Submitted by Kruthivasan Anantharamakrishnan

RUID: 196001865
Case Study 1 - The Eastman Kodak Company

Background:
The Eastman Kodak Company or simply called Kodak is an American imaging company, began in
the 19th century as an innovator of photography. It was founded in 1888 by George Eastman in
Rochester, New York. Kodak is known for creating a consumer market for amateur photography
and pioneering the technology that allowed Hollywood movies to be filmed. It is also responsible
for easy-to-shoot home movies and the introduction of digital photography. Kodak was also
smart enough to involve itself in the printing process of photos as well, and it made a large profit
specifically from film development alone. Kodak had the majority market share of the
photography industry by the close of the 1960s. (History Of Kodak | A Brief Look with 1ink.Com,
n.d.)

Kodak was also the first company to come up with a Digital Camera in 1975. However, due to an
unsure market and poor promotion, it eventually lost out to Japanese competitors that mastered
digital technology. Sony and Canon saw an opening and charged ahead with their digital cameras.
When Kodak decided to get in the game it was too late. The company failed to adapt to a new
marketplace and new consumer attitudes.

Key Issues:
The key issue as to why Kodak failed in the digital market was its resistance to change. This
directly relates to the concept of Radical Innovation. Radical Innovation is an innovation that is
new to the world that has a degree of differentness. The technology might be new to the world
or to an industry. Mostly radical innovations are new to the world and to that particular industry.
Kodak invented their first digital SC camera in 1975. The camera had a massive disruptive
potential. However, they just were not ready to market the product because at that period, their
film business was too lucrative that they did not want to risk losing it. Kodak was so blinded by its
success that it completely missed the rise of digital technologies. They thought the invention of
digital camera would cannibalize their film business. People evolve over a period of time and they
want something new all the time. (Dan, 2012)

People’s expectations change over time. Kodak simply did not think from a consumer’s
perspective. Instead, they played it safe by trying to keep their existing lucrative business intact.
The blind faith in marketing’s ability to overcome the threat from the new technology proved
fatal. This backfired when Sony and Canon entered the digital camera market and stole the show.
The company had a myopic view that it was in the film business instead of the story telling
business, believing that it could protect its massive share of market with its marketing. Kodak
invented but they never invested. (“Kodak’s Downfall Wasn’t About Technology,” 2016)
 Submitted by Kruthivasan Anantharamakrishnan
RUID: 196001865
Proposed Solution:
Even though Kodak followed a Competence-Enhancing Innovation which is a type of innovation
where a new product is built on the firm’s existing knowledge base, it did not believe in the film
to digital transformation. The solution to Kodak’s failure is not resisting change. It’s as simple as
that. The world is full of technologies and there is always room for innovation in a technology.
Many companies thrive on disruptive innovation and Kodak could have experience the same had
it not prevented itself from by not marketing a product that had a huge potential that could have
caused a huge disruption in the photographic industry.

Kodak had to enter the market at the right time. The consequence is that there are always
competitors in an industry and a company can lose its market in a matter of days -- if you’re not
on top of your game, both in terms of innovation and promotion of a product. Companies
generally see their disruptive forces affecting their industry. While it may seem like a threat,
disruption should be seen as a growth opportunity. It always grows market, but it also transforms
business models. Companies should be ready for that transformation. Even though Kodak had
the resources, time and investment capital, it lacked the foresight to make that transformation.
Instead, it became the victim of the aftershocks of a disruptive change.
 Submitted by Kruthivasan Anantharamakrishnan
RUID: 196001865
Reference:

Dan, A. (2012). Kodak Failed By Asking The Wrong Marketing Question. Forbes.

https://www.forbes.com/sites/avidan/2012/01/23/kodak-failed-by-asking-the-wrong-

marketing-question/

History Of Kodak | A Brief Look with 1ink.com. (n.d.). 1ink.Com. Retrieved February 4, 2021,

from https://www.1ink.com/blog/history-of-kodak-a-brief-look-with-1inkcom/

Kodak’s Downfall Wasn’t About Technology. (2016, July 15). Harvard Business Review.

https://hbr.org/2016/07/kodaks-downfall-wasnt-about-technology