A

REPORT
ON

“COMPANIES THAT FAILED TO ADAPT

MARKET ENVIRONMENTAL CHANGES”

FOR THE COMPANY

“KODAK”

SUBMITTED BY

ANIKET KUMAR

MASTER OF BUSINESS ADMINSTRATION

(MEDIA AND COMMUNICATION)
FOR THE YEAR 2018-2020

SUBMITTED TO

BINDIYA NAIK

AJEENKYA D Y PATIL UNIVERSITY

SCHOOL OF MANAGEMENT

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 CONTENTS
S.NO. PARTICULARS PAGE NO.

1. ABOUT THE COMPANY 3

2. CHANGE IN THE ENVIRONMENT 4

3. REASONS OF DOWNFALL 5

4. BANKRUPTCY 6

5. 3 MAJOR QUESTIONS 7

6. LESSONS TO LEARN 8-9

7. CONCLUSION 10

8. BIBLIOGRAPHY 11

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 ABOUT THE COMPANY
The Eastman Kodak Company (referred to simply as Kodak) is an American
technology company that produces imaging products with its historic basis on
photography. The company is headquartered in Rochester, New York, and is
incorporated in New Jersey. Kodak provides packaging, functional printing,
graphic communications and professional services for businesses around the
world. Its main business segments are Print Systems, Enterprise Inkjet Systems,
Micro 3D Printing and Packaging, Software and Solutions, and Consumer and
Film. It is best known for photographic film products.
Kodak was founded by George Eastman and Henry A. Strong on September 4,
1888. During most of the 20th century, Kodak held a dominant position in
photographic film. The company's ubiquity was such that its "Kodak moment"
tagline entered the common lexicon to describe a personal event that was
demanded to be recorded for posterity. Kodak began to struggle financially in the
late 1990s, as a result of the decline in sales of photographic film and its slowness
in transitioning to digital photography. As a part of a turnaround strategy, Kodak
began to focus on digital photography and digital printing, and attempted to
generate revenues through aggressive patent litigation.
In January 2012, Kodak filed for Chapter 11 bankruptcy protection in the United
States District Court for the Southern District of New York.
In February 2012, Kodak announced that it would stop making digital cameras,
pocket video cameras and digital picture frames and focus on the corporate digital
imaging market. Digital camera is still sold under the Kodak brand by JK Imaging
Ltd thanks to an agreement with Kodak.
In August 2012, Kodak announced its intention to sell its photographic film,
commercial scanners and kiosk operations, as a measure to emerge from
bankruptcy, but not its motion picture film operations. In January 2013, the Court
approved financing for Kodak to emerge from bankruptcy by mid 2013. Kodak
sold many of its patents for approximately $525,000,000 to a group of companies
(including Apple, Google, Facebook, Amazon, Microsoft, Samsung, Adobe
Systems and HTC) under the names Intellectual Ventures and RPX Corporation.
On September 3, 2013, the company emerged from bankruptcy having shed its
large legacy liabilities and exited several businesses. Personalized Imaging and
Document Imaging are now part of Kodak Alaris, a separate company owned by
the UK-based Kodak Pension Plan.

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 CHANGE IN THE MARKET ENVIRONMENT

Cameras went digital and then disappeared into cellphones. People went from
printing pictures to sharing them online. Sure, people print nostalgic books and
holiday cards, but that volume pales in comparison to Kodak’s heyday.

The company filed for bankruptcy protection in 2012, exited legacy businesses
and sold off its patents before re-emerging as a sharply smaller company in 2013.
Once one of the most powerful companies in the world, today the company has a
market capitalization of less than $1 billion.

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 REASONS OF DOWNFALL

1. Myopia: Shortsightedness of kodak i.e. focusing more on the current

product rather than adapting to changing market environment.

2. Size: size of the camera invented by kodak was very huge, and was not
possible for every one to carry it everywhere.

3. Time: It took almost 20 seconds for a photo to get processed after getting
clicked, so it was very time consuming.

4. Quality: Quality of the photos clicked was not up to the mark.

5. Technology: Technology used by kodak in their camera was not with the
current market conditions.

6. Non-User Friendly: Cameras created by KODAK were not at all user

friendly for a non-techie person. Hence was very complicated to use.

7. Mismanaged Investments: KODAK’s investment in digital cameras,

overshooting the market by trying to match performance of traditional film
rather than embrace the simplicity of digital.

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 BANKRUPTCY

In January 2012, Kodak filed for Chapter 11 bankruptcy protection in the United
States District Court for the Southern District of New York.

In February 2012, Kodak announced that it would stop making digital cameras,
pocket video cameras and digital picture frames and focus on the corporate digital
imaging market. Digital camera is still sold under the Kodak brand by JK Imaging
Ltd thanks to an agreement with Kodak.

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 3 MAJOR QUESTIONS TO BE ASKED
BEFORE DIGITAL TRANSFORMATION

Q1. What business are we in today?

Ans. Don’t answer the question with technologies, offerings, or categories.
Instead, define the problem you are solving for customers, or, “the job you are
doing for them.” For Kodak, that’s the difference between framing itself as a
chemical film company vs. an imaging company vs. a moment-sharing company.

Q2. What new opportunities does the disruption open up?

Ans. Perceived as a threat, disruption is actually a great growth opportunity.
Disruption always grows markets, but it also always transforms business models.
Gilbert’s research showed how executives who perceive threats are rigid in
response; those who see opportunities are expansive.

Q3. What capabilities do we need to realize these opportunities?

Ans. Another great irony is that incumbents are best positioned to seize
disruptive opportunities. After all, they have many capabilities that entrants are
racing to replicate, such as access to markets, technologies, and healthy balance
sheets. Of course, these capabilities impose constraints as well, and are almost
always insufficient to compete in new markets in new ways. Approach new
growth with appropriate humility.

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 LESSONS TO LEARN

1. Visionaries Win
From Kodak’s perspective, developing a digital alternative to film would have
taken resources away from their big moneymaker. But this is not exactly a
visionary approach to business. Yes, it’s important to capture and keep hold of as
big a market share as possible, but you also must look to future trends and changes
in consumer behaviors. Kodak assumed no one would ever stop using film – they
failed to see the advantages digital photography offered people.

2. Always Remember Your Brand’s Core Offering

It is sadly ironic that Kodak forgot what made them a household name in the
first place. They offered consumers easy-to-use cameras. In fact, their original
slogan was, “You press the button, we do the rest.”
Decades later, the company found itself scrambling to keep pace with the
competition by attempting to finally embrace digital. Their solution? To
produce photo editing software and inkjet printers that no one wanted or bought.
Disruption tends to send CEOs panicking and trying to reinvent themselves in
the midst of change. Instead, brands need to return to their core offerings. Had
Kodak focused on developing simple, easy-to-use digital cameras back in the
90s, and easy-to-use photo apps after that, they may still be a big brand.

3. Focus on Value Not Product

Technology will continue to evolve and advance, but that doesn’t mean your
value needs to shift. In fact, it shouldn’t.
Kodak made the mistake of focusing on their product – film – instead of the
value they offered customers – the ability to capture life’s most precious
moments. Disruption isn’t about newer, better technology coming along and
snatching up your customers; it’s about outside factors coming along and
erasing your key advantage. For decades Kodak’s key advantage was superior
technology, so when new technology came along – digital cameras – their focus
on film blinded them to recognize the value of digital until it was too late.

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4. Agility is Critical
A massive company like Kodak had all of their resources tied up in research and
operations. Theoretically, they could have (and should have) pooled resources to
respond to any threat on the horizon. But they didn’t, and they were eventually
usurped by smaller manufacturers in Asia.
Success in today’s ever-changing global marketplace will require companies to
remain agile so they may react quickly to change. While the last century rewarded
those businesses, who excelled at growth techniques – this next century will
reward companies that can make smart decisions fast.

5. Being able to adapt the business design to changing conditions

There are three different business designs along a mechanistic to organismic
continuum—make-and-sell, sense-and-respond and anticipate-and-lead. The
right design depends on the predictability of the market. Kodak’s unwillingness
to change its large and highly efficient ability to make-and-sell film in the face
of developing digital technologies lost it the chance to adopt an anticipate-and-
lead design that could have secured the it a leading position in digital image
processing.

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 CONCLUSION

A generation ago, a “Kodak moment” meant something that was worth

saving and savoring. Today, the term increasingly serves as a corporate
bogeyman that warns executives of the need to stand up and respond
when disruptive developments encroach on their market.
Unfortunately, as time marches on the subtleties of what actually
happened to Eastman Kodak are being forgotten, leading executives to
draw the wrong conclusions from its struggles.

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 BIBLIOGRAPHY

 https://hbr.org/2016/07/kodaks-downfall-wasnt-about-
technology

 https://en.wikipedia.org/wiki/Kodak

 https://hbr.org/2016/07/kodaks-downfall-wasnt-about-
technology

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