disruptive innovation and pentax

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How Pentax survived the shift to digital imaging and then encountered problems.

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  • 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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