Monday, October 28, 2013

Kodak: “I invented a digital camera. But I did not know how to use it.”


Did you recently buy a film? Today’s story is about Kodak that I always come up with in terms of failure of strategy planning. Though Kodak was the top film maker and invented a digital camera, it filed Chapter Eleven in January, 2012. Interestingly, the other three majors, Fujifilm of Japan, Konica of Japan, and AGFA of Germany and Belgium, still are alive. What is a failure about strategy of Kodak?


Nowadays, everyone knows that a digital camera and a smartphone make a film market disappear. Kodak, of course, recognized this situation. According to the article of The Economist, in 1979 Kodak predicted that a film camera would replace a digital camera by 2010. Now everyone easily find that 2010 was too late. I think that this timing is one of the reasons to fail.

However, why did Kodak keep on believing the prediction for thirty years? I think that the positioning of strategy planning caused the blind faith. I thought that Kodak could have changed the prediction. Unfortunately, Kodak adopted the strategy that was not to hurry to switch from a film to a digital camera since Kodak wanted to keep its film business that made money whenever a customer released a shutter. I think that its strategy planning maybe was classical strategy that makes the existing film business extend. Since the market of a film started diminishing in 1990s by a digital camera, Kodak would have needed to build its strategy by using visional strategy. Other competitors entered the new market other than a film to be alive by utilizing their possessed technology. For example, Fujifilm diversified into a digital camera market and a cosmetic market and Konica diversified into a digital photocopy machine.

This example is irony such that a digital camera that Kodak invented cornered it. I believe that this situation does not frequently happen. However, will not you mind that a technology innovation possibly and largely affect strategy planning?

Reference
The Economist. (2012, January 14). The last Kodak moment?. Retrieved from http://www.economist.com/node/21542796/

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