Kodak and the Digital Revolution

Kodak and the Digital Revolution

Managing innovation MBA 678-Fall 2014

Dr. John Byrne

23rd September 2014

Ankush Perikal Jayaram

Executive Summary:

Kodak is classic example of a company that failed to adapt to new changes as it was rooted firmly in its past. Though Kodak had the vision for the future it failed to execute a strategy as it tried to achieve a number of objectives in different businesses. In this digital age of, companies must focus on its core competencies and supplement its deficiencies by forging joint ventures or partnership. This move will help them become efficient and innovative in their domains and to sustain changes in their industry.

The report analysis a few problems noted in the case ‘Kodak and the digital revolution’ and try to provide solutions. The first section analysis the current scenario and the businesses Kodak should hold on to and the businesses it should exit. The later section analysis the option Kodak should consider apart from its consumer business for the present and direction it should chart to the future.

Problem statement: Kodak is pursuing a number of businesses in order to provide the consumer end to end photography solution, whereas it should focus only on a couple of its core competencies.

Summary of Facts: Kodak since its inception is an end-to-end solution provider of photography from image capture to post processing of the photo films. It long believed in the razor blade strategy of selling its hardware at a low price and marking up the cost of photo films. This strategy along with monopoly market share drove Kodak revenues and profits for a long time.

The digital revolution of the last few decades and the aggressive strategy by its competitors cost Kodak its market share and decline in its revenue. Despite the poor performance the company is still pursuing a lot of objectives to provide a complete suite of photography solution whereas it should focus only core competencies that it can profitable monetize.

Analysis of facts: With the film cameras and its after sales services now sliding into history, Kodak must focus on its strengths, producing photography hardware, license the brand and its R&D technology and continue with its profitable digital minilabs, kiosks. The software services that it currently provides is a paid service that any other company can replicate. It is difficult for a company to sustain in the services industry unless it has a unique proprietary product, this requires the company to devote most of its resources to a vertical where it lacks competency and that can be better understood by a software company. Hence it should sell it services business and focus on hardware and other photography products.  The cameras is long been Kodak’s strength from being the pioneer of personal cameras to color photography. With this experience, R&D and a vast distribution network, the company should continue to produce high quality digital cameras, even though they are unprofitable now, as the future lies in these cameras. The digital cameras hardware must be unique and ahead of competition offering higher quality images and photography options in a compact size.  Higher image quality and compact size should be the key features that Kodak should focus on and improve on it. The Company must continue to devote majority of its R&D resources to achieve this goal.