Reasons Behind the Demise of Kodak

pbahra tips a story that goes into the reasons behind Kodak's decline and fall. Quoting: "With digital, a significant shift in mind-set occurred in the meanings associated with cameras. Rather than being identified as a piece of purely photographic equipment, digital cameras came to be seen as electronic gadgets. The implications of this shift were enormous. With digital devices, newcomers such as Sony were able to bypass one of Kodak’s massive strengths: its distribution network. Instead, digital cameras became available in electronic retail outlets next to other gadgets. Kodak was now playing on Sony’s and other entrants’ turf rather than its own. Similarly, Kodak’s brand came to be associated with traditional photography rather than digital."

Comments

So, let them die.

[Geoffrey.landis]

I'm not sure why people think that it wasn't a right and proper thing for Kodak to die.

Kodak's strenght was film photography. There turned out to be plenty of other companies with strengths in digital, why should Kodak have colonized that market? Let them produce the stuff they're good at as long as people want it, then quietly go away. There's no reason corporations need to be immortal.

Re:So, let them die.

[cshirky]

But this assumes that the natural lifespan of a company is infinite. What I think Geoffrey is saying is that when Kodak went out of business, the answer to "what exactly went wrong?" is that nothing went wrong.

Here's an analogy: Imagine I offered you one of two things: 200 millions tons of granite rubble, or a cathedral. Which would you pick?

The cathedral is the obvious choice -- the stone in its raw state is fairly dull, while a cathedral is a spectacular work of architecture, the fruit of countless hours of skilled human effort. The cathedral has value right now, while the rubble isn't good for much without an enormous amount of additional labor.

What if labor was part of the equation, though? What if I gave you a choice between the beautiful cathedral and the chaotic rubble, with the stipulation that, after you chose, it was your job to build a bridge.

Now you want the rubble. Though the cathedral and the rubble are made up of about the same amount of stone, building the bridge out of the rubble will consume all the energy required to build a bridge, but building the bridge out of the cathedral will require all the energy needed to build a bridge plus all the energy required to dismantle the cathedral. For some tasks, it's simpler to start with raw material than with a beautiful structure that has to be dramatically altered to serve your purpose.

Now imagine I offered you one of two things: You have to build a digital photography business, and you can start with Sony, or Kodak. Which would you choose?

The problem Kodak faced wasn't that they couldn't have become a digital photography business. The problem Kodak faced was that the digital business was so different from what they are good at that the restructuring costs were crippling, *precisely because they were perfectly adapted to the previous era.*

Canon

[El Lobo]

That didn't prevent other giants of traditional photography like Canon and Nikon to evolve and adapt to the new era, successfully competing again the new kinds.

Re:Pretty simple

[jellomizer]

More to the point their Marketing failed to convince their consumers that Kodak was changing with the market.

Right when Digital cameras were getting popular, Kodak should have gone all out in their marketing trying to sell their own Digital Cameras and far more effort on their Printers and such.

The problem with their Printer Campaign was they were trying to sell that they have lower Total Cost of Ownership... It is really tough to sell Lower Total Cost of Ownership, They should have pushed High Quality Images... And TCO is one of the benefits that customers will get later.