaking industry.

They had a major fall in 2005 when digital cameras started ruling the market. Most people believe that Kodak ignored the camera market in 1990 however, that is not what happened. Kodak was the first to invent, as well receive a patent for digital cameras. Surprisingly, where they saw a downfall, was their plan to use the digital camera production as a side business and underestimating its role in the market. They wanted something to be so true that they decided the digital cameras would do them no good and such an attitude was caused due to their overestimated experience.

Soon by 2005, they only held 7.5% of the global market share for cameras and were stepping into the production of printers where they faced competition from HP and other established companies. Even though Kodak continues to exist in the present day, calling themselves a printer company, they have come a long way from bankruptcy. In the present day, considering the emergence of social media, it’s doubtful that they would have sustained in the market.

Quantitative

Annual Revenue: 2005-2019: 2005 is termed as the year when Kodak saw its nightmare. It was the year when digital cameras were introduced and since then it has been a journey off the track. As explanatory as the graph is, the annual revenue of Kodak drastically decreased from 2005-2009. 2010 was the period when various photo-sharing platforms were introduced further deepening the losses .

Retrieved from: Eastman Kodak revenue 2005-2019 | Statista

2) Global market share: This picture speaks a lot about the global market share that Kodak had and its decline in just 10 years from 11,000 to 1,200 billion dollars. The reasons add up to many including the failure to capture the digital camera market, no attempt made to join the e-sales and services and swift competition from mobile phones and photo-sharing platforms.

Retrieved from: Cutting and pasting about Kodak’s demise – keeping simple (yodaiken.com)

Kodak Stock market prices: 2006-2011: A similar story was followed in Kodak’s stock market values. The company managed to keep hold of high prices for its stocks with loyal consumers and blooming market expectations. Over the years, they had set records and made their tagline “Kodak Moments” a household slang. With the career of the company at its peak, investors saw zero harm in investing and in fact had high expectations for its returns. However, as Kodak failed to capture the digital camera market or enter e-business and services, traditional marketing and product portfolio demonstrated nothing but losses. In the period of 10 years between 2005-2015, Kodak lost almost all its hold on the market and the earnings per share dropped dead. Investors no longer trusted the company’s marketing strategies and business decisions and soon were convinced of the company’s bankruptcy, especially due to the introduction of smartphone cameras and online photo-sharing apps. Surprisingly, they were not wrong.

Retrieved from: KODAK stock price (typepad.com)

Qualitative

Value discipline model

A value discipline model assists the organization with breaking down their qualities and shortcomings and investigating the chances to build up a compelling arrangement for the market. This section talks about the essential investigation of Eastman Kodak Company to foster a strategic plan.

Product Leadership : This category under the value discipline model explains the variety of products that a company can bring to the market through research and development. The Eastman Kodak company did not lack in research or development and were in fact the first one to introduce digital cameras in the market. However, the real reason behind the downfall was the priority of marketing for a particular product that is the Kodak films. Along with an innovative product, there should always be good marketing and advertising.

Consumer Intimacy: Consumer Intimacy is not just the skill to understand the needs and wants of the consumer, but to go beyond. Kodak, in this sphere, was a pioneer, and had shown exceptional results. They came up with extremely creative and relatable taglines like “Kodak Moments”. They reduced the prices of the films to satisfy the demands of the consumer, which later popularly came to be known as the ‘Kodak moments.’ Every picture of memory in the 1970s reminded everyone about Kodak and its films.

Operational efficiency : Remaining in the market for a very long period, Kodak had no trouble in establishing operational efficiency through its remarkable experience and leadership. They delivered fine products at reasonable prices making cameras available for the public which was not a common scenario in the past.

SWOT analysis

SWOT Analysis helps analyse the strengths and weaknesses along with the various opportunities and threats that a company faces or has been facing to understand what brackets certain decisions shall come under.

Brand : Kodak as a brand has and always been a name very familiar to our ears even though it has been a long time since its presence has diminished. Kodak had established itself as a brand even though it slowly lost hold of the market.

Product portfolio : Kodak has expanded their product portfolio moving from cameras films to digital cameras as well, that were recognized through the brand name.

Technology : Kodak has not stood back from technology, considering they were the first ones to invent digital cameras.

Socially and environmentally responsible : They were socially responsible and contributed to the reduction in the emission of greenhouse gases.

Weaknesses:

E-commerce industry : Kodak failed to switch to the e-commerce industry which backlashed and reduced its position in the market. As various other companies worked on switching to the industry, Kodak took a step back.

Wrong Decisions : The company made a few wrong decisions like considering their hesitation in making the digital camera an important part of their supply chain.

Opportunities

Digital Media : The coming up of various digital media platforms has been a threat to Kodak such as Instagram and Facebook. Kodak could see a better business future with their industry in the digital media as well.

Change in the main product : Kodak can change their main business line and make amends to introduce modern-day technology and products for better market outreach across the world, both in developed and developing countries.

Competition : The major reason for the Kodak downfall was the competition that took over the market by a swirl through modern-day technology and equipment such as Instagram and Facebook, unlike Kodak that stuck to its old traditional means

Substitute products : A mobile phone has replaced traditional cameras in most households and reduced the consumer base dependent on cameras. In years to come, the industry might dissolve in itself, which shall come as no surprise.

Mckinsey 7s model

The Mckinsey 7s model is used to understand the structural organization of the business and its working by taking into consideration the various factors affecting the same.

System: Kodak worked in an extremely organized system with coordination on all fronts. Eastman Kodak had extremely appreciable organizational skills and the company followed the same structure and system for a long period until recently, when it had a change in its organisational structure, systems, and roles.

Skills: Kodak hired exceptionally skilled staff and started getting pickier during its peak. The first digital camera being invented in the company says a lot about its skills in terms of hardware. However, one of the drawbacks of kodak was its insufficient business skills in the board of marketing and directors.

Style: Kodak had an extremely creative team of advertisers and marketing workers who made it the brand it was in the past. Various skills of advertisement such as the kodak moments have had an impact on the lives of a large number of people helping the brand to create its own style.

Staff: The staff, as already mentioned, was highly skilled and up for tasks in terms of research, innovation, and development.

Structure: The same hierarchical structure that has been followed almost since Eastman was followed until recently and showcased an efficient set of systems.

Strategy: One of the reasons why the company did not see the failure coming was its lack of strategic skills. With a good business conscience, the company could have seen the digital camera take over the market. However, just like the paradox of strategy, Kodak did what it thought was right and stuck to a product that showed immense confidence and years of experience in developing the same. Even though it can’t have been stated as the wrong strategy, they didn’t do it right either.

Shared Values: One of Kodak’s biggest mistakes was to be conservative with a product that saw the hope of development almost every single day. Their shared values were strong and upheld integrity even during their peak years.

Strategic management cycle

The strategic management cycle explains how a particular strategy is formulated and later implemented and how its effects can be noticed after implementation. This is also an analysis of the digital camera strategy adopted by Kodak.

Strategy formulation: The first step in strategic planning is coming with one. In the case of Kodak, the major strategy that we need to investigate is the way they dealt with digital cameras and social media. Kodak did not realize the popularity or the heights that digital cameras would go to when it was first discovered. They did not want to let go of their main product of films, which was the reason they were popular as a company in the first place. This strategy of Kodak to continue developing films and reducing its prices while keeping the digital camera business on the side was one of the first mistakes in its strategy formulation. They did not anticipate the arrival of social media photo-sharing platforms either in keeping them far behind in business.

Planning: The next step of planning did not see a bright side either. They realized that films had no more development on their way and their research and development teams were convinced that there were no hopes.

Implementation: Implementation of the strategy was welcomed into the market with competition from other businesses that was almost nothing in front of Kodak during its bright years. These companies advertised digital markets while Kodak was accused of no further developments.

Review: On review of their strategy, we realize that the company had not only underestimated the market but had eventually lost hold over even its loyal consumers. Kodak has still not been able to recover from such a blow.

Results of the analysis

The paradox of strategy clearly implies that due to the flighty risks that a market holds are usually unpredictable by businesses, such a strategy, therefore, acts as a barrier to the development of the same. More times than not, the paradox of strategy is inevitable. With flexible business plans and extreme potential to foresee the market future, we can overcome the paradox. In the case of Kodak, the business plan and strategy taken proved itself outdated and irrelevant which would have seen immense success if not for the technological paradigm. However, in the case of Kodak, the paradox was completely avoidable. Kodak being the company that first came up with digital cameras should have seen the potential for such a development and invested in the same, but the realization came late when Kodak was losing its markets while other companies were making immense progress and investment in digital camera markets. The company had the potential and the resources but had no foresight for the transition that the future held for them and therefore ended up becoming a victim to the paradox.

Bhasin, H. (2019, May 5). SWOT analysis of Kodak – Kodak SWOT analysis . Marketing91. https://www.marketing91.com/swot-analysis-kodak/

Cunha, M. P. E., & Putnam, L. L. (2019). Paradox theory and the paradox of success. Strategic organization , 17 (1), 95-106.

Eastman Kodak - AnnualReports.com . (n.d.). Annualreports.Com. https://www.annualreports.com/Company/eastman-kodak

Eastman Kodak - Stock Price History | KODK . (n.d.). MacroTrends. https://www.macrotrends.net/stocks/charts/KODK/eastman-kodak/stock-price-history

KODAK stock price . (n.d.). Harker Research. https://harkerresearch.typepad.com/.a/6a00d8351451c553ef015434714a50970c-popup

Kodak’s Downfall Wasn’t About Technology . (2017, April 24). Harvard Business Review. https://hbr.org/2016/07/kodaks-downfall-wasnt-about-technology

Kotter, J. (2012). Barriers to change: The real reason behind the Kodak downfall. Forbes, May , 2 .

Lucas Jr, H. C., & Goh, J. M. (2009). Disruptive technology: How Kodak missed the digital photography revolution. The Journal of Strategic Information Systems , 18 (1), 46-55.

Mckinsey 7s Framework Of Eastman Kodak Company . (n.d.). Essay48. https://www.essay48.com/2925-Eastman-Kodak-Company-Mckinsey-7s

Minds, B. (2020, December 15). Why Did Kodak Fail and What Can You Learn from its Demise? Medium. https://brand-minds.medium.com/why-did-kodak-fail-and-what-can-you-learn-from-its-failure-70b92793493c

Mui, C. (2020, July 14). How Kodak Failed . Forbes. https://www.forbes.com/sites/chunkamui/2012/01/18/how-kodak-failed/?sh=6810c69f6f27

PetaPixel. (2018, June 14). A Brief History of Kodak: The Rise and Fall of a Camera Giant . https://petapixel.com/2018/06/14/a-brief-history-of-kodak-the-camera-giants-rise-and-fall/

Pigneur, Y. O. A. (n.d.). Why Your Company Might Be About To Have A Kodak Moment . Strategyzer. https://www.strategyzer.com/blog/posts/2016/1/5/why-your-company-might-be-about-to-have-a-kodak-moment

Prenatt, D., Ondracek, J., Saeed, M., & Bertsch, A. (2015). How Underdeveloped Decision Making and Poor Leadership Choices Led Kodak into Bankruptcy. Inspira: Journal of Modern Management & Entrepreneurship , 5 (1), 01-12.

Raynor, M. E. (2007). The strategy paradox: Why committing to success leads to failure (and what to do about it) . Currency.

Statista. (2021, January 22). Eastman Kodak's global revenue 2005–2019 . https://www.statista.com/statistics/277061/kodaks-global-revenue-since-2005/

Stopper, W. G. (1998). Agility in action: Picturing the lessons learned from Kodak and 23 other companies. Human Resource Planning , 21 (1), 11-14.

TechCrunch is now a part of Verizon Media . (2012, January 21). Techcrunch. https://techcrunch.com/2012/01/21/what-happened-to-kodaks-moment/

Utterback, J. M. (1995). Developing technologies: the Eastman Kodak story. The McKinsey Quarterly , (1), 130-144.

V. (2016, June 12). Cutting and pasting about Kodak’s demise – keeping simple . Vyodiken. https://www.yodaiken.com/2016/06/12/cutting-and-pasting-about-kodaks-demise/

West, N. M. (2000). Kodak and the Lens of Nostalgia . University of Virginia Press.

• Social Issues

Recent Posts

Is migration truly global?

Applying Nudges from Behavioural Economics in combating the COVID-19 Pandemic

Dissidence without Citizenship

Comentários

• Ludlow Public Schools focus on technology – The Cub – The Cub
• Palantir lands $480M Army contract for Maven artificial intelligence tech – DefenseScoop
• Coty entrusts its digital strategy to former Meta executive Pierric Duthoit – Fashionnetwork USA
• OpenAI Inks Deal With PwC To Resell ChatGPT To Businesses—As Firms Race Toward AI – Forbes
• Top Cybersecurity Trends and Strategies for Securing the Future – Gartner

Case Study: Kodak’s Downfall—A Lesson in Failed Digital Transformation and Missed Opportunities

The context: an iconic brand meets digital disruption.

Eastman Kodak, commonly known as Kodak, was once the undisputed leader in the photography industry, boasting a market capitalization of $31 billion at its peak in 1997. However, by 2012, Kodak had filed for bankruptcy, a staggering descent that is often cited as a cautionary tale in the annals of business history. So, what went wrong? How did a company that held 90% of the U.S. film market and 85% of the camera market in 1976 end up in bankruptcy?

The Dilemmas

1. complacency and over-reliance on legacy business models.

Kodak was heavily invested in the film-based photography market. The company’s complacency in sticking to its legacy business model, despite the seismic changes in technology, was its first major mistake. Film processing was a cash cow, and there was a reluctance to explore or transition to emerging technologies for fear of cannibalizing the existing business.

2. Ignoring Technological Innovations

Ironically, Kodak was one of the pioneers in digital photography and invented the first digital camera in 1975. Yet, they did not capitalize on this innovation. This was largely because they perceived digital photography as a threat to their film business. Their failure to adapt to and invest in the new technology would cost them dearly.

3. Misjudging Market Trends and Customer Needs

The management wrongly assumed that the transition from film to digital would be slow. They underestimated how quickly consumers would adopt digital cameras and later, smartphones. Kodak’s inability to read the market and customer needs accurately further exacerbated their downfall.

The Aftermath: The Costs of Inaction

By the time Kodak realized the significance of digital photography, it was too late. Other companies like Canon, Sony, and later tech giants like Apple and Google, had already captured significant market share. In 2012, Kodak filed for Chapter 11 bankruptcy and later emerged as a company focusing on digital imaging for businesses, a far cry from its glorious past.

The Data and Statistics

Kodak timeline.

• 1888: George Eastman patents the first roll-film camera and registers the trademark “Kodak.”
• 1900: Eastman introduces the Brownie camera, making photography accessible to the masses.
• 1935: Kodachrome film is launched, becoming the standard for color photography.
• 1962: Kodak introduces the Instamatic camera, popularizing point-and-shoot photography.
• 1975: Kodak engineer Steve Sasson invents the first digital camera prototype.
• 1984: Kodak launches the Photo CD system, allowing digital storage of photos.
• 1990: Kodak’s market share for photographic film peaks at over 80%.
• 1994: Kodak enters the digital camera market, but faces competition from industry newcomers.
• 1997: Kodak’s market capitalization reaches $31 billion.
• 2003: Kodak announces a major restructuring and begins shifting focus to digital technologies.
• 2012: Kodak files for bankruptcy, citing a failure to adapt to the digital age.
• 2013: Kodak emerges from bankruptcy as a restructured company focused on commercial printing.
• 2019: Kodak launches a blockchain cryptocurrency platform for photographers called KODAKCoin.
• Present: Kodak continues to innovate in various imaging and printing technologies, aiming to regain its prominence in the industry.

This timeline captures the major milestones and challenges faced by Kodak throughout its history.

What Could Have Been Done Differently?

• Scenario Planning : Kodak could have considered various future states of technology and the market to identify opportunities and threats better.
• Agile Methodologies : An agile approach to strategy and product development could have made the organization more responsive to change.
• Horizon Planning : A long-term strategy incorporating emerging technologies could have diversified their revenue streams and reduced their dependency on the film business.
• Prioritization : Resource allocation could have been better managed to focus on digital technologies, a future growth area.

Case Study: Dropbox’s Success with the Lean Startup Methodology

The Missed Goldmine: Kodak’s Untapped Digital Patents

One of the most perplexing aspects of Kodak’s downfall is the vast portfolio of digital patents the company held. Kodak was a pioneer in many digital imaging technologies and had over 1,000 patents related to digital cameras, image processing, and various other digital imaging technologies. This arsenal of intellectual property could have been a significant game-changer, positioning Kodak as a dominant player in the digital era. However, Kodak failed to leverage these assets effectively. While some of these patents were eventually sold for $527 million during the bankruptcy proceedings in 2012, the revenue pales in comparison to what could have been earned through strategic application or licensing agreements (Source: Reuters). Kodak’s failure to capitalize on its rich patent portfolio demonstrates a glaring missed opportunity and adds another layer to the tragedy of its downfall. These patents could have been the stepping stones to transition smoothly from a film-based photography company to a digital imaging powerhouse, if only the right strategies and focus were in place.

The Lawler Model for Designing AI Products: A BloombergGPT Case Study

Lessons for Other Organizations: Unpacking the Kodak Tragedy for Modern-Day Strategic Insights

The collapse of Kodak wasn’t just a loss for the company and its employees; it serves as a case study loaded with lessons for other organizations. The corporate world today, more than ever, requires companies to adapt swiftly to emerging technologies and market changes. Here are some key takeaways that could guide other companies in averting a similar fate:

Avoid Complacency

Kodak dominated the film photography industry for years, which likely contributed to an organizational culture of complacency. No matter how successful a business is today, tomorrow’s landscape could be entirely different. Continuous innovation and an ever-curious mindset are vital for long-term sustainability.

Harness Your Intellectual Property

Kodak’s patent portfolio was a goldmine that was not effectively utilized. Intellectual property can provide a competitive edge and open up new avenues for revenue through licensing or forming strategic partnerships. Evaluate your IP assets and think strategically about how to leverage them for future growth.

Case Study: Starbucks’ Success Elevating Customer Experience with Customer Journey Mapping

Prioritize Adaptability

Kodak’s downfall illustrates the importance of adaptability. Employing frameworks like Agile and Horizon Planning can help a company remain flexible and responsive to market needs, ensuring that you’re not only reacting to changes but also anticipating them.

Stakeholder Involvement is Crucial

Kodak’s transition to the digital age was not a smooth one, partly because of resistance from various stakeholders who were invested in the existing film business. Ensure that all stakeholders are aligned with the company’s vision and strategy, and consider using a neutral facilitator to guide strategy meetings effectively.

Keep Your Roadmaps Dynamic

Technology and strategy roadmaps should not be static documents but should evolve with the industry landscape and internal capabilities. Regular updates and revisions keep the roadmap relevant and actionable, allowing for real-time adjustments to market changes.

Financial Prudence

In an era of rapid changes, conserving resources for future investments in innovation and strategic shifts is crucial. Kodak’s lack of financial prudence when the tides were turning led to a situation where they had fewer options when they finally decided to pivot.

How to Create Apps that Customers Want: A Comprehensive Strategy

A Glimmer of Hope: Kodak’s Pivot to Blockchain and Continued Innovation

Even the most harrowing tales of downfall can have a silver lining, and in the case of Kodak, it’s their foray into blockchain technology and ongoing endeavors in imaging and printing technologies. These initiatives not only showcase the brand’s resilience but also provide valuable lessons on how to stage a comeback in the digital age.

KODAKCoin: A Step Towards Decentralization

In 2019, Kodak surprised the tech world by launching KODAKCoin, a blockchain cryptocurrency platform designed for photographers. This innovative move aimed to address issues around image rights and royalties, providing photographers with a secure and transparent platform to manage their intellectual property. With KODAKCoin, Kodak showed its willingness to explore frontier technologies, reflecting a newfound openness to adapt and innovate.

A Commitment to Imaging and Printing Technologies

Kodak has also continued its efforts to innovate in its core areas—imaging and printing technologies. Leveraging its historical strengths, the company is investing in new product lines and partnerships, aiming to re-establish itself as a leader in the industry. While the road to recovery is long, these actions signal a directional shift in Kodak’s strategy, focusing on modernization and value creation.

CDO TIMES Bottom Line Summary

The fall of Kodak serves as a cautionary tale that outlines the importance of adaptability, strategic planning, and stakeholder alignment in today’s volatile business environment. Organizations aiming to avoid a similar fate should consider adopting modern planning frameworks like Agile and Horizon Planning, stay open to revising their technology roadmaps, and leverage intellectual property assets strategically. These lessons are not just theoretical but actionable guidelines that could determine an organization’s survival in the fast-evolving corporate landscape.

Kodak’s pivot towards blockchain with KODAKCoin and its ongoing efforts in imaging and printing technologies show a company striving to reinvent itself. While it’s too early to predict if these steps will fully restore Kodak’s former glory, they do offer a glimmer of hope and a wealth of insights for other companies seeking to pivot or modernize. The lesson here is clear: innovation and adaptability remain at the core of corporate sustainability. For organizations looking to master these qualities, subscribing to CDO TIMES’ unlimited access membership offers an in-depth analysis of successful strategies, emerging technologies, and case studies, arming you with the knowledge you need to stay ahead of the curve.

Love this article? Embrace the full potential and become an esteemed full access member, experiencing the exhilaration of unlimited access to captivating articles, exclusive non-public content, empowering hands-on guides, and transformative training material. Unleash your true potential today!

In this context, the expertise of CDO TIMES becomes indispensable for organizations striving to stay ahead in the digital transformation journey. Here are some compelling reasons to engage their experts:

• Deep Expertise : CDO TIMES has a team of experts with deep expertise in the field of Digital, Data and AI and its integration into business processes. This knowledge ensures that your organization can leverage digital and AI in the most optimal and innovative ways.
• Strategic Insight : Not only can the CDO TIMES team help develop a Digital & AI strategy, but they can also provide insights into how this strategy fits into your overall business model and objectives. They understand that every business is unique, and so should be its Digital & AI strategy.
• Future-Proofing : With CDO TIMES, organizations can ensure they are future-proofed against rapid technological changes. Their experts stay abreast of the latest AI advancements and can guide your organization to adapt and evolve as the technology does.
• Risk Management : Implementing a Digital & AI strategy is not without its risks. The CDO TIMES can help identify potential pitfalls and develop mitigation strategies, helping you avoid costly mistakes and ensuring a smooth transition.
• Competitive Advantage : Finally, by hiring CDO TIMES experts, you are investing in a competitive advantage. Their expertise can help you speed up your innovation processes, bring products to market faster, and stay ahead of your competitors.

By employing the expertise of CDO TIMES, organizations can navigate the complexities of digital innovation with greater confidence and foresight, setting themselves up for success in the rapidly evolving digital economy. The future is digital, and with CDO TIMES, you’ll be well-equipped to lead in this new frontier.

Do you need help with your digital transformation initiatives? We provide fractional CAIO, CDO, CISO and CIO services, do a Tech Navigator Assessment and we will help you drive results and deliver winning digital and AI strategies for you! Schedule your FREE Tech Navigator Call NOW:

Subscribe now for free and never miss out on digital insights delivered right to your inbox!

Type your email…

Share this:

• The Evolution of AI in the Workplace: Optimizing AI + Human Intelligence for Elevated Collaborative Intelligence (ECI)
• The AI Horizon: Top 10 Transformative Predictions for 2025 and Beyond

Carsten Krause

As the CDO of The CDO TIMES I am dedicated delivering actionable insights to our readers, explore current and future trends that are relevant to leaders and organizations undertaking digital transformation efforts. Besides writing about these topics we also help organizations make sense of all of the puzzle pieces and deliver actionable roadmaps and capabilities to stay future proof leveraging technology. Contact us at: [email protected] to get in touch.

Leave a Reply Cancel reply

Discover more from the cdo times.

Subscribe now to keep reading and get access to the full archive.

Continue reading

You must be logged in to post a comment.

• Harvard Business School →
• Faculty & Research →
• November 2004 (Revised November 2005)
• HBS Case Collection

Kodak and The Digital Revolution (A)

• Format: Print
• | Pages: 18

About The Author

Rebecca M. Henderson

More from the authors.

• Winter 2023

Moral Firms?

• Faculty Research

Firms, Morality, and the Search for a Better World

A political economy of justice.

• Moral Firms?  By: Rebecca Henderson
• Firms, Morality, and the Search for a Better World  By: Rebecca Henderson
• A Political Economy of Justice  By: Danielle Allen, Yochai Benkler, Leah Downey, Rebecca Henderson and Joshua Simons

Eastman Kodak Company’s Strategy Report

• To find inspiration for your paper and overcome writer’s block
• As a source of information (ensure proper referencing)
• As a template for you assignment

Executive Summary

The purpose of this management report is to analyze the strategy used by Kodak otherwise known as Eastman Kodak Company. Kodak is the world’s leading company when it comes to imaging innovations and products. Kodak provides imaging technology as well as products and services to the image and photography industries around the world.

Some of the company’s products and service include retail printing kiosks, digital cameras, picture frames, online imaging services, image scanning equipment and photographic paper. The report will cover background information on the company by looking at the history of the company as well as the industry in which the company operates in.

The various environments in which the company operates in will also be assessed in this report by conducting an environmental assessment or a PEST analysis of the political, economic, social and technological environment for the company. The report will also focus on Henry Mintzberg’s 5P’s for business strategies which include pattern, position, perspective, plan and ploy.

Introduction

Eastman Kodak Company is a US corporation that specializes in the production of photographic products and equipment. The company’s operations have been divided into four segments which include digital and film imaging, graphic communication, commercial imaging and health sector (Kodak Patents 2010).

The major Kodak products include Colorburst, Kodamatic, Kodak DCS 100 and DCS DSLR, digital picture frames such as the Kodak smart picture frame, image sensors in digital cameras such as the Leica M8 and the KAF-10500 image sensor, document imaging and scanners as well as movie pictures and TV production (Kodak 2010).

George Eastman, who was the founder of Kodak, introduced the first camera to the world in 1888 that allowed people to capture special moments in still formats. Since then, Kodak has been the main provider of imaging, photography products and services as well as photography equipment such as cameras and picture scanners (Murat 2008).

Kodak’s Strategy and Business Industry

The company took aggressive steps in 2003 to re-invent itself to be a stronger and diversified company in the photo imaging industry by leveraging its operations to focus on the core businesses to ensure that its customer base had access to quality imaging and photography products/ services (Kodak.com 2004). In 2008, the company experienced a significant growth as a result of a five year restructuring program that would see its business strategy changing to improve revenue and profit margins.

As a result of the restructuring exercise, revenues from the digital businesses grew by double digits for four consecutive quarters between 2007 and 2008. The decline in revenue for the traditional segment of the company’s business was seen to be in line with the restructuring program which was meant to shift the operations of the business from traditional to more innovative and modern digital businesses (Kodak 2010).

The restructuring exercise saw the company investing $4 billion dollars in research and development activities that would see an increase in its digital businesses. The $4 billion investment was also used in acquiring several small businesses that had been successful in the digital imaging industry to improve the company’s market share as well as improve its technological innovations and services.

The restructuring exercise saw Kodak developing new business strategies that included expanding the digital segment of the company in both retail and home locations. This would see the development of photo kiosks and mini photo labs as well as the development of printer docks that would ensure the easy transfer of images from digital cameras to printers without the use of a computer (Gia 2008).

The photographic equipment and supplies industry has changed in recent times to be known as the imaging industry. The current imaging industry defines companies according to whether they have innovative and novel technology instead of whether they have the best equipment or supplies in the photography industry.

The major association that manages the imaging and photographic industry is known as the International Imaging Industry Association (I3A). The purpose of the I3A is to enable the use of imaging activities to simplify and enrich the lives of ordinary people through the use of visual experiences (I3A 2010). The association brings together various members who have invested in the imaging and photography industry to ensure that the appropriate imaging standards have been met.

The International Imaging Industry Association is viewed as the global imaging ecosystem that is meant to make the creation and production of visual images easier and simple. Companies such as Kodak, Sony and HP have the power and authority to connect and collaborate with other leaders in the imaging industry to deal with any imaging challenges that might arise (Service Architecture 2010).

Internal Environmental Analysis

Swot analysis.

Like any other company, Kodak has strengths, weaknesses, opportunities and threats. The table below shows a SWOT analysis of Kodak Company (Gia 2008)

Kodak’s Financial Performance

Kodak has been identified by financial analysts to be the second largest company after Canon that produces photographic products and services in the photographic equipment and supplies industry. The company has a market capitalization of $8.1 billion when compared to that of Canon which has been estimated to be $58.4 billion (Seed 2006).The financial performance of the company as at 2008 saw the company’s net sales decreasing by 9%.

This decrease was mostly attributed to the global economic recession whose effects were being felt as early as 2007. The fourth quarter of the company’s financial year of 2008 saw its revenues decreasing by 24 percent which was lower than that of the previous year. The impact of this downturn in its revenues was severe to the company’s financial performance as it usually experienced high sales returns during the last four months of its financial year.

The revenue downturn was mostly caused by the declining sales in Kodak’s Film Capture and traditional photofinishing products. This decline in sales was however offset by the company’s increasing sales volume in document imaging and consumer digital imaging products such as digital capture devices and consumer inkjet systems which experienced an increased growth in 2008.

The gross profit of the company declined in 2008 due to the decline in its sales volumes as well as the unfavourable price mix in its business segments. The tables below show the net sales, profit margins and income tax benefits of the company for the year ended December 2008 (Kodak Financials 2010).

(Source: Kodak Financial 2010)

GAP Analysis: Kodak’s Resources and Capabilities

The company’s has a variety of resources and capabilities that have given its products and services a competitive advantage over its competitors. The table and graph below show the various resources and capabilities of Kodak.

FAR Analysis

When analysing the functional areas of Kodak, two main areas of interest are usually considered; product development and sales and marketing. In Kodak’s product development, the design team is usually focused on creating products that are innovative and more superior to those of the competitors in the imaging market.

Digital cameras which are a major innovation for the company have seen a lot of development where designers and developers of the product focus on creating cameras that are easy to use and compatible with other products such as computers and printers (Seed 2006).

Kodak has continued to add value to its products by continually investing in research and development activities that will see its innovations being superior and unique to those of its competitors. Kodak’s EasyShare camera line demonstrated the ability of the company to produce a camera that was simple and easy to use as well as of a high quality when compared to the other digital cameras in the market.

The EasyShare digital camera ensured that the company was able to achieve brand recognition and brand affinity within the imaging and photography industry. It enabled Kodak to move away from the traditional line of photography and equipment to a more modern and unique product line (Seed 2006).

Under the development segment of the company is production which deals with the actual development of the product designs and innovations. Kodak pursues a high cost strategy when it comes to its product innovations which are meant to ensure that the best materials and designs have been used in the development of high quality digital cameras. The second area of the company deals with sales and marketing where the company employs the use of various marketing tools and strategies to market its products.

The photo finishing kiosks are a major marketing tool for the company as they cater for photo editing of customers digital images and they also offer complementary products such as free memory cards for storing the digital images as well as free photo printing paper. The online photo sharing sites such as Ofoto are valuable marketing tools for the company as they allow customers to create and share their pictures with other users which increase the appeal for Kodak digital products (Seed 2006).

Another segment that works in conjunction with sales and marketing is distribution. As with any other company distribution plays an important role when it comes to making the products of a company available in the market. Kodak places a lot of emphasis of on-time deliveries, inventory management and good supplier relations. The company however pursues a low-cost efficiency strategy in its distribution activities as it has placed a lot of emphasis on product research and development.

The company utilises the strategy of placing value of the quality of the product rather than on its availability during its distribution activities (Seed 2006).The diagram below represents a FAR analysis of Kodak based on the two areas of focus which are development, sales and marketing

Mintzberg’s 5Ps for Strategy

The varied definitions of strategy have made it difficult to pinpoint a specific definition that can be used to explain the concept of strategy. Because of this, Henry Mintzberg came up with the 5Ps that could be used in explicitly defining the term strategy. These 5Ps include plan, ploy, pattern, perspective and position (Frankenberger 2006: McCabe 2010: Davies and Ellison 1999).

Plan defines strategy as an intended course of action or guideline that is developed by an organization or company to deal with a given situation (Gane 2007). Plan describes strategies to be actions that are formulated purposefully and consciously in advance to deal with situations that are meant to happen or about to happen (Institute for Manufacturing 2010: Morden 2004).

Strategies that are defined by plans are intentionally organized to take place as they ensure that the progress of projects and activities has been predetermined and the expected outcomes have been projected (Tiwari 2009).

Strategies that include the use of plans involve developing schedules that can be used in product developments and launches, company acquisitions and mergers, investment activities and financial ventures, human resource training programs and downsizing in companies (Campbell et al 2002). Kodak has developed a planned strategy known as the content strategy that is used in its overall marketing strategy.

The content strategy is focused on two aspects one of which is creating content that showcases the products and services that the company uses in its business operations. The tips and projects centre has been identified as the perfect example of the content strategy as it involves the use of inspirational photo essays, imaging projects and photography tips in developing the company’s content for its new product innovations and services (Hoehn 2009).

The second aspect that is considered under the two pronged content strategy is the aspect of distribution which focuses on distributing the created content through the various channels of the company. The company has developed the Kodak distribution channel information portal to distribute the created content (Yunhao 2005).

The distribution channels used by Kodak include blogs, social networking sites, company websites and partnership sites The Company also has a distributed publishing model that involves various bloggers and the company’s employees posting their comments about the company’s new products and innovations in the publishing model.

Mintzberg and Ghoshal (2003) describe a ploy as a manoeuvre that is used to outwit a competitor, a rival or an opponent in a certain activity or industry. Ploy as a strategy is used as a short term goal for companies because a ploy usually tends to have limited objectives and goals.

Ploys are also subject to change within short notice given their short term nature and also given the varying reasons for using the ploy in the first place (Kew and Stredwick 2005). Ploy’s usually operate within the context of competition and competitive rivals within a specific industry where a company tries to eliminate its competition through the use of ploys such as a reduction in commodity prices and introduction of new products into the market (Chappelet and Bayle 2005: Gronfeldt and Strother 2006).

Kodak has used various ploys within the imaging and photography industry to try and gain a competitive edge over its rivals in the same industry as well as increase its market share.

Such ploys include the activation of numerous fronts during major sporting competitions such as the Olympic Games and the World Cup, the use of blogs and social networking sites to market its activities, the promotion of the Kodak brand during the season finale of the Celebrity Apprentice show and the showcasing of the company’s presence in golf through the incorporation of the Kodak Challenge which is a fantasy game (Hoehn 2009).

Mintzberg et al (2005) describe pattern as behaviour of strategy that describes the level of progress that has been made after a particular course of action or form of behaviour has been adopted by an individual or a particular company. Strategies that are patterns have been viewed to just occur as a result of consistent and inconsistent behaviour (Bilton and Cummings 2010).

Pattern defines strategy as a stream of planned actions and behaviour that is consistent and intended. Strategy as a pattern is different from that of strategy as a plan because patterns are viewed to be strategies that have been achieved or realised while plans are strategies that have been identified and intended for action (Evans et al 2003: Wagner 2006). Patterned strategies are therefore those actions that have been developed without any intention or deliberation (Bilton 2007: Ehrnreich 2004: Tate 2009).

Pattern strategies are mostly common in small businesses such as scrap dealerships and scrap metal collection agencies. Such businesses operate on the premise of buying as much scrap metal and materials as they can meaning that they do not need any type of strategy or plan to purchase scrap metal (Simons 2005).

These businesses however cannot buy old and used plastics because these purchases will be outside their pattern of business behaviour. Such patterns are therefore deemed to be unconscious strategies because businesses do not realise that they are following any consistent pattern (Smith et al 1999).

The definition of strategy as a position is described as locating an organization in a particular environment. Strategy through the use of position describes the mediating forces that are used to match the functions of the organization within the industry or environment that it operates in (Marx 2004: Dinsmore and Brewin 2010).

Mintzberg views a position strategy to be appropriate when the most important aspect to an organization is how it relates to its competitors, investors, stakeholders and employees. An organization that incorporates the use of position strategy usually seeks to defend a particular position within a certain market segment and industry (Capon 2008: Morris and Pinto 2007).

Kodak has developed its position in the photography and imaging industry by being the first company to develop photographic equipment that incorporates the use of sensory technology (Northeast 2007). It has also established its position in the imaging industry by focusing its products and services on specific industries and companies. Kodak has developed products for educational institutions such as Kodak scanners and integrated imaging equipment that are used during course training and practical applications.

The company has also developed services for financial institutions that incorporate the use of digitized microfilms used to create, store and protect financial data that is irreplaceable in nature. Kodak has also developed products for health institutions and public hospitals that are mostly used in maintaining patient medical records and also for taking body X-rays (Kodak Graphics 2010).

The definition of perspective strategy is that it is a chosen position and a perceived notion that the company has of the general world. Mintzberg (2007) describes perspective as a view that an organization has of its internal and external environment. Perspective strategy is important as it enables a company to formulate objectives and goals that can be used to achieve business operations through the optimal use of company resources (Magalhães 2004: Carsrud et al 2007).

Perspective determines the patterns of behavior of the company as it outlines the intentions of the employees and the company as a whole. Perspective strategy involves the incorporation of employee’s ideas and intentions into strategic plans to achieve business goals and objectives (Lechner 2005: Clausen 2003: Buytendijk 2010).

Kodak practices strategies that are perspective in nature. It has developed distribution channels for its products and services that incorporate the ideas of its workers and employees.

These channels include the social networking sites as well as company blogs where employees are able to post their comments about particular products and services that the company wishes to introduce to the imaging market. These opinions and comments are usually published by the company in its distributed publishing channel after which these channels are used in the creation of content analysis for the company’s products (Phillips 2004).

PEST Analysis

PEST analysis which is also known as environmental analysis is the assessment that a company performs on its external environment. A PEST analysis involves looking at the political, economic, social and technological environment in which a business operates in (Qin 2009: Tovstiga 2010).

Despite the fact that many organizations view environmental analysis as an important activity, such an analysis ends up making a minimal contribution to the overall operations of the business. This is mostly based on the fact that many organizations view the environments in which they operate in to be volatile and uncertain. This limits their ability to control the impact of the environment on the company’s operations (Bensoussan and Fleisher 2008).

These environments also have indirect effects on the operations of a company which leads to minimal outcomes of environmental analysis (Smith and Raspin 2008). Despite all of these aspects conducting a PEST analysis is an important activity for many companies as it ensures that the company has knowledge of its external environment (Gregory 2000).

A PEST analysis usually allows a company to conduct a SWOT analysis more easily because it assesses the external environment of a business. It is therefore important for a business to conduct a PEST analysis before it performs a SWOT analysis (Applegate and Johnsen 2007: Grant 2005).

Political Environment

As the imaging industry continues to undergo new technological innovations and services, the company has been faced with the problem of patent infringement and patent law suits. This has been because the various imaging technology and equipment developed in the industry is similar for all companies which makes it difficult to establish the company that had the original patent (Mendes 2010).

Patent infringements are common in the imaging industry because of the similarity of products and services that are produced by each company. As a result of this Kodak was involved in a patent infringement with Sony because of the similarity of cameras and photographic equipment that were produced by both companies (Digital Photography 2004: Gustavson 2009).

Kodak launched a patent law suit against Sony for breaching 10 of its patent rights when it came to its digital cameras. The company alleged that Sony used technology invented by Eastman Kodak in developing its digital cameras that incorporated the use of image compression and digital storage hardware (BBC 2004).

Privacy is another political environment that has impacted on Kodak’s business operations. This has mostly been attributed to the fact that digital technology in the US has become smaller and more compatible with equipment that is used on a regular basis. Digital imaging equipment has been incorporated into equipment and technology that is commonly used by ordinary US citizens.

Such equipment includes mobile phones that now have camera features as well as photo editing and image viewer technology. These devices are easily available in the technology market and they have been used for activities that invade the privacy of other people (Seed 2006).

Economic Environment

The economic environment of Kodak has shown that the company’s products are used by both individual and industrial consumers. Individual consumers have recorded a high purchase of pocket digital cameras developed by the company for their own personal use while the health sector has been identified as a major buyer of Kodak’s imaging and scanning equipment.

As much as many people own pocket cameras and photographic equipment, the high inflation and interest rates as well as the recent global recession have made most high end Kodak products to be considered a luxury item for most customers (Khosrowpour 2007). The increasing inflation rates which were as a result of the 2009 economic meltdown saw a decrease in the disposable income which forced many people in the United States and the rest of the world cutting down on their spending.

This meant that people only spent on what they could afford and what they considered to be important. This saw a curb in luxury spending which in turn affected digital camera sales in Kodak (OECD 2009). Such high inflation and interest rates will also affect the spending of industrial consumers such as health institutions and government offices that are the main consumers of the company’s imaging and scanning technology (Barnwell 2006).

Since companies make their capital expenditures on borrowed funds, they might have to postpone their borrowing because of the high inflation rates. This will mean that they will not have enough money to purchase any of the company’s products (Gwartney et al 2009).

The company will also be faced with other economic factors such as decreasing growth in film sales. As the world embraces digital technology, film photography is projected to be obsolete in the next ten years as more people switch towards digital photography and technology.

The company’s current strategy has been to invest the revenues it earns from film sales to be used in the development of digital products (Reliable Plant 2010). This strategy will however be difficult to achieve given the current slow film sales that are being experienced in the digital market. These sales have also been affected by its competitors who have developed far more superior products than the company (Barney and Hestelry 2006).

Social Environment

The social environment has impacted on the business operations of Kodak through the proliferation and increasing use of social networking sites. The world has experienced an increasing growth of Internet communities and networking sites where millions of people join to discuss and share their opinions about certain issues that might be affecting them (Quick MBA 2010).

These sites have affected the operations of Kodak because they incorporate features that allow users to edit and upload their photos to these sites. These sites also have photo sharing capabilities that allow users to share their images with other users. Such features limit the need for Kodak photo sharing and photo editing products (Zastrow and Ashman 2010: Thomases 2010).

The social environment has also affected the operations of the company because of the cultural diversity and beliefs that various countries hold around the world (Zastrow and Ashman 2010). While many countries have embraced technology such as digital cameras, others view these devices to be an invasion of their privacy especially in countries that limit the photographing of national symbols and statues.

This impedes the sale of the company’s products to these countries because of their view of imaging technology as an invasion of personal privacy (Osborne and Brown 2005: Anderson et al 1999).

Technological Environment

The imaging and photography industry is one that experiences fast technological innovations and developments meaning that the company’s technological environment is one that is subject to a lot of changes (Kurtz et al 2010). Such a high degree of technological innovations has mostly been driven by a need to have imaging devices that incorporate the all-in-one features (Worthington and Britton 2006). Consumers in this environment have shown that they prefer equipment that incorporates all features into one device.

Consumers now prefer to have mobile phones that have camera and photo imaging features incorporated into them (Schweibenz and Cabral 2010). Many mobile phone makers around the world are developing products that have more advanced camera works into their mobile phones. For example Nokia’s smart phones have digital camera features that allow the users to take digital images as well as create, edit and view these images (Turner 2010).

Such technological innovations have therefore had an impact on Kodak’s operations given the high demand for all-in-one devices that mostly incorporate digital camera features (Fullen and Podmoroff 2006). The growth of integration and portability in the imaging market has increased the need to constantly replace technology with newer innovations.

Kodak has been faced with the technological challenge of constantly updating its products to ensure that they remain relevant within the imaging industry. While a 1.3 Mp camera might have experienced high sales five years ago, the same cannot be said for the camera now as higher mega pixel cameras are being introduced into the market (Kodak Store 2010).

Kodak’s processing kiosks have also experienced slow growth and film sales as a result of the digital printing of images where consumers load their images onto memory cards or mass storage devices for printing. The availability of color and image printers has made it easier for people to print their images at their convenience at cost.

This has led to a marked decrease in the number of people that visit the company’s image processing kiosks to have their pictures printed. The technological environment has therefore affected the growth of the company given the high rate of technological innovations in the market that make it easy to create, store and produce a digital image (Kodak Kiosk 2010)

Recommendation

In order for Kodak to become the world leader in the production of digital imagery products and services the company should intensify its strategic alliances with other companies within the industry to ensure that it increases its market share. The company could also share its brand name and logo with other companies such as Sony, Canon or Fuji film especially in its low performing product lines such as the digital scanners.

The company should also consider expanding its operations in countries such as China and India as well as other eastern countries that have continued to experience rapid growth and developments especially in their technological industries. Kodak should also consider acquiring technology firms that have demonstrated an increased rate in the production of technological innovations to ensure that it has up to date digital products.

The 5P’s for strategy have shown that the company has incorporated the use of various strategies to achieve its business goals and objectives. The PEST analysis has however shown that the company faces a tough external environment that might affect its business strategies and objectives.

The company therefore needs to reassess its business strategies and goals to deal with the external environmental factors that might affect its business operations to ensure that it remains relevant in the current competitive environment as well as survive the external pressures.

Applegate, E., and Johnsen, A., (2007) Cases in advertising and marketing managemen t. Maryland, US: Rowman and Littlefield.

Anderson, R. E., Carter, I. E., and Lowe, G., (1999) Human behaviour in the social environment: a social systems approach . New York: Transaction Books BBC (2004) Kodak sues Sony in patent row . Web.

Barney, J. B. and Hesterly, W.S. (2006) Strategic Management and Competitive Advantage . Pearson Prentice Hall: New Jersey, 2006.

Barnwell, H., (2006) CIMA learning system test of professional competence in management accounting . Oxford, UK: Elsevier.

Bensoussan, B. E. and Fleisher, C. S., (2008) Analysis without paralysis: 10 tools to make better strategic decisions . Upper Saddle River, New Jersey: Pearson Education.

Bilton, C., (2007) Management and creativity: from creative industries to creative management . Oxford, UK: Blackwell Publishing.

Bilton, C., and Cummings, S., (2010) Creative strategy: reconnecting business and innovation . Chichester, UK: John Wiley and Sons.

Buytendijk, F., (2010) Dealing with dilemmas: where business analytics fall short . New Jersey: John Wiley and Sons Inc.

Capon, C., (2008) Understanding strategic management . New York: Financial Times.

Campbell, D., Stonehouse, G., and Houston, B., (2002) Business strategy . Oxford, UK: Butterworth-Heinemann.

Carsrud, A. L., and Brannback, M. E., (2007) Entrepreneurship . Westport, US: Greenwood Publishing group.

Chappelet, J. L., and Bayle, E., (2005) Strategic and performance management of Olympic sport organizations . Illinois, US: Human Kinetics

Clausen, L., (2003) Global news production . Denmark: Copenhagen Business School Press.

Davies, B., and Ellison, L., (1999) Strategic direction and development school . New York: Routledge.

Digital Photography (2004) Kodak vs Sony: Patent war. Web.

Dinsmore, P. C., and Brewin, J. C., (2010) The AMA handbook of project management . New York: AMACOM.

Ehrnreich, K. R., (2004) Like people: the underutilisation of people’s qualities and capabilities . Amsterdam: Rozenberg Publishers.

Evans, N., Campbell, D., and Stonehouse, G., (2003) Strategic management for travel and tourism . Oxford, UK: Elsevier.

Fullen, S. L., and Podmoroff, D., (2006) How to write a great business plan for your small business in 60 minutes or less . Florida: Atlantic Publishing Group Inc.

Frankenberger, S., (2006) Management of regulatory influences on corporate strategy and structure . Germany: Deutscher Universitats-Verlag.

Gane, M., (2007) Forest strategy: strategic management and sustainable development . New York: Springer.

Grant, R. M., (2005) Contemporary strategy analysis . Oxford, UK: Blackwell Publishing.

Gregory, A., (2000) Planning and managing public relations campaigns . London: Kogan Page Limited

Gia, K. P., (2008) Case study: Kodak at a crossroads: the transition from film-based to digital photography . Norderstedt, Germany: GRIN Verlag.

Gronfeldt, S., and Strother, J.B., (2006) Service leadership: the quest for competitive advantage . California: Sage Publications.

Gustavson, T., (2009) Camera; a history of photography from Daguerreotype to digital . US: Sterling Innovation.

Gwartney, J. D., Stroup, R. L., Sobel, R. S., and MacPherson, D., (2009) Economics: private and public choice . Ohio, US: South-Western Cengage Learning.

Hoehn, T., (2009) Kodak: why content strategy is the key to marketing . Web.

Institute for Manufacturing (2010) Mintzberg’s 5 Ps for strategy. Web.

International Imaging Industry Association (I3A) (2010) About I3A . Web.

Kew, J., and Stredwick (2005) Business environment: managing in a strategic context . London: Chartered Institute of Personnel and Development

Kodak. (2010) History of Kodak . Web.

Kodak. (2004) Eastman Kodak company 2003 annual report and 2004 proxy statement . Web.

Kodak Graphics (2010) Industry solutions . Web.

Kodak Financial (2010) Eastman Kodak Company 2008 annual report . Washington, D.C.: Securities and Exchange Commission.

Kodak Kiosk (2010) Kodak Picture kiosk . Web.

Kodak Patents (2010) Camera printers . Web.

Kodak Store (2010) Easyshare digital cameras . Web.

Khosrowpour, M., (2008) Utilizing and managing commerce and services online . London : Idea Group Inc.

Kurtz, D. L., MacKenzie, H. F., and Snow, K., (2010) Contemporary marketing . Canada: Cengage Brain.

Lechner, C., (2005) A primer to strategy process research . Germany: Cuvillier Verlag.

Magalhaes, R., (2004) Organizational knowledge and technology: an action-oriented perspective on organization and information systems . Massachusetts, US: Edward Elgar Publishing.

Marx, K., (2004) The role of the social context for strategy-making . Germany: Springer Science.

McCabe, S., (2010) Corporate strategy in construction: understanding today’s theory and practice . Oxford, UK: Blackwell Publishing.

Mendes, G., (2010) What went wrong at Eastman Kodak?: strategic analysis. Web.

Mintzberg, H., (2007) Tracking strategies: toward a general theory . Oxford, UK: Oxford University Press.

Mintzberg, H., Ahlstrand, B.W., and Lampel, J., (2005) Strategy bites back . New York: Prentice Hall Financial Times.

Mintzberg, H., and Ghoshal, S., (2003) The strategy process: concepts, contexts, cases . New Jersey: Pearson Education.

Morden, T., (2004) Principles of management . England, UK: Ashgate Publishing.

Morris, P., and Pinto, J. K., (2007) The Wiley guide to project, program and portfolio management . New Jersey, US: John Wiley and Sons Limited.

Murat, J. K., (2008) The history of Kodak, how it all started and evolved . Web.

Northeast, P., (2007) Kodak’s new digital photo sensor . Web.

OECD (2009) The financial crisis: reform and exit strategies . United States : OECD Publishing

Osborne, S. P., and Brown, K., (2005) Managing change and innovation in public service organizations . New York: Routledge

Phillips, C., Doole, I., and Lowe, R., (2004) International marketing strategy: analysis, development and implementation . London, UK: Routledge

Reliable Plant (2010) Kodak sharpens focus, plans leaner cost structure . Web.

Schweibenz, E., and Cabral, R., (2010) Kodak files New 337 complaint regarding certain mobile telephones featuring digital cameras . Web.

Seed, S., (2006) Case analysis: Eastman Kodak Company . United States: Pacific Lutheran University.

Service Architecture (2010) International imaging industry association (I3A). Web.

Simons, R., (2005) Levers of organization design: how managers use accountability systems . United States: Harvard Business press.

Smith, P., Berry, C., and Pulford, A., (1999) Strategic marketing communications: new ways to build and integrate communications . London: Kogan Page Limited.

Smith, B., and Raspin, P.G., (2008) Creating market insight: how firms create value from market understanding . England: John Wiley and Sons Limited.

Tate, W., (2009) The search for leadership: an organizational perspective . United Kingdom: Triarchy Press.

Thomases, H., (2010) Twitter marketing: an hour a day . Indianapolis, US: Wiley Publishing.

Tovstiga, G., (2010) Strategy in practice: a practitioner’s guide to strategic thinking . West Sussex, UK: John Wiley and Sons Ltd.

Tiwari, R., (2009) Tourism management: managing for change . New Delhi, India: Global India Publications Limited.

Turner, S., (2010) The little black book of management: essential tools for getting results now . United States: McGraw Hill Companies.

Qin, Z., (2009) Introduction to E-commerce . Berlin, Germany: Springer-Verlag.

Quick MBA (2010) PEST analysis . Web.

Wagner, S. L., (2006) Governance and organizational dynamics . United States: Medical Group Management Association.

Worthington, I., and Britton, C., (2006) The business environment . New York: Prentice Hall

Yunhao (2005) Technology for a digital world . Web.

Zastrow, C., and Ashman, K. K., (2010) Understanding human behaviour and the social environment. California, US: Cengage Learning.

• Eastman Kodak’s Failed Quest for a Digital Future
• Managing Product and Service Innovation for Kodak
• The Eastman Kodak Firm's Story of Failure
• Cracker Barrel’s Porter's Five Forces Analysis
• Acquisitions in Strengthening Market Position
• Strategies for 24 Hour Fitness
• Simulation of VTI Mobotics' Strategy
• International Business Project: Fast-Food Franchise in Canada
• Chicago (A-D)
• Chicago (N-B)

IvyPanda. (2018, December 27). Eastman Kodak Company's Strategy. https://ivypanda.com/essays/kodak-case/

"Eastman Kodak Company's Strategy." IvyPanda , 27 Dec. 2018, ivypanda.com/essays/kodak-case/.

IvyPanda . (2018) 'Eastman Kodak Company's Strategy'. 27 December.

IvyPanda . 2018. "Eastman Kodak Company's Strategy." December 27, 2018. https://ivypanda.com/essays/kodak-case/.

1. IvyPanda . "Eastman Kodak Company's Strategy." December 27, 2018. https://ivypanda.com/essays/kodak-case/.

Bibliography

IvyPanda . "Eastman Kodak Company's Strategy." December 27, 2018. https://ivypanda.com/essays/kodak-case/.

• Anniversary
• Publications

Case Study: Hate Speech

Strategies for combatting hate speech and promoting social cohesion.

• Share on Twitter
• Share on LinkedIn
• Share on Facebook

Recent studies indicate that hate speech, disinformation, and misinformation fuel violence during elections and transitions, exacerbate ethnic and religious tensions, and are tools for persecuting minorities and promoting gender-based violence. This case study explores the effectiveness of integrating human rights approaches with conflict prevention strategies to combat hate speech and disinformation, through a review of 12 projects that reveal critical issues such as electoral violence, youth vulnerability and inclusion, ethnic, religious, and political discrimination, and gender-based hate speech.

This case study is an excerpt from a larger 2024 Peacebuilding Fund (PBF) Thematic Review examining synergies between human rights and peacebuilding. It examined a select sample of PBF programming – 92 projects implemented in 45 countries and territories – that were supported between 2017 and 2022, with a view to collecting best practices and lessons learned, and contributing to better understanding of how human rights and peacebuilding tools and strategies may complement each other in advancing peace and preventing conflict. This case study appears on pages 47 to 58 of the full report. Access the hate speech case study infographic here .

Related content

2024 PBF Thematic Review: Synergies between Human Rights and Peacebuilding in PBF-supported Programming

31 May 2024

Case Study: Colombia

Case Study: The Democratic Republic of the Congo

Cybersecurity Threats, Vulnerabilities and Resilience Among Women Human Rights Defenders and Civil Society in South-East Asia

The state of AI in early 2024: Gen AI adoption spikes and starts to generate value

If 2023 was the year the world discovered generative AI (gen AI) , 2024 is the year organizations truly began using—and deriving business value from—this new technology. In the latest McKinsey Global Survey  on AI, 65 percent of respondents report that their organizations are regularly using gen AI, nearly double the percentage from our previous survey just ten months ago. Respondents’ expectations for gen AI’s impact remain as high as they were last year , with three-quarters predicting that gen AI will lead to significant or disruptive change in their industries in the years ahead.

About the authors

This article is a collaborative effort by Alex Singla , Alexander Sukharevsky , Lareina Yee , and Michael Chui , with Bryce Hall , representing views from QuantumBlack, AI by McKinsey, and McKinsey Digital.

Organizations are already seeing material benefits from gen AI use, reporting both cost decreases and revenue jumps in the business units deploying the technology. The survey also provides insights into the kinds of risks presented by gen AI—most notably, inaccuracy—as well as the emerging practices of top performers to mitigate those challenges and capture value.

AI adoption surges

Interest in generative AI has also brightened the spotlight on a broader set of AI capabilities. For the past six years, AI adoption by respondents’ organizations has hovered at about 50 percent. This year, the survey finds that adoption has jumped to 72 percent (Exhibit 1). And the interest is truly global in scope. Our 2023 survey found that AI adoption did not reach 66 percent in any region; however, this year more than two-thirds of respondents in nearly every region say their organizations are using AI. 1 Organizations based in Central and South America are the exception, with 58 percent of respondents working for organizations based in Central and South America reporting AI adoption. Looking by industry, the biggest increase in adoption can be found in professional services. 2 Includes respondents working for organizations focused on human resources, legal services, management consulting, market research, R&D, tax preparation, and training.

Also, responses suggest that companies are now using AI in more parts of the business. Half of respondents say their organizations have adopted AI in two or more business functions, up from less than a third of respondents in 2023 (Exhibit 2).

Gen AI adoption is most common in the functions where it can create the most value

Most respondents now report that their organizations—and they as individuals—are using gen AI. Sixty-five percent of respondents say their organizations are regularly using gen AI in at least one business function, up from one-third last year. The average organization using gen AI is doing so in two functions, most often in marketing and sales and in product and service development—two functions in which previous research  determined that gen AI adoption could generate the most value 3 “ The economic potential of generative AI: The next productivity frontier ,” McKinsey, June 14, 2023. —as well as in IT (Exhibit 3). The biggest increase from 2023 is found in marketing and sales, where reported adoption has more than doubled. Yet across functions, only two use cases, both within marketing and sales, are reported by 15 percent or more of respondents.

Gen AI also is weaving its way into respondents’ personal lives. Compared with 2023, respondents are much more likely to be using gen AI at work and even more likely to be using gen AI both at work and in their personal lives (Exhibit 4). The survey finds upticks in gen AI use across all regions, with the largest increases in Asia–Pacific and Greater China. Respondents at the highest seniority levels, meanwhile, show larger jumps in the use of gen Al tools for work and outside of work compared with their midlevel-management peers. Looking at specific industries, respondents working in energy and materials and in professional services report the largest increase in gen AI use.

Investments in gen AI and analytical AI are beginning to create value

The latest survey also shows how different industries are budgeting for gen AI. Responses suggest that, in many industries, organizations are about equally as likely to be investing more than 5 percent of their digital budgets in gen AI as they are in nongenerative, analytical-AI solutions (Exhibit 5). Yet in most industries, larger shares of respondents report that their organizations spend more than 20 percent on analytical AI than on gen AI. Looking ahead, most respondents—67 percent—expect their organizations to invest more in AI over the next three years.

Where are those investments paying off? For the first time, our latest survey explored the value created by gen AI use by business function. The function in which the largest share of respondents report seeing cost decreases is human resources. Respondents most commonly report meaningful revenue increases (of more than 5 percent) in supply chain and inventory management (Exhibit 6). For analytical AI, respondents most often report seeing cost benefits in service operations—in line with what we found last year —as well as meaningful revenue increases from AI use in marketing and sales.

Inaccuracy: The most recognized and experienced risk of gen AI use

As businesses begin to see the benefits of gen AI, they’re also recognizing the diverse risks associated with the technology. These can range from data management risks such as data privacy, bias, or intellectual property (IP) infringement to model management risks, which tend to focus on inaccurate output or lack of explainability. A third big risk category is security and incorrect use.

Respondents to the latest survey are more likely than they were last year to say their organizations consider inaccuracy and IP infringement to be relevant to their use of gen AI, and about half continue to view cybersecurity as a risk (Exhibit 7).

Conversely, respondents are less likely than they were last year to say their organizations consider workforce and labor displacement to be relevant risks and are not increasing efforts to mitigate them.

In fact, inaccuracy— which can affect use cases across the gen AI value chain , ranging from customer journeys and summarization to coding and creative content—is the only risk that respondents are significantly more likely than last year to say their organizations are actively working to mitigate.

Some organizations have already experienced negative consequences from the use of gen AI, with 44 percent of respondents saying their organizations have experienced at least one consequence (Exhibit 8). Respondents most often report inaccuracy as a risk that has affected their organizations, followed by cybersecurity and explainability.

Our previous research has found that there are several elements of governance that can help in scaling gen AI use responsibly, yet few respondents report having these risk-related practices in place. 4 “ Implementing generative AI with speed and safety ,” McKinsey Quarterly , March 13, 2024. For example, just 18 percent say their organizations have an enterprise-wide council or board with the authority to make decisions involving responsible AI governance, and only one-third say gen AI risk awareness and risk mitigation controls are required skill sets for technical talent.

Bringing gen AI capabilities to bear

The latest survey also sought to understand how, and how quickly, organizations are deploying these new gen AI tools. We have found three archetypes for implementing gen AI solutions : takers use off-the-shelf, publicly available solutions; shapers customize those tools with proprietary data and systems; and makers develop their own foundation models from scratch. 5 “ Technology’s generational moment with generative AI: A CIO and CTO guide ,” McKinsey, July 11, 2023. Across most industries, the survey results suggest that organizations are finding off-the-shelf offerings applicable to their business needs—though many are pursuing opportunities to customize models or even develop their own (Exhibit 9). About half of reported gen AI uses within respondents’ business functions are utilizing off-the-shelf, publicly available models or tools, with little or no customization. Respondents in energy and materials, technology, and media and telecommunications are more likely to report significant customization or tuning of publicly available models or developing their own proprietary models to address specific business needs.

Respondents most often report that their organizations required one to four months from the start of a project to put gen AI into production, though the time it takes varies by business function (Exhibit 10). It also depends upon the approach for acquiring those capabilities. Not surprisingly, reported uses of highly customized or proprietary models are 1.5 times more likely than off-the-shelf, publicly available models to take five months or more to implement.

Gen AI high performers are excelling despite facing challenges

Gen AI is a new technology, and organizations are still early in the journey of pursuing its opportunities and scaling it across functions. So it’s little surprise that only a small subset of respondents (46 out of 876) report that a meaningful share of their organizations’ EBIT can be attributed to their deployment of gen AI. Still, these gen AI leaders are worth examining closely. These, after all, are the early movers, who already attribute more than 10 percent of their organizations’ EBIT to their use of gen AI. Forty-two percent of these high performers say more than 20 percent of their EBIT is attributable to their use of nongenerative, analytical AI, and they span industries and regions—though most are at organizations with less than $1 billion in annual revenue. The AI-related practices at these organizations can offer guidance to those looking to create value from gen AI adoption at their own organizations.

To start, gen AI high performers are using gen AI in more business functions—an average of three functions, while others average two. They, like other organizations, are most likely to use gen AI in marketing and sales and product or service development, but they’re much more likely than others to use gen AI solutions in risk, legal, and compliance; in strategy and corporate finance; and in supply chain and inventory management. They’re more than three times as likely as others to be using gen AI in activities ranging from processing of accounting documents and risk assessment to R&D testing and pricing and promotions. While, overall, about half of reported gen AI applications within business functions are utilizing publicly available models or tools, gen AI high performers are less likely to use those off-the-shelf options than to either implement significantly customized versions of those tools or to develop their own proprietary foundation models.

What else are these high performers doing differently? For one thing, they are paying more attention to gen-AI-related risks. Perhaps because they are further along on their journeys, they are more likely than others to say their organizations have experienced every negative consequence from gen AI we asked about, from cybersecurity and personal privacy to explainability and IP infringement. Given that, they are more likely than others to report that their organizations consider those risks, as well as regulatory compliance, environmental impacts, and political stability, to be relevant to their gen AI use, and they say they take steps to mitigate more risks than others do.

Gen AI high performers are also much more likely to say their organizations follow a set of risk-related best practices (Exhibit 11). For example, they are nearly twice as likely as others to involve the legal function and embed risk reviews early on in the development of gen AI solutions—that is, to “ shift left .” They’re also much more likely than others to employ a wide range of other best practices, from strategy-related practices to those related to scaling.

In addition to experiencing the risks of gen AI adoption, high performers have encountered other challenges that can serve as warnings to others (Exhibit 12). Seventy percent say they have experienced difficulties with data, including defining processes for data governance, developing the ability to quickly integrate data into AI models, and an insufficient amount of training data, highlighting the essential role that data play in capturing value. High performers are also more likely than others to report experiencing challenges with their operating models, such as implementing agile ways of working and effective sprint performance management.

About the research

The online survey was in the field from February 22 to March 5, 2024, and garnered responses from 1,363 participants representing the full range of regions, industries, company sizes, functional specialties, and tenures. Of those respondents, 981 said their organizations had adopted AI in at least one business function, and 878 said their organizations were regularly using gen AI in at least one function. To adjust for differences in response rates, the data are weighted by the contribution of each respondent’s nation to global GDP.

Alex Singla and Alexander Sukharevsky  are global coleaders of QuantumBlack, AI by McKinsey, and senior partners in McKinsey’s Chicago and London offices, respectively; Lareina Yee  is a senior partner in the Bay Area office, where Michael Chui , a McKinsey Global Institute partner, is a partner; and Bryce Hall  is an associate partner in the Washington, DC, office.

They wish to thank Kaitlin Noe, Larry Kanter, Mallika Jhamb, and Shinjini Srivastava for their contributions to this work.

This article was edited by Heather Hanselman, a senior editor in McKinsey’s Atlanta office.

Explore a career with us

Related articles.

Moving past gen AI’s honeymoon phase: Seven hard truths for CIOs to get from pilot to scale

A generative AI reset: Rewiring to turn potential into value in 2024

Implementing generative AI with speed and safety

Your company may already be a member. View our member list to find out, or create a new account .

Forgot Password?

Content Library

You can search our content library for case studies, research, industry insights, and more.

You can search our website for events, press releases, blog posts, and more.

Ad Net Zero Shares Emissions Best Practices and Case Studies from Sustainable Advertising Book

May 30, 2024    

In this session, the authors of the new book "Sustainable Advertising" shared practical case studies and examples of how and where marketers can make a sustainable advertising a reality through their influence in the ecosystem and by growing demand for sustainable products, services, and behaviors.

This Is an ANA Member Exclusive

Access to this item is reserved for ANA members only.

Already have an account? The industry's best insights and resources await:

No Account?

Use your business email address to create your free account ; if you're a member through your company, we'll know.

Members can access their benefits as soon as they sign up and log in.

Not a Member?

You can still create a free account to access the latest from our online publication, ANA Magazine , receive content and special event offers through our newsletters, get breaking industry updates, and so much more.

The content you're trying to see is available to:

• ANA Client-Side Marketer Tier Members
• Platinum Tier Members
• Gold Tier Members
• Silver Tier Members
• Individual Members

Discover everything the ANA can do to help drive growth for your organization. Connect with our membership team.