The Demise of Kodak
Kodak was an old company (founded in 1888!) and everyone in America and their grandparents knew that Kodak was synonymous with taking pictures. They used their powerful brand penetration and goodwill to thrive in adjacent markets, like VHS tapes. They even created Figment, their own Disney character, for Epcot.
Then digital cameras became affordable. Film sales dropped in 2001. Kodak unwisely attributed this to the September 11 attacks. By 2005, the increasingly obvious death of film had forced them to beef up their digital units, and they ranked first in US digital camera sales. In theory, Kodak had figured out the digital camera market.
But unlike intricate film cameras, which can only be manufactured by companies with large amounts of capital and require years of R&D to perfect, digital cameras were easy and cheap to produce.
In two years, increased competition made Kodak number four in the US. That same year the iPhone was introduced.
By 2010, they ranked seventh place, with traditional cameras losing market share to smart phones.
Kodak struggled to turn a profit. They tried making inkjet printers, laid off thousands of workers, and used patent litigation as a source of revenue. Before they filed for bankruptcy in 2012, Kodak was so desperate for cash that they considered auctioning off their decades worth of patents.
(story taken from www.devicemagic.com)
Lessons Learnt from the Kodak Story:
- Always watch for the next big thing and be flexible to make changes. Being late movers and rigid leads to your company falling behind competition. As they say, ‘Adapt or Perish’.
- Always stick to your core offering. Kodak tried to reinvent itself when they felt they were lagging behind. Had to stuck to simple and easy to use cameras, they would not have fared the way they did.
Originally published at etrlearning.blogspot.in on February 19, 2016.