There are few corporate blunders as staggering as Kodak's missed opportunities in digital photography, a technology...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
There are few corporate blunders as staggering as Kodak's missed opportunities in digital photography, a technology that it invented. This strategic failure was the direct cause of Kodak's decades-long decline as digital photography destroyed its film-based business model that set Kodak on the path to bankruptcy. Steve Sasson, the Kodak engineer who invented the first digital camera in 1975, characterized the initial corporate response to his invention this way: "But it was filmless photography, so top executives" reaction was, 'that's cute-but don't tell anyone about it." Kodak inability to see digital photography as a disruptive technology, even as its researchers extended the boundaries of the technology, would continue for decades. To understand how Kodak could stay in denial for so long, let us go back to a story that Vince Barabba, a former Kodak executive, recounts from 1981, when he was Kodak's head of market intelligence. Around the time when Sony introduced the first electronic camera, one of Kodak's largest retailer, photo finishers, asked him whether they should be concerned about digital photography. With the support of Kodak's CEO, Barabba conducted a very extensive research effort that looked at the core technologies and likely adoption curves around silver halide film versus digital photography. The results of the study produced both "bad" and "good" news. The "bad" news was that digital photography had the potential capability to replace Kodak's established film based business. The "good" news was that it would take some time for that to occur and that Kodak had roughly ten years to prepare for the transition. The study's projections were based on numerous factors, including: the cost of digital photography equipment; the quality of images and prints; and the interoperability of various components, such as cameras, displays, and printers. All pointed to the conclusion that adoption of digital photography would be minimal and non-threatening for a time. History proved the study's conclusions to be remarkably accurate, both in the short and long term. The problem is that, during its 10-year window of opportunity, Kodak did little to prepare for the later disruption. In fact, Kodak made exactly the mistake that George Eastman, its founder, avoided twice before, when he gave up a profitable dry-plate business to move to film and when he invested in colour film even though it was demonstrably inferior to black and white film (which Kodak dominated). Barabba left Kodak in 1985 but remained close to it. Thus he got a close look at the fact that rather than prepare for the time when digital photography would replace film, as Eastman had with prior disruptive technologies, Kodak chose to use digital to improve the quality of film. This strategy continued even though, in 1986, Kodak's research labs developed the first mega-pixel camera, one of the milestones that Barabba's study had forecasted as a tipping point in terms of the viability of standalone digital photography. The choice to use digital as a prop for the film business culminated in the 1996 introduction of the Advantix Preview film and camera system, which Kodak spent more than $500M to develop and launch. One of the key features of the Advantix system was that it allowed users to preview their shots and indicate how many prints they wanted. The Advantix Preview could do that because it was a digital camera. Yet it still used film and emphasized print because Kodak was in the photo film, chemical and paper business. Advantix flopped. Why buy a digital camera and still pay for film and prints? Kodak wrote off almost the entire cost of development. Kodak also suffered several other significant, self-inflicted wounds in those pivotal years: In 1988, Kodak bought Sterling Drug for $5.1B, deciding that it was really a chemical business, with a part of that business being a photography company. Kodak soon learned that chemically treated photo paper isn't really all that similar to hormonal agents and cardiovascular drugs, and it sold Sterling in pieces, for about half of the original purchase price. In 1989, the Kodak board of directors had a chance to take make a course change when Colby Chandler, the CEO, retired. The choices came down to Phil Samper and Kay R. Whitmore. Whitmore represented the traditional film business, where he had moved up the rank for three decades. Samper had a deep appreciation for digital technology. The board chose Whitmore. As the New York Times reported at the time, "Mr. Whitmore said he would make sure Kodak stayed closer to its core businesses in film and photographic chemicals." Samper resigned and would demonstrate his grasp of the digital world in later roles as president of Sun Microsystems and then CEO of Cray Research. Whitmore lasted a little more than three years, before the board fired him in 1993. For more than another decade, a series of new Kodak CEOS would bemoan his predecessor's failure to transform the organization to digital, declare his own intention to do so, and proceed to fail at the transition, as well. George Fisher, who was lured from his position as CEO of Motorola to succeed Whitmore in 1993, captured the core issue when he told the New York Times that Kodak "regarded digital photography as the enemy, an evil juggernaut that would kill the chemical-based film and paper business that fuelled Kodak's sales and profits for decades." Fisher oversaw the flop of Advantix and was gone by 1999. The story did not change for another decade. Kodak now has a market value of $140m and teeters on bankruptcy. Its prospects seem reduced to suing Apple and others for infringing on patents that it was never able to turn into winning products. Kodak's strategists and planners not only presided over the creation of technological breakthroughs but was also presented with an accurate market assessment about the risks and opportunities of such capabilities. Yet Kodak failed in making the right strategic choices. Answer all the questions. 1. According to you what could have been the reason for Kodak to move slowly in response to the changing External Environment. 2. Giving justifications, propose and explain a Management Principle that you think can be used by organizations operating in fast changing business environment. 3. "Planning for a very long term as well as for a very short term can be equally problematic." Give opinion in favour or against the statement referring to the Kodak's case. This Management Assessment has been solved by our Management experts at TVAssignmentHelp. Our Assignment Writing Experts are efficient to provide a fresh solution to this question. We are serving more than 10000+ Students in Australia, UK & US by helping them to score HD in their academics. Our Experts are well trained to follow all marking rubrics & referencing style. Be it a used or new solution, the quality of the work submitted by our assignment experts remains unhampered. You may continue to expect the same or even better quality with the used and new assignment solution files respectively. There's one thing to be noticed that you could choose one between the two and acquire an HD either way. You could choose a new assignment solution file to get yourself an exclusive, plagiarism (with free Turnitin file), expert quality assignment or order an old solution file that was considered worthy of the highest distinction. There are few corporate blunders as staggering as Kodak's missed opportunities in digital photography, a technology that it invented. This strategic failure was the direct cause of Kodak's decades-long decline as digital photography destroyed its film-based business model that set Kodak on the path to bankruptcy. Steve Sasson, the Kodak engineer who invented the first digital camera in 1975, characterized the initial corporate response to his invention this way: "But it was filmless photography, so top executives" reaction was, 'that's cute-but don't tell anyone about it." Kodak inability to see digital photography as a disruptive technology, even as its researchers extended the boundaries of the technology, would continue for decades. To understand how Kodak could stay in denial for so long, let us go back to a story that Vince Barabba, a former Kodak executive, recounts from 1981, when he was Kodak's head of market intelligence. Around the time when Sony introduced the first electronic camera, one of Kodak's largest retailer, photo finishers, asked him whether they should be concerned about digital photography. With the support of Kodak's CEO, Barabba conducted a very extensive research effort that looked at the core technologies and likely adoption curves around silver halide film versus digital photography. The results of the study produced both "bad" and "good" news. The "bad" news was that digital photography had the potential capability to replace Kodak's established film based business. The "good" news was that it would take some time for that to occur and that Kodak had roughly ten years to prepare for the transition. The study's projections were based on numerous factors, including: the cost of digital photography equipment; the quality of images and prints; and the interoperability of various components, such as cameras, displays, and printers. All pointed to the conclusion that adoption of digital photography would be minimal and non-threatening for a time. History proved the study's conclusions to be remarkably accurate, both in the short and long term. The problem is that, during its 10-year window of opportunity, Kodak did little to prepare for the later disruption. In fact, Kodak made exactly the mistake that George Eastman, its founder, avoided twice before, when he gave up a profitable dry-plate business to move to film and when he invested in colour film even though it was demonstrably inferior to black and white film (which Kodak dominated). Barabba left Kodak in 1985 but remained close to it. Thus he got a close look at the fact that rather than prepare for the time when digital photography would replace film, as Eastman had with prior disruptive technologies, Kodak chose to use digital to improve the quality of film. This strategy continued even though, in 1986, Kodak's research labs developed the first mega-pixel camera, one of the milestones that Barabba's study had forecasted as a tipping point in terms of the viability of standalone digital photography. The choice to use digital as a prop for the film business culminated in the 1996 introduction of the Advantix Preview film and camera system, which Kodak spent more than $500M to develop and launch. One of the key features of the Advantix system was that it allowed users to preview their shots and indicate how many prints they wanted. The Advantix Preview could do that because it was a digital camera. Yet it still used film and emphasized print because Kodak was in the photo film, chemical and paper business. Advantix flopped. Why buy a digital camera and still pay for film and prints? Kodak wrote off almost the entire cost of development. Kodak also suffered several other significant, self-inflicted wounds in those pivotal years: In 1988, Kodak bought Sterling Drug for $5.1B, deciding that it was really a chemical business, with a part of that business being a photography company. Kodak soon learned that chemically treated photo paper isn't really all that similar to hormonal agents and cardiovascular drugs, and it sold Sterling in pieces, for about half of the original purchase price. In 1989, the Kodak board of directors had a chance to take make a course change when Colby Chandler, the CEO, retired. The choices came down to Phil Samper and Kay R. Whitmore. Whitmore represented the traditional film business, where he had moved up the rank for three decades. Samper had a deep appreciation for digital technology. The board chose Whitmore. As the New York Times reported at the time, "Mr. Whitmore said he would make sure Kodak stayed closer to its core businesses in film and photographic chemicals." Samper resigned and would demonstrate his grasp of the digital world in later roles as president of Sun Microsystems and then CEO of Cray Research. Whitmore lasted a little more than three years, before the board fired him in 1993. For more than another decade, a series of new Kodak CEOS would bemoan his predecessor's failure to transform the organization to digital, declare his own intention to do so, and proceed to fail at the transition, as well. George Fisher, who was lured from his position as CEO of Motorola to succeed Whitmore in 1993, captured the core issue when he told the New York Times that Kodak "regarded digital photography as the enemy, an evil juggernaut that would kill the chemical-based film and paper business that fuelled Kodak's sales and profits for decades." Fisher oversaw the flop of Advantix and was gone by 1999. The story did not change for another decade. Kodak now has a market value of $140m and teeters on bankruptcy. Its prospects seem reduced to suing Apple and others for infringing on patents that it was never able to turn into winning products. Kodak's strategists and planners not only presided over the creation of technological breakthroughs but was also presented with an accurate market assessment about the risks and opportunities of such capabilities. Yet Kodak failed in making the right strategic choices. Answer all the questions. 1. According to you what could have been the reason for Kodak to move slowly in response to the changing External Environment. 2. Giving justifications, propose and explain a Management Principle that you think can be used by organizations operating in fast changing business environment. 3. "Planning for a very long term as well as for a very short term can be equally problematic." Give opinion in favour or against the statement referring to the Kodak's case. This Management Assessment has been solved by our Management experts at TVAssignmentHelp. Our Assignment Writing Experts are efficient to provide a fresh solution to this question. We are serving more than 10000+ Students in Australia, UK & US by helping them to score HD in their academics. Our Experts are well trained to follow all marking rubrics & referencing style. Be it a used or new solution, the quality of the work submitted by our assignment experts remains unhampered. You may continue to expect the same or even better quality with the used and new assignment solution files respectively. There's one thing to be noticed that you could choose one between the two and acquire an HD either way. You could choose a new assignment solution file to get yourself an exclusive, plagiarism (with free Turnitin file), expert quality assignment or order an old solution file that was considered worthy of the highest distinction.
Expert Answer:
Answer rating: 100% (QA)
1 Kotak was a successful company and its aim was to focus on existing customers and their need The main reason for Kodak to move slowly in response to the changing external environment was the failure ... View the full answer
Related Book For
Strategic Management and Competitive Advantage Concepts and Cases
ISBN: 978-0133127409
5th edition
Authors: Jay B. Barney, William Hesterly
Posted Date:
Students also viewed these management leadership questions
-
Let us go back to Circular Files market value balance sheet: Who gains and who loses from the following maneuvers? a. Circular scrapes up $5 in cash and pays a cash dividend. b. Circular halts...
-
The photo shows Steve Hewitt and his daughter Gretchen. Is Gretchen touching her dad, or is he touching her? Explain.
-
1. On average, per bag of banana crackers is 240g but someone complained that there's less mass. 101 bags were reviewed and mass (m grams) were written as: Sum of m = 24125.8 Sum of m^2 = 5766435.5...
-
1. What are the advantages to Southwest of its proactive approach to passenger problems? n n 2. How might Fred Taylor use the four-part plan suggested in this chapter to compose his apology letters...
-
Explain the two approaches firms use to report accounting changes.
-
What effect does the purchase of buildings financed by mortgage have on (1) times interest earned, (2) debt ratio, (3) debt/equity ratio and (4) debt to tangible net worth. assume initial time...
-
What is the current through the battery in Figure P23.62 when the switch is (a) open and (b) closed? FIGURE P23.62 10 V 2002 6002 www Switch) 40 1002
-
The Epple Corporation is authorized to issue 20,000 shares of $100 par, convertible, callable preferred stock and 100,000 shares of $10 stated value common stock . Currently, the company has...
-
Martinez Company's relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Average Cost per Unit Fixed...
-
City Bank issued $200 million of one-year CDs in the United States at a rate of 6.50 percent. It invested part of this money, $100 million, in the purchase of a one-year bond issued by a U.S. firm at...
-
Many students are drawn to the career of social work because of life experiences that lead to a desire to help others. These experiences may inform personal strengths and values that translate into...
-
Dr. Pages' preferences over wealth (w) can be represented through the utility function u(w) = In(w). His taxable income this year is (3) (in hundreds of thousands). When filling his tax returns, he...
-
How has Texas Instruments Transformed the Landscape of Innovative ICs Design, and What Impact Have Their Solutions Had on Various Industries?
-
4. Suppose that the government can raise the same amount of money by imposing a tax of $5 per shirt sold in years 1 and 2 or a tax of $10 per shirt sold in year 1 and $0 per shirt sold in year 2....
-
Applying Differential Analysis to Alternative Profit Scenarios Epson produces color cartridges for inkjet printers. Suppose cartridges are sold to mail-order distributors for $5.20 each. Total fixed...
-
Zane Corporation was a mediumsized company with multiple product lines. More than 20 years ago, Zane implemented project management to be used in all their product lines, but mainly for operational...
-
Oliver Inc. deals in specialized merchandise. The beginning inventory for the month of March was $50,000; the net purchase was $45,000; the ending inventory was $35,000. Determine the COGS of Oliver...
-
The percentage of completion and completed contract methods are described in the FASB ASC. Search the codification to find the paragraphs covering these topics, cite them, and copy the results.
-
Implementing a product differentiation strategy seems to require just the right mix of control and creativity. How do you know if a firm has the right mix?
-
Visit the corporate websites for the following firms. How would you characterize the corporate strategies of these companies? Are they following a strategy of limited diversification, related...
-
On average, why is the threat of adverse selection and moral hazard in strategic alliances greater for firms pursuing an international strategy or a domestic strategy?
-
Construct a frequency and relative frequency histogram of the five-year rate of- return data discussed in Example 3. Approach To draw the frequency histogram, use the frequency distribution in Table...
-
Construct a frequency and relative frequency histogram of the five-year rate of- return data discussed in Example 3. Approach We will use StatCrunch to construct the frequency and relative frequency...
-
Construct a stem-and-leaf plot of the poverty data discussed in Example 6. Approach We will use Minitab. The steps for constructing the graphs using Minitab or StatCrunch are given in the Technology...
Study smarter with the SolutionInn App