KodakCase StudyMIS 5402 - Spring 2016

Jason NorenHamp ColzieLindsey SoloveyYang CaoAmber Roberts

The Foundation

To understand why Fisher’s attempt to transform Kodak failed and if a different strategy throughout the 80’s and 90’s would have changed Kodak’s position, we must first understand the context of the company.

• Kodak began in 1880s – “Nothing is more important than the value of our name and the quality it stands for” - George Eastman

• 1888 - “You Press the Button, We Do the Rest”. The slogan Eastman introduced for the revolutionized personal camera.

• 1962 – $1B sales, 75,000 employees• 1969 – Apollo 11 mission• 1975 – Invented first digital camera

Didn’t pursue the market on this!

#1 Failure Photo Credit: NASA

Strategy of the 80s

• Poor investment decisions– Acquisitions in Pharma, Textile, Medical & Chemical industries

• Overconfident - reluctant to acknowledge competition & adopt digital stance– The mindset that people “won’t want it and we can make the

same thing if we want to.”• Managers didn’t support products that weren’t as profitable

– Better film, better paper mentality• Attempted to pursue film based digital imaging but failed due to

higher costs and poor marketing

The focus was on maintaining, not innovating

CEO Shuffle

• Ineffective strategic succession plan led to many changes at the top in a short period of time– 1983 to 1990 – Colby H. Chandler– 1990 to 1993 – Kay R. Whitmore– 1993 to 2000 – George MC Fisher– 2000 to 2005 – Daniel A. Carp

• Leadership was not diversified– Came through manufacturing and MIT, same school of thought– Risk averse– Focused on maintaining instead of innovating

Competition

• 1976 - 90% of film and 85% of camera market share in US.• Turned down ‘84 Olympics – Fujifilm took opportunity

– Sparked Fuji’s firm foothold in US.– Increased share to 17% of US photo market in 1997

• Kodak didn’t believe American consumer would desert the Kodak brand

Kodak and the Digital Revolution, Gavetti et al.

Kodak and the Digital Revolution, Gavetti et al.

Fisher’s Strategy

• Divesting unrelated business units• Focus on core business – imaging• Build international markets

– Ventures with Chinese government

• Tackle the digital technology realm– Contacted Bill Gates & other computer execs– Invested $5B in R&D for digital imaging

Cover Photo By Timothy Rue/Corbis; Digital Illustration By Lisa Knouse Braiman

He Tried But…

Fisher’s Failures

• Unable to change culture of middle management– Didn’t understand the digital world that Fisher

was attempting to transform Kodak into

• The majority resisted initiatives to reinvent the company

Was Kodak’s Fall Inevitable?

• Persuasive Leadership is the key differentiator• Failure of change management

– Dealing with lack of diversity in management

– Film-focused middle management– Razor-blade culture was ingrained

• Early entry but late movers in digital imagingThe Answer:

The fall was not inevitable and actually foreseen!Diverse leaders + fresh styles and ideas =

SUCCESS

http://media.democratandchronicle.com/kodaknext/

What Could Have Been

Kodak was in position to lead in digital imaging if they had adopted different strategy in 80s and 90s.

• Kodak was the firm that “blew” away the competition and they could still be doing that if they used opportunity to be the disruptor

• Kodak developed the first digital camera and could have introduced it to the market and lead the competition while continuing to enjoy brand loyalty they built over many decades

• Kodak could have purchased and absorbed companies continuing to innovate in digital photography if the change could not come from within...their position could be more like Google and Facebook

References

Gavetti, G., Henderson, R., & Giorgi, S. (2005). Kodak and the Digital Revolution (A). HBS No. 9-705-448. Boston, MA: Harvard Business School Publishing.

http://www.computerworld.com/article/2849847/disruptive-technology-dead-companies-do-tell-tales.html

http://www.forbes.com/sites/chunkamui/2012/01/18/how-kodak-failed/#b80380cbd6ae

http://strategytank.awardspace.com/articles/What%20went%20wrong%20at%20Eastman%20Kodak.pdf

http://www.strategyvault.com/2012/01/27/case-study-eastman-kodak/

http://knowledge.wharton.upenn.edu/article/whats-wrong-with-this-picture-kodaks-30-year-slide-into-bankruptcy/

http://business.time.com/2012/01/20/in-kodak-bankruptcy-another-casualty-of-the-digital-revolution/

http://media.democratandchronicle.com/kodaknext/