disruptive innovation and pentax
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DESCRIPTIONHow Pentax survived the shift to digital imaging and then encountered problems.
- 1. Christian Sandstrm holds a PhD from ChalmersUniversity of Technology, Sweden. He writes and speaks about disruptive innovation and technological change.
- 2. As we know, the shift from film-basedphotography to digital imaging has put many former camera giants in some serious trouble
- 3. The explosion3025201510 5 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005Number of film and digital cameras sold in the United States
- 4. Kodak
- 5. Polaroid
- 6. Leica
- 7. Konica
- 8. Agfa
- 9. Bronica
- 10. Pentax has also been in trouble.
- 11. Losses and layoffs have become more frequent in recent years.
- 12. Its easy to blame the general recession
- 13. However, recessions are always particularlyhard on companies with structural problems.
- 14. The interesting thing with the Pentax story is that the problems seem to have come after the shift to digital imaging.
- 15. Lets go back in history and take a look at how Pentax handled the shift to digital imaging and what happened after this.
- 16. In 1952, Pentax introduced the first Japanese35 mm camera. Ever since, the company has had a strong competence base in optics, producing lenses, binoculars and other optical instruments.
- 17. The cameraswere exported tothe United States under the name Honeywell Pentax. The company grew just like the entire Japanese camera industry in the period 1950-80.
- 18. Analogue cameras are a mix of many technologies: optics, precise mechanics and some electronics.
- 19. Digital cameras are a mix of electronics, optics and some precise mechanics.
- 20. Having a strong competence base in optics,Pentax chose to focus on this and develop digital cameras together with consumer electronics companies.
- 21. The first digital Pentax cameras were co-developed with Hewlett Packard, and later on worked with Casio as well.
- 22. The Pentax Optio was co-developed with Casio. Pentax provided the optics and Casio made the electronic components. Thanks tothe modular structure of digital cameras, this kind of collaborations worked well.
- 23. The corresponding Casio camera was called Exilim.
- 24. The modular, standardized structure also implied that consumer electronics companies could work on each component.
- 25. Memory cards
- 26. Image sensors
- 27. LCD screens
- 28. could be developed by companies like Sanyo.
- 29. Sanyo provided the bigcamera firms with electroniccomponents, and they could instead focus on optics, design and development.
- 30. Thus, a company like Pentax could survivethe shift thanks to the modular structure and its great skills related to optics.
- 31. However, the market for compact camerasbecame increasingly competitive over time.
- 32. Products like Canon Ixus
- 33. And Nikon Coolpixflooded the market.
- 34. It doesnt matter if a market isgrowing if it is also becoming fiercely competitive.
- 35. And from 2003-04 and on,sales of compact camerasactually started to decline.
- 36. The reasons?
- 37. Mobile cameras had become good enough.
- 38. SLR cameras had become cheap enough.
- 39. Tough competition, declining sales (and prices) of compactcameras implied that Pentax wasin trouble, despite surviving the shift to digital imaging.
- 40. In July 2005, the CEO Mr. Urano said:"Well shift focus to more profitable single- lens reflex digital cameras, to offset price declines in compact types."
- 41. Since the market for SLR cameras was still growing, Pentax shifted to this highersegment of the camera market.
- 42. Once again, Pentax co-developed digital cameras, this time with Samsung.
- 43. In the digital era the pace of innovation is so fast. We
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