By Lanre Amodu
When talking of legendary companies that practically shaped the world and the way it is perceived, it is difficult not to mention Kodak.
The company was a giant in the business of capturing the moment and preserving memories. The Eastman Kodak Company, simply known as Kodak, was established in 1888 by George Eastman and Henry A, Strong.
For the most part of the 20th century, Kodak remained dominant in the business of photographic film. From inception, the strategy of the company was to sell inexpensive cameras.
However, the large profit margin came from the sale of consumables such as film, paper and chemicals.
One of Kodak’s engineers, Steve Sasson, invented the first ever digital self-contained camera in 1975. While it wasn’t the first camera to produce digital images, it was the first to be portable- hand-held.
The invention was so significant to the evolution of photography that in 2009, Steve Sasson was awarded by President Barack Obama the National Medal of Technology and Innovation, which was the highest honour that the United States government can bestow on an inventor or a scientist. He was also awarded the Progress Medal and Honorary Fellowship of the Royal Photographic Society in 2012.
Considering how huge the invention was, it must have perpetuated Kodak as a market leader right? Wrong! Actually, Kodak only shelfed it and didn’t use it.
Recall that I mentioned earlier that the major source of profit for the company was the sales of consumable; the portable digital camera would have affected the company’s sales of films because the camera was filmless.
To avoid “spoiling its own market by its own product”, Kodak management decided to maintain the existing business model.
As at 1976, Kodak enjoyed 90% sales in the film market and 85% sales in the camera market in the U.S. It was difficult to imagine a future that wouldn’t have film in it!
So confident was Kodak of its status that it turned down the opportunity to serve as the official film for the Los Angeles Olympics of 1984.
Nature abhors vacuum, they say, so Fujifilm had its much need opportunity to win the sponsorship rights. That opportunity established Fujifilm, a Japanese company, as a force in the U.S. and it went on to open its plant, embark on aggressive marketing and take over the market.
Meanwhile, Kodak was unsuccessful in penetrating the Japanese market and even filed a complaint with the World Trade Organisation, which was rejected. Finally, Kodak faced its fears of the impending digital age; the company embarked on a decade-long journey in the 1990s to migrate to digital photography.
They employed several strategies unsuccessfully to delay the digital era. Several of their customers had already migrated.
Soon, the company began to struggle due to a decline in sales and its slowness to migrate to digital photography.
It is ironic that 2012, the year that Steve Sasson received a Progress Medal from the Royal Photography Society for his outstanding contributions, particularly the invention of the portable digital camera, was the same year Kodak filed for bankruptcy.
Fujifilm, on the other hand, was reported to have handled the migration quite well. According the reports, as far back as the early 1980s, the company had started to evolve plans for the switch.
The three-pronged strategy included the plan to squeeze as much money as it could from the film business, to prepare for the digital migration and to develop new business lines. As at 2018, the company acquired 50.1% controlling shares in Xerox for $6.1 billion.
The worst problem you can have is to be afraid of your own ideas and your own future. Rather than struggle to hold on to a passing trend, prepare yourself for the future.
If you don’t innovate, someone else will. Thanks for reading my article today. I would really love to hear from you.
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