Kodak Struggles to Remain in Business

Source

Kodak Struggles to Remain in Business

What Can We Learn?

Kodak, the empire that made photography possible for the average person, is struggling to remain viable and in business.

George Eastman had a passion for photography and cameras. His passion took him to London, the center of the camera and photography world, where in 1880 he created several new inventions and patents in the industry. As often is the reality, Eastman had to work in another industry until he could make his living doing the work that inspired him, photography, cameras, and the photography processes.

George Eastman was the first person to develop the roll of film. Up to that time the photographic image was made by a dry plate method. Eastman had also patented a plate coating machine prior to his invention of the roll of film.

In 1892, upon returning to the USA, George Eastman founded the Kodak Company. Photography was still relatively new. Kodak opened up the wonderful world of photography to the average person. He is credited with creating amateur photography.

The Kodak marketing slogan was “You press the button and we do the rest.” Indeed for over a hundred years Kodak did 'the rest.'

Kodak provided the cameras, film developing, developing chemicals, and the paper to print the pictures on. At one point the city of Rochester, NY, the Kodak Corporate home, employed over 60,000 Kodak employees. Today the city has fewer than 10,000 Kodak employees.

The company manufactured products all over the world from their headquarters in Rochester, New York. They manufactured products in Canada, Mexico, Brazil, France, Germany, and Australia.

George Eastman’s four business principles were

· mass production at low cost

· international distribution

· extensive advertising

· a focus on the customer

Kodak also took the familiar and highly regarded growth and business sustainability strategies of diversifying and partnering with other companies.

They partnered with Motorola for 10 years to combine Kodak’s imagine science system with Motorola’s mobile device design. The partnership did much to improve the camera phone.

Kodak is also partnered with Chi Mei El of Taiwan. This partnership’s goal is to further apply the two companies’ abilities to display applications in items such as digital cameras and portable media players.

Kodak expanded their product lines to include digital cameras, digital video cameras, digital photo frames, imaging systems and sensors, printers, photo hosting service, and scanners.

The world’s first digital camera was invented and built by Steven Sasson an engineer at Kodak in 1975.

Yet, Kodak did not seem to capitalize on the digital market boom. Eastman-Kodak remained in the film photographic business until recently.

Kodak has not been without other business problems. There were lawsuits over patents and rights engaged with Polaroid and Apple. Their environmental policies were widely criticized and they were named one of the worst polluters in the USA.

In 2011 their stock dropped to an all time low of .54 a share. In 2010 Standard & Poors removed Eastman Kodak from its S & P 500 index. Eastman Kodak Company was removed from the Dow Jones Industrial Average index in 2004 after 74 years of being listed on the Dow.

Today, the future of the company is problematical as Chairman and CEO, Antonio M. Perez, and President and COO, Philip J. Faraci, have engaged the prominent international law firm of of Jones Dahy for advice.

What can students of business learn from this scenario? A business person, who is always a student of business, hopes to continually develop analytical skills and business abilities. The business student’s goals include creating successful modalities for their lives and work places.

The classical study of business shows that most of the business actions of the Eastman-Kodak company were correct, well-measured, and successful.

Yet, today Kodak is fighting for their very business lives.

What happened?

The author is pondering the passion of George Eastman. George Eastman had the passion. His passion drove him across an ocean to the center of photography world where he took a lowly bank teller job until he could afford work full-time at his passion. This passion brought him back to the USA where he founded an empire.

Passion for the thing you are doing. Passion creates whole worlds.

That conclusion is too simplistic for the author.

There are many reasons for the downfall of a once strong and viable company.

There is a thing called a Chinese Knot, where when one knot is untied, there is revealed another knot, and another knot, and another knot, and another knot……..

The answer as to “What happened?” is suspected to be more like the Chinese Knot.

Still, what happened?

More by this Author


Comments 47 comments

Mengqi Li 5 years ago

When I had the class IT for business last year. The textbook also gave the same example to emphasize the importance of technology.

Even when people used the film photographic cameras, Kodak was beaten by Fuji Film in my hometown. Fuji established a better relationship with the vendors in the tourism sites so no one sold Kodak film outside photo studios...


BusinessOpsMngmnt profile image

BusinessOpsMngmnt 5 years ago from USA Author

Yes, that is definitely part of why Kodak failed; they did not integrate the technology. Why do you think they did not integrate the technology?

The customer service with the vendors was also a problem. Why do you think Kodak did not practice good CRM?

(Mengqi, these are rhetorical questions, so feel free to answer them or not!)


Nathan Heermann 5 years ago

They did fail to integrate their product, I think they were focused on their core strength, film. And needed to move their business line with their new technology. George Eastman’s four business principles were great to the success of the Kodak, and I think they needed to use extensive advertising for the digital cameras. I remember the balloon fiesta in the 1990s and Kodak was the official sponsor. There with tons and tons of booths to sell film and disposable cameras. It wasn't till their one or two last years there (early 2000s) that they started to sell digital memory cards for cameras. Seems to me if the digital cameras was invented 1975 by Kodak that about 20 years later they should be selling it and promoting their new product.


BusinessOpsMngmnt profile image

BusinessOpsMngmnt 5 years ago from USA Author

Nathan, do you remember what Steve Jobs did when Apple brought him back to the co? He tossed out all the old 'cash cow' products and said 'take them to a museum.'

Kodak should have looked to the future too. I also remember the Kodak sponsorship of the Balloon Fiesta!


Carolynn Nguyen 5 years ago

Kodak's main focus was always film. They tried to enhance their company to digital, but by the time they did that, companies such as Nikon and Canon already blew them out of the water. Consumers trusted them for film, but Nikon and Canon for digital. Film photography is great and in my opinion the quality is still better than digital, but the film phase is over.


Sarah Hannigan 5 years ago

It is such a shame to see a company that has been around for years, and at the peak of their "season" really impacted people, via technology and versatility. Now with digital everything, maybe Kodak can make some form of a comeback since there are so many opportunities with digital... i know that Microsoft was making or planning on making a coffee table type of touch screen computer, where one can shuffle thru pictures, music, documents, etc. maybe kodak can get in on that with a special camera which is compatible with it... Kodak was great with film, and still is, but unfortunately they need to be up and coming with today's demand for digital.


HelpMeHarry profile image

HelpMeHarry 5 years ago from Sonoma CA

How is their effort to break into the ink jet printer market? Their approach was to lower the cost of printing by lowering the cost of ink. I have been a photographer for many years and Kodak taught me all the basics and I agree with the individual above that they just missed the digital market. I would of gladly followed them. It was all about trust.


Iris DuFresne 5 years ago

Kodak seems to be making the same mistakes Borders did. They are not keeping up with current technologies. Businesses need to be able to flow with the changes being made and keep up with what customers are wanting and expecting. When they try to stick what they know without bending or trying to keep up with competitors they will not be able to succeed.


asimon11 profile image

asimon11 5 years ago

I think that Kodak tried to be innovative but didn't follow up with it fully. They knew that cameras on cell phones would be a big thing and attract a lot of people but that is only targeting people in the cell phone market not the digital camera market, which is how most people take quality photos. Another problem is that they didn't focus on environmental factors. Kodaks' "throw away" cameras are not environmentally friendly at all so they are loosing out on a whole market of people purchasing their product.


John Peperas 5 years ago

Kodak stuck to the four principles. A successful company has to innovate and come up with new ideas. Evolving and updating the companies mission can help keep up to date. Purchase new equipment, use updated software or more locations.


Mandy Wittenbrink profile image

Mandy Wittenbrink 5 years ago

I personally believe that George Eastman’s four business principles were practical and doable many many years ago, but now in this generation where everything is technology based; the original principles need to be changed to accommodate to the technology era. Perhaps if Kodak can partner with Apple or Android where both companies offer thousands of different applications, Kodak could have an app dedicated to pictures or to buy products easy and fast, etc.

A bunch of companies need to realize that this generation and many generations to come are going to be all technology based sooner then later!!!


Dominique-Chairez 5 years ago from Burque, NM

George Eastman's principals were very innovative at the time, but as time went on, those principals did not follow and spark of technological balance. Kodak still has the power to comeback, by making some simple tweaks on their principals, for example:· mass production at low cost could be sustainable production at quality cost.

· international distribution to global interaction.

· extensive advertising to SMART advertising Specific, Measurable, Attainable, Realistic, and Time Oriented Ads.

· a focus on the customer to Live Customer Appraisal, where the customer is always in touch.

These all go along with the technological movement and sustainable practices that are moving businesses forward.

"It's a Kodak moment," no one will forget this and this is one reason why their business is still around.


BusinessOpsMngmnt profile image

BusinessOpsMngmnt 5 years ago from USA Author

This is a nice busines assessment. I also think Kodak has the power to come back in some form I just don't know if they are flexible enough OR have the passion it takes. the whole world is a lab for business students!


Dimitricoleld 5 years ago

I owned a kodak digital kodak camera and the issue I found was with their software that came with the camera. The software was vey simple but did not properly utilize the many capabilities of a digital camera. They seemed to keep it too simple while the competitors continued to introduce new features with digital cameras with a much easier interface to use. I though they marketed well but the product didn't match up.


eestes66 5 years ago

Kodak's decision to focus more on their film cameras instead of focusing on developing digital definetly contributed to their removal from the DOW JONES, and S&P 500. Since they invented the first digital camera, they could have been the industry leaders since they carry the Kodak name. Technological advancements are what keep businesses ahead of the competition. The business that invents the technology will lead that industry until their competitors learn to do it better. Choosing not to develop and market digit cameras right away, I think, is the number one reason why Kodak is falling far behind.


Kileen 5 years ago

I agree that both Kodak's name and reputation can help keep them afloat.

Keeping with your core quality is only as good as your bottom line; otherwise it's time to rethink. I personally feel they need to hire younger, more innovative professionals who can look outside their current film-box and develop new technologies. Who knows what they could come up with?


asipe02 5 years ago

Kodak is not keeping up with the changes in technology. It amazed me to find out they were the ones to make the first digital camera back in 1975 and they did not capitalize on that technology. It seems as if they were hanging on hoping that there would still be an large industry for film cameras. Some people prefer them, but the majority of people prefer digital.


ebarela 5 years ago

I agree that the passion that George Eastman diplayed for his product has been lost over the years by those who contol the company today. If Kodak is responsible for creating the first digital camera it makes sense that more driven people would have cpatilized on the idea and pursued it more. Another issue that this company faces is moving away from Eastman’s four business principles. Namely extensive advertising

and a focus on the customer. These are what made this company great at one time, and now one can hardly find a Kodak advertisement anywhere. One suggestion would be to partner with a leading digital provider and finally catch up with the digital age and bail on the film cameras.


acampbell72 5 years ago

I think this is more an example of striking out and not thinking something will catch on. Kodak invented the digital camera, but obviously it didn't think that it would catch on the way it did and that film would always be number one. So they didn't diversify, didn't attempt to get into the market segment, and when it became obvious that digital was the new way of doing things, kodak was ill preparedd and not able to adapt. This has been seen in other businesses as well. Failure to adapt to new techonolgy and ability to analyze new ideas and see the long term ramifications has really came to the forefront lately.


Andrea Halliburton 5 years ago

I am a huge fan of film. No matter how great digital gets it will never be the same quality. I think Kodak probably thought the same. They tried to still promote and focus on traditional film and didn't start improving the quality of their digital until after so many other people like canon had. It's kind of along the same lines as borders, personally I still love the bricks and mortar store or the traditional film but in today's world if you don't keep up with technology you won't survive. My interest and the few like me aren't enough to sustain a business.


wwhite02 5 years ago

Seeming that Kodak is such a large company I would assume that they would take every step into the new market. Focusing on traditional film didn't work, so if I was George Eastman I would take a step back and see where film is going today. Failure to adapt to "new" technology leads to a corruption of a business. I believe that since Kodak did make photography possible there is still a chance of come back. I would first start with being environmentally friendly. This is a concept that large businesses are taking very seriously, and could have a huge impact on a company.


Frank Lucero profile image

Frank Lucero 5 years ago

Kadak should use the Time Series Analysis in the short term and use just in time inventory. To capitalize on the market of the film industry, kodak needs to know that they need to keep up with times and sell digital cameras. They also could do some research and development to explore the variety of other products and services. They go to a markets where there is no competition, places that other companies that don't want to go. I think of the expression "the higher the risk and the higher the pay off", and this does seem like a gamble. However, with the appropriated planning, the company can stay in business.


Shane TR 5 years ago

I think sometimes it is easy to look at yourself as the MEGA company that no one can touch and so you do not worry about anything. Like the digital camera movement and them being slow to enter it I believe their top people saw it as a fad because no one could ever top the roll of film. Kodak was a huge company and I am sure they felt unbeatable and now trusting to much in what worked and not looking ahead to the future has killed them.


Luke Campbell 5 years ago

Kodak came into the market and was instantly a powerhouse. They were good at what they did. I agree with other students as to how surprised i was that they were the ones that introduced the first digital camera. However, i feel they may have gotten too comfortable with there past success and new innovation that they failed to continue to innovate and succeed in the massive market that digital technologies and cameras are a part of. In my opinion, Kodak had a great run that will always be remembered; but i think their time has passed and other major companies have captured the spotlight in this industry.


lilyperez 5 years ago

As I write this, I realize it has been said before. Kodak was king when it came to amature photography. However times and technology change. It can be risky to reach outside of your core product but if you put all your eggs in one basket you could lose everything.


MelinaChavez 5 years ago

Now a days society is based off of the newest and most innovative technology. Although Kodak did introduce the digital camera, they weren't able to adjust and improve the technology needed to keep up with its competitors. In order for Kodak to maintain its sustainability it needs to keep up and adapt the lastest technnology into producing products that are up to par with the markets needs and other large companies such as Apple. They definitely have the ability to bounce back into the market and compete with its competitors, they just have to expand their horizons and move out of their comfort zone.


tele r6 life 5 years ago

I agree with above posts that Kodaks biggest problem was not embracing technology. The article talks about passion and I think with passion, there can be the danger of sticking to what you love; that is, after all, why you started doing what you are in the first place. I'm curious if the Kodak founder didn't jump into the digital era because film is what he loved. It is great to have intrinsic motivations but a business person has to be careful that those motivations don't blind or limit their business. This is why being flexible and robust is so important.


Tiffany Rawls profile image

Tiffany Rawls 5 years ago

Every person has a passion and that can lead to success but a business cannot strive on passion alone. Passion does not keep customers like it used to. There are not as many people going to stores and getting the personal interaction; the company needs adapt to the changes we are surrounded by. With so many products available, company's need to show why a person should buy their product over the competitors. When Kodak started they were the ones everyone needed to go to. Now there are several different options available. Kodak needs specialization. Ideas are great but how one uses the ideas changes who will be more successful.


ameyer01 5 years ago

It's very disappointing to me that Kodak, the camera brand I have been using since childhood, is going out of business. They should have kept up with times so they could be booming right now like the rest of technology. I was very surprised to read that they were one of the main polluters in the U.S. To me this is very disgusting because we need to protect our planet. If companies can't follow this main precaution, they should either be forced to or be shut down. I believe this is one of the main reasons why their business went downhill. Having this information exposed to the public gives them a terrible image. Since globalization has made information easily accessible, more populations know about the ethical issues facing Kodak. If Kodak long decided to keep up with the ever-changing world, I believe they would still be producing strong.


Phillip Valencia profile image

Phillip Valencia 5 years ago

Failure is more important to capitalism than success. I think Kodak is a warning to all businesses. Businesses must change and adapt, and those that do the best job will succeed. Although Kodak is struggling, other businesses will adapt well to the new market and be successful were Kodak was not.


toliva01 5 years ago

My uncle was a 20 year employee of Kodak and was let go about 5 years ago. I believe he knew that the company was in trouble because there was at one time some sort of factory here for Kodak however it was closed and he was relocated to Indiana. This didn't do him much good though because he was let go anyway a couple years latter.


Jerome Martinez 5 years ago

The newest technology is always what customers want. If Kodak had focused on the new digital age and left behind their film ideologies they'd probably be just as big as companies like Nikkon. Heck, it was one of their engineers who came up with the first digital camera, how could they've not capitalized on that? It seems they just made the poor choice of staying film oriented.


schillz33 5 years ago

Kodak did not make a poor choice by keeping up with the real film industry when everyone was switching to digital because true film is an important art form, but it is a small industry. The main problem with the real film is that it became a small industry when the digital age came about and it is an industry that uses many chemicals and pollutants. They should have kept a group of people specializing in true film and focused on expanding the digital side of the company. Kodak failed to evolve properly.


mahenunk 5 years ago

Yes Kodak hasn't been yet to arise themselves as a competing industry in this technological world. Maybe one of their goals aren't absolutely met: the customer. Prior to me having a digital camera, I would use their disposal cameras for every occasion. Maybe they could combine with other companies. Maybe they can provide camera technology to current cell phones and smartphones. Maybe thinking outside the box could boost them into the limelight. They can not only add on to their existing products but could produce more features. Thats what it seem like today's products have tons of is features. I am not an analyst but its just my opinion.


bkhodaie 5 years ago

Kodak is a prime example of a business becoming complacent. For a business to continue to survive and improve they need to always be working on improving their company. In the business world your either innovating and growing or your dying. The point about them trying to break into the printer market seems to me to be a little too late. They fell behind and it will be a tough road to come back. And that road has been made more difficult by the fact that they are no longer on the on the DOW because it will make it extremely more difficult to raise the necessary capital to invest in their business


hahn8 5 years ago

Although George Eastman was extremely passionate about his product, i think his fault may have been too much passion. He believed in the art of using film too much and subsequently was blind to the technological changes going on around him. While other companies were transitioning to digital Kodak was still embracing film. Kodak's fault as a company was in inability to transition to digital when it more than any other company, with all its money and size, could have done it faster than anyone else. Once they realized they had made a mistake I believe it was to late to change their core competency to digital without seriously hurting the company and their profits. Sadly, I think this will be an endless downhill slide for Kodak. They will be replaced by the companies that saw the opportunity of digital and took advantage of it.


aallbrit 5 years ago

It is surprising to read that Kodak was the inventor of the digital camera, but they failed to dominate that industry. The struggle to keep up with technology was a big issue, but it seems like the company was worried about losing its core competency which was film. Photography is an art form, and developing film is part of that art form. Maybe Kodak should have divided the company into different sections to please the "old school" photographer while emphasizing innovative technology in the other section of the company.


Aaron Major profile image

Aaron Major 5 years ago

Wow, I found it to be very sad that once Kodak employeed 60,000 people and today are reduced to a mear 10,000. There can be many explinations for what happened with this business but I do not think that any should involve the passion of George Eastman. Once a corporation becomes that big it is unlikely that one mans passion could keep 60,000 people employeed even if he was a great businessman. What I think happened was that other corporations and companys soon came out with the same technology as Kodak. There are numerous brands of cameras and the field was spread to thin. There are also many various knock off brands of the disposable camera now. People go for the cheaper price and sacrifice a bit of resouliton in their pictures and Kodak looses out. This combined with the current economy is probably to blame for Kodaks unsuccessful run.


AaronLondon 4 years ago

the market for cameras has been dramatically changing. personal digital cameras are no longer necessary due to the increasing quality in the cameras on phones, ipods, and everything else. The only time expensive cameras are necessary is for professional reasons. Because of this, it seems like profits will be decreasing for any camera company. Unless Kodak manages to make consistent profits, it may be time to invest in a different product.


Alejandro Ga Ce 4 years ago

I think that at some point the industry of kodak was just supported by the fims and not the real cameras, I remember that some years ago in Mexico there were Kodak shops to print the photos in every mall and retailer store. Now with the digital cameras all those shops had disappeared. Also Now a days I think people like to buy more a cannon, Nikon or sonny digital cameras than a Kodak.


dsanch18 4 years ago

Kodak simply fell behind technologically. While they're in a bit of a hole, they still do have something going for them that a lot of other companies don't: longevity. As someone else mentioned, they have a very famous slogan in "A Kodak Moment." They've also been very famous for years, and everyone already knows the name Kodak.

Unfortunately, this advantage can also work against them, as Kodak may be associated with something "old," and of "obsolete." I think that if Kodak can use its reputation to its advantage, while avoiding the negatives, that they could make a major leap back into the competition.

Another approach might be to try to develop innovative products. Truly convince people that you are in on the future. This can be risky or expensive, but it works for companies like Apple who release new versions of their products quite frequently.


TristanBurman 4 years ago

Kodak did not recognize photography was moving toward an all digital market. As a photographer, I appreciate the art of film photography, but it has almost become extinct. The Motorolla partnership was the direction I think Kodak should have gone. If they had adapted to the market and began exploring digital and cellular devices they may still be around today. I agree with allbrit,it is surprising they were the first to develop a digital camera but did nothing to expand on it. Kodak was successful because they opened up photography to everyone. It is disappointing they did not recognize their digital medium would make photography even more accessible.


Varissa profile image

Varissa 4 years ago from Albuquerque, NM

I was surprised to learn that Kodak was first to invent the digital camera. They failed to think ahead and see the potential market that their invention had.They could have set the standards of quality for the digital camera. Instead they focused on what they did best, film. This is similar to companies like Borders who focused on the books they sold instead of the growing popularity of purchasing online and e-Readers.

A lesson a business student can learn from Kodak is to always be innovative and take risks. Those risks can potentially be a positive turning point in the company.


jtal6956 4 years ago from Albuquerque

Kodak failed to update its technology just like blockbuster did not update to today's standards like Netflix. If a business fails to update with technology and faster ways of pleasing their customers, they will fall behind and then eventually crash and go under. Kodak is out of date technology and to be successful like its competitors it needs to get better digital quality and faster print times that don't take hours but merely seconds if done properly.


Coopis 4 years ago

Jordan Cooper Op. 300-001

Kodak's extremely late entry into the digital camera market killed the company. The standard for photography now is digital cameras. Even though Kodak is a well known company, competitors like Canon entered into the digital camera market extremely early. Canon focused interely on the digital market, making an educated risk that the digital market would surpass the film market in the future. The gamble paid off, once a relatively unknown company, Canon is now one of the leading suppliers of digital cameras and equipment.

Kodak has been trying for years to reclaim some market share, now understanding its failures. It is now too late, with Canon now the dominant and most well known company. It will be near impossible for Kodak to effectively take back its share.

This is a perfect example of how important it is to forecast customer expectations and technology trends, and how it greatly effects business.


saidhood aka sedhood 4 years ago

i liked kodak!!


aperez 4 years ago

adapting is a must, businesses will fail if they do not change with time.

    Sign in or sign up and post using a HubPages Network account.

    0 of 8192 characters used
    Post Comment

    No HTML is allowed in comments, but URLs will be hyperlinked. Comments are not for promoting your articles or other sites.


    Click to Rate This Article
    working