Kodak Case Analysis

Backg

Page | 3

Overview

The case starts with the premise of how Kodak came to be synonymous with photography in the late

19th century and grew to be an industry stalwart over the course of the first half of the 20th century

in the United States. Being a technologically advanced company that placed customer needs first,

backed with a strong emphasis on advertising, low-cost mass production and continuous innovation,

Kodak decimated most of its competition during the imaging revolution in the early 1900s.

Investing heavily early-on in research, the company introduces superior color film technology in the

1960s after 4 decades of research. The corporation’s competition was blindsided by the advent of

Kodak’s consistently reproducible new product offerings and scrambled to launch products that

could compete in the new market. This prescience on Kodak’s part bolstered the company to

monopolize the imaging industry, unchallenged.

Fast forwarding to 1980s, Kodak is faced with a changing landscape within the imaging industry. The

case clearly illustrates how the culture of a company plays a crucial role in either its continued

dominance or pitiful downfall. Over the course of 90 years, the company has transformed from a

consumer-focused, technologically advanced enterprise to one that solely cares about the bottom

line. Despite spending billions on research, Kodak ignores its competitors’ advancements, its internal

technological innovations, and especially analyses of declining film sales and reducing market shares.

The company continues to revel in its past glory and is so steeped in its razor-blade business model

that it refuses to acknowledge it may be “missing the boat”.

The case discusses Kodak’s attempt to navigate the choppy waters of the changing landscape as it

struggles with an identity crisis, and its efforts to maintain its position as a pioneer within an

increasingly competitive industry.

Page | 4

1. Evaluate Kodak’s strategy in traditional photography. Why has the company been so

successful throughout the history of the industry?

● George Eastman developed and the patented the dry plates photographic plates, which

were far superior and convenient to use than the traditional, cumbersome wet plate

technology. Mr. Eastman eventually developed the transparent film roll as we have come to

know it, a significant advancement from glass plate photography.

● Despite some early challenges, Kodak was one of the earliest imaging companies whose

innovations cemented its position as a pioneer in photography and soon became a

household name. The company took pride in its quality of products and strived to maintain

its competitive edge through use of extensive advertising, marketing strategies, low-cost

mass production and consumer centric products.

● Being an early player in the game, Kodak leveraged its brand presence and forged strong

relationships with retailers to capture large markets. This bolstered the company’s position

in the market since customers preferred a familiar Kodak product over competitors with

advanced offerings. In addition to that, their photo-finishing process soon became an

industry standard and was developed to be easily replicated in photo shops, a crucial

process that many competitors struggled with - making their technologies just as efficient

and consistent. Kodak rose to prominence in an era of less competition and continued to use

its speed to market, customer loyalty and technological advancements to squash emerging

players within the industry.

● The company remained very innovative in its first four decades of existence, spending

millions in continuing research, pioneering in color films and launching home-movie cameras

in the 1930s. Kodak had the ability to foresee the future of imaging in the 1920s and

invested early in researching color film technologies. The company decimated its

competition during the era of color film and grew substantially to rake in $10 billion in

revenue by 1981 and monopolized the film and camera market in the United States.

● Kodak’s biggest success and market dominance in its early years could be attributed to their

“razor-blade” business model - where the camera equipment was intentionally designed to

be minimalistic and low priced, and most of the revenue was generated from the sale of

films. The company followed Eastman’s philosophy of mass production at low cost, and

rarely experimented with new technologies that could hurt its bottom line. The company

capitalized the