Eastman Kodak: Meeting the Digital Challenge

Eastman Kodak: Meeting the Digital Challenge

Issue: The main issue behind this case is the problems faced by the Eastman Kodak Company in the process of changing to Digital technology in printing. It failed to establish market share and market leadership in the Digital sector.

Summary: George Eastman began the commercial manufacture of a new type of dry photographic plate in 1880 in order to reduce the risk regarding with the old technical photo graphic plates. In 1884 he developed silver halide paper based photographic film and 1888 he developed the first fully portable camera. With these two photographic became a leisure activity for the people. On October 24, 1901 the company name changed to the Eastman Kodak Company.

Their main strategy was to provide a fully integrated photographic service supplying the camera and film through to processing and printing. They attracted the people with their advertising slogan “You push the button, we do the rest”. Eastman Kodak came to dominate the world market for photographic film, photographic paper and chemicals, and low cost cameras.

Eastman established seven basic business principles for Kodak in order to achieve success.

Mass Production at low cost

International distribution

Extensive advertising

A focus on the customer

Fostering growth and development through continuing research

Treating employees in a fair, self- respecting way

Reinvesting profits to build and extend the business

Kodak continued to build its dominant position in market with vertical integration combined with continuous innovation and product development.

In 1970s they faced stiff competition from Japanese in camera industry and Fuji photo Film Company in film.

Fuji was become a main competitor through sponsorship of 1984 Olympic games in Los Angeles.

In 1980s they faced so many hic-cups like they forced to withdrawal in instant photography and some of their innovations were unsuccessful. In 1983 the share prices were falling due to this reason Colby Chandler took over as a chairman and CEO. He mainly focused on Imaging and Data storage products. In the period of 1980s to early 1990s there was a rapid development in image developing and new printing and reprographic products through acquisitions and joint ventures with others companies in order to access the technology.

Due to the stiff competition Kodak’s electronic sales amounted to a little under 5 % of total sales in 1984.

Kodak announced its Photo CD system in 1990 with the collaboration of Philips.

But Eastman was the major Photographic chemicals, fibres, plastics, printing inks and nutritional supplements in 1980s. These were useful for the cash flow to invest in researching Digital images.

Chandler cut down the costs and reshaped the organizational structure. He cut down the employment from 136,500 in 1982 to 110,000 in 1992. He changed the