Analysis of Kodak

Analysis of Kodak (A) HBR case

What is your opinion on Kodak's actions as regards to digital imaging until 1997? To what extent were they appropriate?

The organizations mantra has been focused on traditional film for so long it was difficult for them to transition their thinking and understand the potential risk for that business to decline. Once Fisher took over, he was anxious to move into electronics and hardware based on his background. They moved directly from a wary and shallow approach to a speedy and narrow approach by focusing on hardware. Below I addressed each action individually.

In 1983, Chandler created a "photographic and information" management division to explore new technologies

Although this was a move in the right direction and the timing was fine, it was a very casual approach to look at changing the business. It was inappropriate because they used Kodak people from the traditional business rather than computer engineers whose skills are better suited for this exploration. According to John White, "Kay and Colby would tell you they wanted change, but they didn't want to force the pain on the organization" (Gavetti et al, 2003). Perhaps the company culture was still focused on the traditional film market and declining market share.

Mid-80s Kodak developed a research lab for electronics in Japan

Again, this is another casual and inappropriate attempt based on a "gut feeling" according to CTO at the time (Gavetti et al, 2003). They were not financed directly and had to lobby for funding from different business units. Although they developed the Kodakvision video system, and created some alliances, their heart was still not in it. According to Leo Thomas, "We're moving into an information-based company (but) it's very hard to find anything (with profit margins) like color photography that is legal" (Gavetti et al, 2004, 5).

From 1986 to 1989 they launched an image sensor, created an electronic photography division and produced over 50 new products. Launched image sensor in 1986 and in 1987 a division called "electronic photography" was created.

It seems strange that they go in head first at this point and develop so many products. It might be a situation of putting the cart before the house. Although I commend them for their efforts, I did not find any evidence of them researching customer needs and building products accordingly.

From approximately 1990 to 1993 launched the Photo CD, Photo CD player, and a professional digital camera. The digital camera took a backseat to the Photo CD during this period.

The hybrid approach is film and digital imaging seems like another last effort to save film. The time and energy might be better served on the long-term needs of the customer, technology trends and understanding costs. As stated in the case, "The project was expected to be a $600 million business by 1997 with $100 million earnings from operations, but there was little evidence that consumers were willing to pay $500 for a player that plugged into a TV, plus $20 per disk" (Gavetti, 2004, 6). They were also targeting the consumer market instead of the commercial market. This action was inappropriate and too little too late. Late in 1993 Chandler left the position of CEO and was replaced by George Fisher. At this time $5 billion had been spent on digital photography R&D (Gavetti, 2004, 6).

Fisher Era

In 1994, Fisher created a "digital and applied imaging division" to unify the efforts.

I think was this an appropriate and timely move given that Fisher had just been hired. The cases states that at "one point the company was engaged in developing 23 different scanner projects" (Gavetti et al, 2004, 7). He also hired some talent from Apple Computers and IBM to help support this division.

Launched the digital imaging station and other items to take things from the labs to the market

Although launching a digital imaging station for retailers seems timely, I am not sure that bringing all of the items from the lab to the market is appropriate. Although the technology research has been done, they