KODAK CASE STUDY

Kodak Case Study

Kodak Case Study

Answer 1)

The bankruptcy filing announced Kodak marks the end of a long decline of an icon of American industry. Development of victim digital photography, Kodak has not managed to convert from his job as a chemist. A classic example of a leading company in its field (the silver photo) who dies and unable to take advantage of new technology. The reality is more nuanced. Kodak is actually one of the first to have actively worked to digital photography. In 1992, one of my projects for customers at the time, we bought a digital camera. It was a Kodak DCS 100, and it cost 220.000F (about 50K Euros today). We cannot say that Kodak did not know the digital revolution! Instead, Kodak was very active in the area and is causing a great many patents, which incidentally are now the last source of corporate value. The company was not unworthy either in the field of digital cameras that it still held an honorable place recently. Kodak did not miss the digital revolution, but she was a victim of the classic innovator's dilemma, described by researcher Clayton Christensen. This dilemma explains the failure of breakthrough innovation in terms of business model. Fully aware of the development of digital, since it was the instigator, Kodak did not want to promote it in a determined manner for one simple reason: to protect its core business of the time, the sale of silver films. The best evidence is that the company first tried to force the digital in the traditional mold, invented the digital movie (the pathetic APS ). Force the breakthrough innovation in the mold of traditional activity is a typical reaction of "jam" (cramming in English). The result is suffocation. Other reaction: while the decline of silver was committed, Kodak decided to resist and has increased its promotional budgets to resist its biggest competitor at the time (eg the Olympic Games in Sidney in 2000), Fuji. At the time, the main indicator of performance was the market share in the global duopoly, and even a small loss was unthinkable for Kodak, as this would have led to a sharp fall in stock market, that the CEO could not afford. Thus, the traditional activity continued to receive the majority of company resources, even though it "knew" she was convicted.

The example thus shows that a Kodak company dies not for ignoring a disruptive innovation (this is rarely the case) but have been prevented from acting to expand it, despite its good will and consciousness danger, because of the success of its dominant activity. The failure of breakthrough innovation thus the result of a clash of business models between the old and new. The company is a prisoner of its business model. As indicated in Christensen, the business model determines the opportunities that we find attractive, and those we find unattractive. In this case, the business model of the digital camera Kodak made ...