Question

In 1975, Kodak had 90% of camera film sales and 85% of camera sales in the U.S. It also dominated the markets for photo paper, film processing equipment, and film processing services. It had deep expertise, strong brand loyalty, and strong relationships with photo shops. In that year, a Kodak engineer built a digital camera prototype. It was just a clunky lab construct, but he proposed developing a model for the market. Kodak executives rejected the proposal.

One year later, Konica offered the first compact digital camera to the market. Rapidly-improving digital cameras from several companies came to dominate the market within 35 years, and Kodak’s businesses of film, film cameras, photo paper, and film processing were displaced. Kodak eventually marketed its own digital camera, but it went bankrupt in 2012.

The question is, what strategy should Kodak have adopted regarding this new camera technology? Should it have done what it did? Should it have helped to destroy its core business by aggressively developing digital photography? Were there other strategies it could have adopted?

Answer 1

Kodak's should have adopted strategy regarding this new camera technology of being innovative and launching it in the market on selective basis to evaluate the response of customers. It should have done market research to measure the demand of the product and impact of the product on its own product range and market conditions. It should not have done what it did because it lagged behind other brands to adapt to the changes that happened and its products losing market share and having weak demand in market. It would not have helped to destroy its core business by aggressively developing digital photography. But it should not have ignored digital photography and the onslaught of such products in the market and rising consumer demand of cost effective and innovative products that it did not launch in the market. Other strategies it could have adopted is serving niche markets to understand the success of its new product and demand. It could have supplied to the same segments that were buying its other products and not ignored or take no action in the digital photography. It should not have focused just on profits initially and established its market presence. It should have invested in marketing and promotions in the distribution channels so that customers would have shown interest to buy and adopt the product. Its delay in launching the digital photography products decreased its popularity and relevance in market that has taken new ways of photography and sharing.