Why Kodak Failed?|Learning From Kodak’s Failure
odak was one of the oldest names in the photography industry. In the late 1880s, two friends built this company. Soon after, it became enormous within the photography industry within the 1970s. In 2012 it filed for bankruptcy. Why Kodak failed?
Being the forefront of photography for nearly 100 years, what made it fall? With dozens of innovations and inventions, Kodak was making this form of art accessible to every buyer.
Why Kodak failed in market? In this article, we will present the reasons for how did Kodiak go out of business. From this, every entrepreneur can learn something useful.
Kodak’s Short Biography
We can see the Kodak History rise and fall in this following list of events:-
- In 1889 Eastman, a Dutch Fellowman founded the Eastman Kodak Company. He introduced the primary Kodak camera. Within a couple of years, the Kodak camera becomes wildly successful around the world.
- In 1935, the corporate introduced Kodachrome. It is the first successful color material. People used it for both cinematography and still photography, when was film invented.
- In 1962, Kodak market share had surpassed 1 billion dollars.
- In 1963, The Kodak Instamatic cameras and cartridge loading films made the method easy for amateurs. The corporate sold 50 million Kodak cameras in its first seven years.
- In 1966, their sales had surpassed 2 billion dollars
- In 1972, Kodak’s worldwide sales had passed 3 billion dollars
- In 1975, an engineer at Kodak, Steve Sasson, invented the Kodak digital cameras
- In 1976, Kodak became the number one in the market. They practically pushed their competitors off as they grew so dominant. Their cameras had 85% market share and films had 90% market share.
- In 1981, Kodak sold over 10 billion dollars.
- In the late 1980s, Kodak faced a downfall in their analog camera sale. People were buying more digital cameras.
- In 1984, most customers switched from Kodak to Fuji. Because the Japanese color films were 20% cheaper than Kodak’s.
- In 1991, It launched its first digital camera, despite the start of the fall of Kodak.
- Between the time of 1991–2011, Kodak kept releasing many types of digital products. Still, their sales were falling in the market.
- In 2012, Kodak finally filed for bankruptcy.
Why Was Kodak Successful?
The famous tagline for Kodak is
You press the button, we do the rest.
It is, coined by the owner, Eastman. Eastman began to make photography available for everyone for the first time. Eastman always believed that photography should be available to everyone.
He changes the idea, by changing the way people took photographs back in those days. Which company funded the research to develop the first digital camera? Yes, it was Kodak.
He made it possible for anyone curious about photography. They were able to capture great pictures, with the event of his new and innovative Kodak camera.
The corporate fulfill its founder’s purpose throughout the subsequent decades. They always supported innovations and inventions for their products.
The business model of the Eastman Company brought within the cash, while Kodak’s offer met its clients’ needs. The main business strategy for the company was the razor and blades business model.
In this, they sold one item at a coffee price. They often gave away free of charge to extend sales, like consumable supplies.
You may ask – is this model really worked? Well, it did. Their clients would take photos with Kodak camera. They would send the camera back to the Kodak factory. In the factory, the workers developed the negatives and printed them as photos.
Cameras were not the core product of the company. It was the film and printing photos. The company’s leading selling item was Kodak’s Kodachrome. After 74 years of continuous production, Kodak had discontinued it in 2006.
Why Kodak Failed?
Why Kodak Faced Failure? The fall of Kodak started way back in the 19th century with the advancement of photography technology.
Photography Going Digital
It is phased one of the industry’s turning point. The film sales went out of the window when the digital cameras had come. The photography and video industry was starting to shift towards the digital within the 1980s. Everybody used to love Kodak cameras 1970s.
With Kodak inventing the camera, one would think that turning to digital would be the subsequent logical thing for Kodak. Soon after, the company jumped on the digital trend bandwagon. While it was still selling analog cameras and films, it adopted late.
Despite being late to the party, Kodak developed a replacement for them. They launched a new business direction – Kodak printers.
The corporate-focused on a printing industry that built expensive printers with cheap ink. On the other hand, its competitors were making tons of cash from selling expensive ink.
Kodak’s former CTO, Bill Lloyd exclaimed
“It seems like Kodak had developed antibodies against anything which may compete with the film.”
The man who invented the digital camera must have put the last nail in the coffin.
Photography Turning From Digital To Social
It is phase two of the industry’s turning point. Digital cameras weren’t the most important fish within the pond. In a few years, smartphones took the planet by storm. As a result, the producers of digital cameras saw their stock sales spiraling down quickly.
The trend changed from printing photos to storing them on digital devices. Eventually, most people started sharing their photos online on many social media platforms.
Kodak made a surprise business move many years before Facebook. They had purchased a photo-sharing site called Foot in 2001.
Unfortunately, Kodak used Ofoto rather than going the Integra way. They failed to undertake steps allowing more people to print digital images. Facebook was acquiring Instagram in 2012, while Kodak was going into bankruptcy.
During that time, Instagram was the new and hot face in the photo-sharing social network. They had a value of 1 billion dollars. Sharifah Khairin Syed Mohammad Ali in his slides on Kodak Strategic Blunder, said,
“Kodak was acting sort of a stereotypical change-resistant Japanese firm. And the Fuji film acted like a flexible American one”.
We have added some mentionable reasons in the following:
Kodak Failed To Reinvent Itself
Kodak revenue history is quite interesting. In ‘Kodak’s Downfall Wasn’t About Technology’ book, the author, Scott D. Anthony said
“The proper lessons from Kodak are subtle. Companies often fail to acknowledge their disruptive forces affecting the industry. So, they often divert sufficient resources to participate in emerging markets. Their failure showed an inability to embrace the new business models during the disruptive change.”
Kodak invested in technology and tried to make better cameras. They even understood that photos would be shared online one day. But they failed in realizing that online photo sharing is a completely new business. It won’t last not just by expanding the printing media.
We saw that this organization was overflowed with complacency. It was prominent within the late 1980s. Fuji film started doing a far better job with old technology.
Where Kodak was failing to stay up. Even before the digital revolution and lost in the film-roll business.
Their complacency was as solid as rocks. Additionally, being on the highest level they didn’t even devote their priorities toward turning the problem.
Failing to address it with enormous urgency, of course, they failed to move anywhere. Thus it leads to the death of Kodak.
Kodak Lacked Organizational Abilities
In his book “What went wrong at Eastman Kodak?” the author, George Mendes proposed a great theory. He said that Kodak’s lack of strategic creativity had led it to misinterpret the very line of labor. It was sort of a major blunder in an industry that had been operating.
During which Kodak was frustrated with a fundamental shift towards the new age of digital media. Unlike others, they tackled strategic problems with a rigid mindset.
As a result, the manufacturing process became very costly owing to their mistakes. Kodak often avoided risky decisions, as the profitability was high. Instead, they developed procedures and policies to take care of their status quo.
What Should You Take Out From Kodak’s Misery?
We have listed the important points from the Kodiak failure:
- Don’t be rigid with your plan. Try to transform the ways you view your business models and marketing strategies.
- Manage your innovative ideas. Don’t stick to one product.
- Create changes that are radical and revolutionary. Always be ready to shift from your company’s old views to the new one.
- Try to avoid complacency. Always make sure your products are relevant to the market.
- Try to adopt agility as an industrial strategy for any task.
Lastly, Kodak could cope up with the situation with a perfect strategy. Unfortunately, they failed to execute proper planning. It’s really a big lesson for every new entrepreneur. They can learn from the reason of failure of the Kodak.
Read More: The Rise and Fall of Nokia
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