Kodak, as we know it today, was founded in 1888 by George Eastman as a'The Eastman Kodak Company'🇧🇷 He was the most famous name in the world of photography and videography in the 20th century.Kodak brought a revolution in the photography and videography industries.In the past, when cameras used to shoot movies were only accessible to large corporations, Kodak made cameras available in every home by producing affordable portable kits.
Kodak was the most dominant company in its field for most of the 20th century, buta series of bad decisions ended his success.The company filed for bankruptcy in 2012. Why did Kodak, the king of photography and videography, go bankrupt? what was the reason behindKodak's fault? Why did Kodak fail despite being the biggest name of its time?This case study answers the same question.
Why did Kodak fail?
The biggest reason for Kodak's failure: fight against Fuji Films
Kodak Bankruptcy Protection
Kodak's resurrection: Kodak in the mobile industry?
Why did Kodak fail?
Kodak, for many years, enjoyed unparalleled success around the world. By 1968, it had captured around 80% of the world market share in the field of photography.
Kodak embraced 'razors and blades'business plan🇧🇷 The idea behind the razor blade business plan is to sell the razor blades first with a small profit margin. After buying the razor, customers will have to buy the consumables (in this case, razor blades) over and over again; therefore, sell the blades at a high markup. Kodak's plan was to sell cameras at affordable prices with only a small markup, and then sell consumables such as film, print sheets, and other accessories at a lower price.high profit margin.
Using this business model, Kodak was able to generate massive revenue and became a money maker.
With the advancement of technology, the use of printing films and sheets gradually stopped. This was due to the invention of digital cameras in 1975. However, Kodak dismissed the capabilities of the digital camera and refused to do anything about it. Did you know that the inventor of the digital camera, Steven Sasson, was an electrical engineer at Kodak when he developed the technology? When Steven told Kodak bosses about his invention, his response was:“That's nice, but don't tell anyone. That's how you shoot yourself in the foot!"
Kodak ignored digital cameras because the film and paper business was very profitable at the time and if these items were no longer needed for photography, Kodak would suffer huge losses and end up closing the factories that made these items.
The idea was later implemented on a large scale by a Japanese company called 'Fuji Films'. And soon many other companies began to produce and sell digital cameras, leaving Kodak behind in the race.
This was Kodak's first mistake. Ignorance of new technologies and failure to adapt to ever-changing market dynamics started Kodak's downfall.
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The biggest cause of Kodak's failure
After the digital camera became popular,Kodak spent almost 10 years arguing with Fuji Films, its biggest competitor, that the process of displaying an image captured by the digital camera was a typical process and people loved the touch and feel of a printed image. Kodak believed that the citizens of the United States of America would always prefer it to Fuji Films, a foreign company.
Fuji Films and many other companies focused on gaining a foothold in photography and videography rather than engage in a verbal dispute with Kodak. And once again, Kodak wasted time promoting the use of film cameras instead of emulating its competitors.Media and market feedback completely ignored🇧🇷 Kodak tried to convince people that film cameras were better than digital cameras and lost 10 valuable years in the process.
Kodak also lost any external funding it had at the time. People also realized that digital photography was way ahead of traditional film photography. It was cheaper than film photography and the image quality was better.
Around that time,one magazine claimed that Kodak was falling behind because it was becoming a blind spot for new technologies.Kodak's marketing team tried to convince managers of the necessary change in the company's core principles for success. But Kodak's management committee stuck to its outdated idea of relying on movie cameras, saying the reporter who made the statement in the magazine lacked the knowledge to back up his proposal.
Kodak didn't realize that its strategy, once effective, was now robbing it of success. Rapidly changing technology and market needs overrode the strategy.Kodak invested its funds in the acquisition of many small companies, depleting the money that could have been used to promote sales of digital cameras.
By the time Kodak finally caught on and started selling and producing digital cameras, it was too late. Many large companies had already established themselves in the market, and Kodak could not keep up with the big boys.
In 2004, Kodak finally announced that it would discontinue sales of traditional film cameras. This decision caused approximately 15,000 employees (about a fifth of the company's workforce at the time) to be laid off.Before the start of 2011, Kodak lost its place in the S&P 500 index.which lists the top 500 companies in the United States based on stock performance. In September 2011, theKodak stock prices hit a record low of $0.54 per share.The stock lost more than 50% of its value over the course of that year.
Kodak Bankruptcy Protection
By January 2012, Kodak had exhausted all of its cash reserves and resources. On January 19, 2012, Kodak requestedChapter 11bankruptcy protectionwhich resulted in the reorganization of the company. Kodak received $950 million in an 18-month line of credit from the CITI group.
The credit allowed Kodak to continue operating. To generate more revenue, sections of Kodak were sold to other companies. Along with this, Kodak decided to stop producing and selling digital cameras and left the world of digital photography. Switched to selling camera accessories and photo printing.
Kodak had to sell many of its patents, including its digital imaging patents, which totaled more than $500 million in bankruptcy protection. In September 2013, Kodak announced that it had exitedChapter 11 bankruptcy protection.
Kodak's resurrection: Kodak in the mobile industry?
Famed camera accessory maker of yesteryear, Kodak, is looking to partner with Chinese smartphone manufacturing giant Oppo for an upcoming flagship smartphone. This new smartphone is rumored to have dual 50MP cameras where the cameras of the device will be modeled after the old classic camera designs of Kodak models.
Oppo's new flagship model is designed to be a tribute to the classic Kodak camera design. The camera of this Oppo model will reportedly use the 50MP Sony IMX766 sensor. In addition, the phone will also pack a large sensor in its ultra-wide camera along with a 13MP telephoto and 3MP microscope camera.
No further information is available on this matter as of September 13, 2021.
Collaborations between Android OEMs and camera manufacturers are nothing new. Yes, several other companies have already partnered with other camera makers, such as Nokia, which teamed up with German optics company Carl Zeiss in early 2007 to launch the Nokia N95 camera phone. This can be concluded as the first collaboration of its kind that the smartphone industry has seen. Many other collaborations eventually followed, resulting in great results. OnePlus' partnership with Hasselblad, Huawei's partnership with Leica, and the recent news of Samsung's partnership with Olympus are some of the important collaborations to mention.
Kodak had already made a leap in the smart TV industry and is finding success with this new move. Kodak TV India has already opened a factory in Hapur, Uttar Pradesh in August 2020 designed to make affordable Android Smart TVs for India. Also, the well-known photography company intends to invest more than Rs 500 crores in the next 3 years to make possible a fully automated TV factory at Hapur. The company has committed to this plan as part of its 'Make in India' initiative and will take advantage of its Android certification. Apparently, the Kodak ad was further charged with the Aatmanirbhar Bharat campaign launched by Prime Minister Narendra Modi in the wake of the 2020 coronavirus pandemic.
India's television industry imports most of its raw materials and has a value-added of only about 10-12%. However, with the investment that Kodak has promised, the company intends to increase added value to around 50-60%. The Hapur R&D facility will promote technology-driven product manufacturing and introduce various other manufacturing lines in line with the "Make in India" creed.
Super Plastronics Pvt Ltd, a Noida-based company, has licensed Kodak Smart TVs to produce and sell its products in India in partnership with the New York-based company and has already launched a range of smart TVs, starting in September. of 2021 Included:
- Smart TV LED Kodak 40FHDX7XPRO 40 polegadas Full HD
- Smart TV LED Kodak 43FHDX7XPRO 43 polegadas Full HD
- Smart TV Kodak 42FHDX7XPRO LED Full HD 42 inches
- Smart TV Kodak 32HDXSMART de 32 pulgadas HD Ready LED
and more. In addition, Kodak HD LED TVs have also gone on sale at the lowest prices of 2020, partnering with Flipkart and Amazon for The Big Billion Days Sale and Great Indian Sale respectively. This sale, which took place between October 16-21, 2020, also included the new Android 7XPRO series, which is priced at just Rs 10,999 and is currently considered to be the most affordable Android TV in India.
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frequent questions
What happened to Kodak?
Kodak was driven out of the camera and photography business due to a series of mistakes. Here are some thoughts on the same:
- Ignorance of new technologies and inability to adapt to changing market needs started Kodak's downfall.
- Kodak invested its funds in the acquisition of many small companies, depleting the money that could have been used to promote sales of digital cameras.
- Kodak wasted time promoting the use of film cameras instead of emulating its competitors. Media and market feedback completely ignored
- By the time Kodak finally caught on and started selling and producing digital cameras, it was too late. Many large companies had already established themselves in the market, and Kodak could not keep up with the big boys.
- In September 2011, Kodak's stock price hit an all-time low of $0.54 per share.
- Kodak filed for bankruptcy in 2012.
Why did Kodak fail and what can you learn from its demise?
Kodak failed to understand that its strategy of betting on traditional film cameras (which was effective at one point) was now robbing the company of its success. Rapidly changing technology and evolving market needs have rendered the strategy obsolete.
Is Kodak still in the market?
Kodak filed for bankruptcy in 2012. Kodak's bankruptcy resulted in the formation of the Kodak Alaris company, a British organization that co-owns the Kodak brand along with the American Eastman Kodak Company.
When did Kodak close?
Kodak faced its demise in 2012.
Is the Kodak a good camera?
Kodak cameras and accessories were top quality and the first choices of professional photographers and others. The company was a winner in the analog era of photography. However, the company dove to hit rock bottom.
What is Kodak doing now?
Today, Kodak provides packaging, functional printing, graphic communications and professional services to companies around the world. Best known for making cameras, Kodak moved into drug manufacturing, taking out a $765m (£592m) loan from the US government in 2020.
Why was Kodak so successful?
Kodak adopted the 'razors and blades' business plan. The idea here was to sell the razors first at a small markup. After buying the razor, customers will have to buy the consumables (in this case, razor blades) over and over again; therefore, sell the blades at a high markup. Kodak's plan was to sell cameras at affordable prices with a small markup, and then sell the consumables such as film, printing sheets, and other accessories at a high markup.