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Film Cameras were one of my favorite things from my childhood. Only limited clicks were available, and we focused on capturing the real picture instead of the perfect one. The excitement of going through the album after washing the roll was incomparable!! Today the traditional camera era is gone and we are in the age of instant and digital cameras. But in the bygone times, there was a brand synonymous with the product. If you think about film cameras then you think about Kodak. The failure of Kodak was a slow burn process with a lack of reality checks.

Kodak-The brand:

George Eastman founded the company in 1888 with the slogan “you press the button, we do the rest.” He had the goal to make photography as convenient as the pencil.

Kodak – an American brand was a pioneer in the videography and filmography industry with almost 90% of the market share. The company had deployed the razor and blade strategy. They sold the cameras at an affordable price and made a small margin of profit. The other requirements, like the camera rolls, printing sheets, and other accessories were sold at a higher price thus making a huge profit. The company’s balance sheets showcased an upward trend and Kodak never thought that they would lose their winning streak.

The failure:

Reason 1: Resistance to change

Kodak was one of the first companies to develop the digital camera. Steven Samson, the electrical engineer had designed the first digital camera but the senior management dismissed the idea. With the onset of digital photography, consumers realized it was cheaper than traditional photography. The management instead of focusing on the shift in consumer preference continued to focus on traditional photography.

Reason 2: Traditional senior management

The senior management turned a blind eye to the digital technology. They had a window of 10 years to act on the changing market environment but they ignored the macroeconomic part. By the time they introduced their first digital product, it was too late, they had lost their footing. The senior management argued that film cameras provide a better experience and they ignored the feedback from media and consumers. The main problem was that the decision-making was concentrated in the hands of the few instead of taking input from the other stakeholders.

Reason 3: Wrong investments

In a decade when Fuji Films laid the groundwork for digital photography, Kodak used up its funds in acquisitions. They bought companies that didn’t add value to their existing portfolio. By the end of 2011, Kodak had dried up all its funds. The decline was looming and the investors pulled out the funding to avoid further loses.

Reason 4: Competition

Kodak believed that Fuji Films – a Japanese company would never be able to capture the market and most importantly the customer sentiments. In contrast, the Americans welcomed the Japanese company with open arms and Fuji became their biggest competitor. By the time Kodak entered the digital photography space, the market was already captured by Asian giants like Sony, Canon, etc.

Bankruptcy:

Kodak filed for bankruptcy in 2012. Under the bankruptcy protection law the company was given credit to continue functioning. Kodak worked out the cost structure and cut jobs of its 50,000 employees. The company had to sell off its non-core patents to carry on the business. In 2013, Kodak emerged from the bankruptcy protection and was never able to regain its lost charm.

What is Kodak doing now?

Kodak is partly owned by British company and partly by Eastman Co. It is called Kodak Alaris which provides photo accessories and services.

Kodak was basking in its “Kodak moment”, nostalgia clouded their vision for the future. The failure of Kodak is a classic example of not keeping up with the changing times. They underestimated their competitors and ignored the consumer feedback, the result being they were thrown off the competition.