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Kodak - A Marketing Failure Disaster: Industrial Analysis

Kodak was once dominant in the camera and film industry, holding 90% of the US film market. However, they failed to capitalize on digital photography technology they invented in 1975. When digital cameras became popular, Kodak focused on film rather than the new technology. Meanwhile, Fujifilm invested heavily in digital and saw it as the future. As a result, Fujifilm surpassed Kodak's revenues, and by 2007 Kodak had fallen to only 9.6% of the US camera market. Kodak eventually filed for bankruptcy in 2012, having failed to transition from film to the digital age.

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67 views3 pages

Kodak - A Marketing Failure Disaster: Industrial Analysis

Kodak was once dominant in the camera and film industry, holding 90% of the US film market. However, they failed to capitalize on digital photography technology they invented in 1975. When digital cameras became popular, Kodak focused on film rather than the new technology. Meanwhile, Fujifilm invested heavily in digital and saw it as the future. As a result, Fujifilm surpassed Kodak's revenues, and by 2007 Kodak had fallen to only 9.6% of the US camera market. Kodak eventually filed for bankruptcy in 2012, having failed to transition from film to the digital age.

Uploaded by

khushboo hanjura
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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KODAK - A MARKETING FAILURE DISASTER

INTRODUCTION

The purpose of this paper is to establish how a successful firm perceives the threat to its
successful and traditional business model owing to a rare transformational technological
change. Kodak ; which was one of the most sought after manufacturers for image and
photographic equipments in early 80’s and 90’s and captured over 90% of the US film
market during its peak time, failed to capitalise and respond to the disruptive developments
in the digital technological world which encroached their market. How and why did the
company, which itself invented the first digital camera in 1975 which changed the
photography world, underestimated the threat of the digital age? How its strong
competitors like Fujifilm garnered the opportunity of Kodak’s fall-down in the photography
business to their advantage? What were the loopholes in the marketing strategies of Kodak
which they failed to capitalise on and which eventually led to their complete washout in the
photographic business, are few questions which we attempt to answer, through this paper.

INDUSTRIAL ANALYSIS
CAMERA AND PHOTOGRAPHY INDUSTRY- HISTORY.

The camera and photography industry has a very long history. It dates back to 1885 when George
Eastman started manufacturing paper film and the first camera available for sale was named as
Kodak. It was a low priced camera which was pre loaded with enough film for 100 exposures which
was later processed in factories to get the photo-print. It later came up with various other models
with improved shutter speeds and quality of print. The size of the camera was also gradually
reduced. There were many important competitors fighting for maximum market share —including
Ansco, Defender, Cramer, and Hammer in the United States; Ilford in Britain; and AGFA in
Germany. Eastman Kodak held a substantial market share in the US and other countries by 1910 and
maintained it by emphasizing on product quality, innovations and patents.

KODAK VS FUJIFILM

Kodak enjoyed a monopoly until Fuji film was founded in 1934, From the inception, Kodak
dominated the camera industry. According to a case study from Harvard Business School ,Kodak had
90 percent of film sales and 85 percent of camera sales in US .In 1981 Kodak had surpassed 10
billlion in revenue .1996 was the peak year for Kodak. The company had over two-thirds of global
market share. Its revenues reached nearly $16 billion, its stock exceeded $90, and the company was
worth over $31 billion. The Kodak brand was the fifth most valuable brand in the world. Kodak was
dominating US market while Fuji was doing the same in Japan. Kodak was the company which first
introduced digital camera in 1975. The trouble began, with the decline of film photography. In the
1990s, Kodak invested heavily into developing technology for taking pictures using mobile phones
and other digital devices. But it held back from developing digital cameras for the mass market for
fear of killing its all-important film business. Others, such as the Japanese firms like Canon and Fuji-
film, poured billions. Seeing “digital” as a competitor to their own film products, rather than the
future of photography, Kodak chose not to pursue it. Fuji film on the other hand was aware of
changing market trends and invested huge amounts on digital technology. The 2 exhibits below
show how Kodak dominated the industry until 2000 and which Fuji film took surpassed Kodak in
revenues. The differential factor between the two was the ability to sustain the business. Fujifilm’s
efforts to sustain its film business at the beginning, the investments later on in digital technologies
and technical up-skilling and business diversifications, would not have been well executed if not for a
strong management with a clear vision. Despite being the industry leader and coming up with the
digital camera technology Kodak due to its myopic view couldn’t survive the market . They failed
to come with disruptive technology to sustain their business.

Decline Phases

YEAR

2007 No. 4 in U.S. camera sales with a 9.6 percent


share

2008 Patents Kodak begins mining its patent portfolio,


which generates nearly $2 billion in fees over
three years.

2010 #7 7 percent of U.S. camera sales, putting Kodak


in seventh place behind Canon, Sony, Nikon
and others.

2011 Patents for Kodak offers for sale its 1,100-imaging


sale patents. Agrees to sell its gelatin business.

2012 Bankruptcy Kodak files for Chapter 11 bankruptcy


protection. Says it will stop making cameras,
pocket video cameras and picture frames,
and will sell its personalized imaging
businesses. Sells its online photo service
business to Shutterfly for $23.8 million.

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