Slashdot Mirror

← Back to Stories (view on slashdot.org)

Kodak Failing, But Camera Phones Not To Blame

Posted by timothy on from the all-the-world's-a-sunny-day dept.

An anonymous reader writes with this snippet from The Conversation: "According to the Wall Street Journal, camera manufacturer Kodak is preparing to file for Chapter 11 bankruptcy, following a long struggle to maintain any sort of viable business. The announcement has prompted some commentators to claim that Kodak's near-demise has been brought on by: a failure to innovate, or a failure to anticipate the shift from analogue to digital cameras, or a failure to compete with the rise of cameras in mobile phones. Actually, none of these claims are true. Where Kodak did fail is in not understanding what people take photographs for, and what they do with photos once they have taken them." Continues the reader: "Looking at camera data from Flickr, of images uploaded in 2011, camera phones only make up 3% of the total. Dedicated cameras from Canon, Nikon and yes, Kodak were used to take 97% of the images. What Kodak failed to understand is that people have switched from taking photos for remembering and commemorative reasons to using photos for identity and communication. The shift changes the emphasis away from print to social media platforms and dedicated apps."

8 of 309 comments (clear)

  1. Changing business by sd4f · · Score: 5, Interesting

    If business was slowing down a lot, why weren't they sacking workers and reducing expenditure? I think this is more of a failure on management to restructure the company in a way that identifies that they can't really compete in the digital age how they once used to. I think that sometimes the management just have to realise that the company can't exist like it once did, and in order for the company to remain and still employ some people, they'll have to downsize a lot more than management might be comfortable about.

    1. Re:Changing business by msobkow · · Score: 5, Interesting

      A decline from such heights doesn't happen overnight. It takes years of mismanagement, mistakes, failure to read the market, failure to adapt, and in this case, failure to realize that the entire market on which your business is based is going away.

      I find it interesting that Fuji in Japan was a much more diverse company, and seems to be working on Thorium Molten Salt Reactor technology based on the PROVEN trials of the 1960s. That's a pretty radical leap from Fuji's "traditional" camera market.

      A smart company invests their assets in developing new markets and new products, not tenaciously clinging to old and failing models until their last dying breath.

      --
      I do not fail; I succeed at finding out what does not work.
    2. Re:Changing business by msobkow · · Score: 5, Interesting

      Rather than saying a company can be sunk by a single bad decision, I'd say it's one specific TYPE of bad decision: hiring the wrong executive.

      Look at NorTel in it's heyday. It was one of the top technology companies in the world; the patents sold in the bankruptcy are still very valuable.

      But they brought in a hot-shot "save the company" American executive to run the place. He laid off THOUSANDS, and many thousands more who were good resources left of their own accord in addition before the axe could fall on them. The company never did recover from the devastation of those late-80s layoffs, and continued it's decline for years afterward.

      But it wasn't a single bad decision in the sense of backing the wrong technology or the wrong business model. It was hiring a rapist to run the company.

      --
      I do not fail; I succeed at finding out what does not work.
    3. Re:Changing business by jimicus · · Score: 5, Interesting

      If business was slowing down a lot, why weren't they sacking workers and reducing expenditure? I think this is more of a failure on management to restructure the company in a way that identifies that they can't really compete in the digital age how they once used to. I think that sometimes the management just have to realise that the company can't exist like it once did, and in order for the company to remain and still employ some people, they'll have to downsize a lot more than management might be comfortable about.

      When you have a small company, it's pretty easy to do that. The CEO or someone very close to him visits the affected departments like the Angel of Death and when he leaves, staff levels have been cut by 40%.

      When you have a huge multi-national, it's really hard. You've got a vast number of departments spread out in all sorts of locations, employment law varies between locations (meaning you may not be able to go in and sack everyone even if you wanted to) - and even the most efficient set of management accounts is lacking in some detail. So rather than visiting like some dark angel, you carry out a full review of operations to get an idea of what departments are contributing and what departments aren't.

      Well and good, but the people directly below you didn't get that far by being stupid. They're pretty good at office politics themselves, they know which way the wind is blowing, they know what a full review of operations means, they've spent years building up their little empire. No way they're letting it go without a fight. So when the instruction comes down from on high, you can be more-or-less certain that the report that goes back will show their department to be the one thing that's keeping the company afloat. (This, BTW, is why it's quite common to hire in outside consultants or make big staffing changes at a senior level before doing these things...)

      Not to mention that such a review works great if the problem can be neatly divided in departmental lines. If it can't - if instead all your teams are contributing but none are contributing anywhere near what they need to be to keep the company afloat - things now become a lot harder.

      That's why when we hear of huge companies turning things around and improving their situation dramatically where before they looked doomed, it's really big news. IBM and Apple have done it, but as a rule it's pretty rare. It's rather more common for the numbers on the balance sheet to drop steadily over a period of time until they can no longer sustain the business - and when that happens, creditors get jumpy. Frequently they get so jumpy that there simply isn't time to go in and turn the business around, they've already asked a court to declare you bankrupt.

  2. Litigation over innovation by Anonymous Coward · · Score: 5, Interesting

    Kodak has lost money each year but one since Mr. Perez, who previously headed the printer business at Hewlett-Packard Co., took over in 2005. The company's problems came to a head in 2011, as Mr. Perez's strategy of using patent lawsuits and licensing deals to raise cash ran dry.
     
      Perez chose litigation over innovation; failure was inevitable and deserved.

  3. Re:bad data source by phantomfive · · Score: 5, Interesting

    They did patent their technology, at least a lot of it. That only lasts 20 years though, so you can't be a troll forever.

    --
    "First they came for the slanderers and i said nothing."
  4. I mean a boring hum-drum one then by Anonymous Coward · · Score: 5, Interesting

    I think you mean a Steve Jobs, whereas I mean a more boring hum-drum one like Mark Hurd.

    Basic competent leadership is enough to turn Kodak around, it doesn't need a superstar CEO, or a major new innovation. That graphics software they killed, it was doing well in the marketplace before the credit crunch hit them. Credit crunch hits, idiot CEO sacks all the programmers and outsources it to China to cut costs. Competitors Agfa/Heidleberg etc. hire all the programmers while they're cheap and come out with major upgrades in the next cycle, customers switch from Kodak and Kodak product dies. Why? Some idiot CEO read an outsourcing article and like a gullible idiot believed it???

    Cameras still sell, and sell well, and Kodak are still a respected camera maker, but they make slightly overpriced, ugly looking cameras. Just basic CEO cost cutting, and trying out new designers, and adjusting teams, boring CEO 101 stuff would be enough to bring Kodak back.

    Kodaks problems are just bad CEO problems.

  5. Re:I remember just 6 years ago... Kodak ate Ofoto by Bob_Who · · Score: 5, Interesting

    Someone I knew uploaded their photos to the Kodak site for printing, and had deleted them from her camera.

    Rather than making it easy to get a copy of these photos, it was impossible. I think you basically had to order a PhotoCD or something, which I wasn't going to do.

    They could have made a proper website to allow people to share their photos and print them. But they made it annoying.

    Ofoto.com was the premiere photography web upstart at the millennium. At that time, Ofoto was the largest buyer of KODAK paper. In fact, since they were clearly in a position of market dominance, Ofoto's brand looked very appealing to Kodak. Kodak greedily gobbled up that magnificent Berkeley dot com upstart, and made it Dow Jones blue chips. From that moment forward, it was all down hill for Ofoto. It went from being the technological and artistic leader to falling into stagnation and total alienation of Ofoto's loyal customer base. They tragically proceeded to delete the customer archives, to save on cost. For most people, this cloud was the ONLY back up of their precious data. Kodak refused to allow customers to download their data:or transfer it to other servers. ONLY the purchase of measly 700mb/ $20 CDs was offered as a means of accessing gigabytes of sacred customer data. I recall doing the math and finding that it was more expensive than all of my camera equipment. Kodak MURDERED Ofoto like they self destructed themselves when they realized that Corporate America is no place for a retired labor force. So just die, rob the shareholders, and let go of all those ballooning pension and health care commitments.