Founded in 1888 in New Jersey, USA, The Eastman Kodak Company dominated the photography industry for nearly a century thanks to its revolutionary products, low costs (achieved through mass production) and effective advertising campaigns. Despite its glorious history, in the 1970s things started changing and for the first time since its foundation, Kodak found itself having to compete with some very tough domestic and international rivals, including FujiFilm, a Japanese company that had been investing heavily in low-cost production plants where the latest kind of film was manufactured in large amounts. One of the greatest mistakes the company has ever made was to turn down Edwin Land’s offer to develop instant cameras; Polaroid did it instead, and its cameras became so successful that Kodak infringed one of the company’s patents in an attempt to imitate them.
Brand equity: Kodak is an iconic company that has been around since the late 1800s. Before international competitors like FujiFilm entered the market, its cameras and films were known and appreciated all over the world for their quality, innovativeness and affordability.
Following Colby Chandler’s appointment as Kodak’s Chairman in 1983, Kodak acquired numerous domestic and foreign firms that specialized in the fields it wanted to dominate but did not possess the human capital or skills to enter by itself.
The company serves a vast array of customers, including photography lovers, professional photographers and corporate customers.
A significant percentage of the company’s sales is generated by the Consumer Digital Imaging Group division.
Kodak failed to respond to the digital revolution in a prompt enough manner. While its competitors were developing and releasing new digital cameras that were capable of taking pictures and recording videos electronically, Kodak was still trying to decide whether to let go of film-based photography.
The main problem with Chandler’s acquisition-based strategy was that it led to higher operational costs and a confusing management structure.
It is not clear what benefits Kodak offers its customers. Despite the company claiming that user-friendliness and affordability are what makes its products competitive, some of its products are difficult to use and feature cumbersome interfaces that do not make them particularly user-friendly.
Kodak could develop an image editing program meant for non-professional consumers. Brand new filters and tools could be included to allow for greater manipulation.
The company could invest in Research and Development activities and launch a new line of user-friendly digital cameras to compete against top selling Japanese cameras.
It is crucial that Kodak should sell its patents as soon as possible and use the proceeds to invest in R&D.
Stronger online presence.
A growing number of consumers prefer storing their images on their digital devices rather than printing them out.
Japanese companies are expected to keep releasing innovative products and services.
The ongoing decline of the film industry.
In view of the above considerations, it can be inferred that in order for Kodak to survive in the future, the company should abandon the film segment and focus exclusively on the production of digital cameras and the development of an image editing program. Judging from the case study being analyzed, the author clearly did not expect Kodak to survive beyond 2012.