Kodac Digital Camera Market Case Study

It is clear that companies must adapt to the market conditions. Especially in the Information Technology field the new technology replaces the old almost instantly and may cause multi billion firms fade away. Changing the strategy at the right time, enduring the short term loses is a key to success and in this case I learned how Kodak had to change its strategy and the challenges that were waiting Kodak.

The digital camera market was expanding at a fast pace. Kodak has been investing 4 billion dollars in digital research and related technologies since the early 90's however it still was struggling to find its footing in the digital photography world. Kodak's revenues, net income, shares dropped drastically and Kodak cut thousands of jobs. By 2003 analysts expected the digital technology to outsell the filmed cameras. 2003 was a year of recession and was time for Kodak to decide.

By 2008 it was expected that the consumer shift to digital photography would be nearly complete. The demand to digital was increasing at a very fast pace. Despite the demand for film processing services would decline the one time use cameras still were popular.

The digital cameras were very attractive. The factors that made digital technology attractive were: instant preview, sleek design, features and price. More then half of digital camera buyers were in households where the annual income was over $75k and were between the ages 35 – 54 in 2002. Even the digital camera prices declined they were still significantly more expensive then 35 mm cameras.

After the digital technology users tend to save, store their pictures as opposed to printing them. The digital technology significantly reduced the photo printing jobs. However there is now a newer market segment for printers; photo printers. The printer market is dominated by HP and Kodak sure wants a share of it. Having easy share printers project proves this. On the other hand other digital imaging options such as photo capable cell phones are far from being a direct competitor as their image quality