Download - Final Kodak Case Study
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KodakCase StudyMIS 5402 - Spring 2016
Jason NorenHamp ColzieLindsey SoloveyYang CaoAmber Roberts
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The Foundation
To understand why Fisher’s attempt to transform Kodak failed and if a different strategy throughout the 80’s and 90’s would have changed Kodak’s position, we must first understand the context of the company.
• Kodak began in 1880s – “Nothing is more important than the value of our name and the quality it stands for” - George Eastman
• 1888 - “You Press the Button, We Do the Rest”. The slogan Eastman introduced for the revolutionized personal camera.
• 1962 – $1B sales, 75,000 employees• 1969 – Apollo 11 mission• 1975 – Invented first digital camera
Didn’t pursue the market on this!
#1 Failure Photo Credit: NASA
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Strategy of the 80s
• Poor investment decisions– Acquisitions in Pharma, Textile, Medical & Chemical industries
• Overconfident - reluctant to acknowledge competition & adopt digital stance– The mindset that people “won’t want it and we can make the
same thing if we want to.”• Managers didn’t support products that weren’t as profitable
– Better film, better paper mentality• Attempted to pursue film based digital imaging but failed due to
higher costs and poor marketing
The focus was on maintaining, not innovating
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CEO Shuffle
• Ineffective strategic succession plan led to many changes at the top in a short period of time– 1983 to 1990 – Colby H. Chandler– 1990 to 1993 – Kay R. Whitmore– 1993 to 2000 – George MC Fisher– 2000 to 2005 – Daniel A. Carp
• Leadership was not diversified– Came through manufacturing and MIT, same school of thought– Risk averse– Focused on maintaining instead of innovating
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Competition
• 1976 - 90% of film and 85% of camera market share in US.• Turned down ‘84 Olympics – Fujifilm took opportunity
– Sparked Fuji’s firm foothold in US.– Increased share to 17% of US photo market in 1997
• Kodak didn’t believe American consumer would desert the Kodak brand
Kodak and the Digital Revolution, Gavetti et al.
Kodak and the Digital Revolution, Gavetti et al.
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Fisher’s Strategy
• Divesting unrelated business units• Focus on core business – imaging• Build international markets
– Ventures with Chinese government
• Tackle the digital technology realm– Contacted Bill Gates & other computer execs– Invested $5B in R&D for digital imaging
Cover Photo By Timothy Rue/Corbis; Digital Illustration By Lisa Knouse Braiman
He Tried But…
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Fisher’s Failures
• Unable to change culture of middle management– Didn’t understand the digital world that Fisher
was attempting to transform Kodak into
• The majority resisted initiatives to reinvent the company
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Was Kodak’s Fall Inevitable?
• Persuasive Leadership is the key differentiator• Failure of change management
– Dealing with lack of diversity in management
– Film-focused middle management– Razor-blade culture was ingrained
• Early entry but late movers in digital imagingThe Answer:
The fall was not inevitable and actually foreseen!Diverse leaders + fresh styles and ideas =
SUCCESS
http://media.democratandchronicle.com/kodaknext/
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What Could Have Been
Kodak was in position to lead in digital imaging if they had adopted different strategy in 80s and 90s.
• Kodak was the firm that “blew” away the competition and they could still be doing that if they used opportunity to be the disruptor
• Kodak developed the first digital camera and could have introduced it to the market and lead the competition while continuing to enjoy brand loyalty they built over many decades
• Kodak could have purchased and absorbed companies continuing to innovate in digital photography if the change could not come from within...their position could be more like Google and Facebook
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References
Gavetti, G., Henderson, R., & Giorgi, S. (2005). Kodak and the Digital Revolution (A). HBS No. 9-705-448. Boston, MA: Harvard Business School Publishing.
http://www.computerworld.com/article/2849847/disruptive-technology-dead-companies-do-tell-tales.html
http://www.forbes.com/sites/chunkamui/2012/01/18/how-kodak-failed/#b80380cbd6ae
http://strategytank.awardspace.com/articles/What%20went%20wrong%20at%20Eastman%20Kodak.pdf
http://www.strategyvault.com/2012/01/27/case-study-eastman-kodak/
http://knowledge.wharton.upenn.edu/article/whats-wrong-with-this-picture-kodaks-30-year-slide-into-bankruptcy/
http://business.time.com/2012/01/20/in-kodak-bankruptcy-another-casualty-of-the-digital-revolution/
http://media.democratandchronicle.com/kodaknext/