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Two things: One, I gotta catch up on the blog as I didn’t post yesterday. Two, I was thinking earlier today, “How the hell am I gonna have the time to keep up with work, school assignments (last semester!), life, AND this blog?!” And so I thought a good solution would be to write about case readings from school on days that I have reading to do. That way I can save some time and absorb the content for school more effectively while I’m at it. BOOM.
My first case reading is for my Strategies for a Networked Economy course. It’s basically designed to explore an increasingly digitized and connected world and how it applies to business. Very relevant to my line of work and life in general.
This particular case is about the dominance that Kodak had in the film industry through the early 1980s, its experimentation in other, loosely related industries, and its gradual decline with the coming of the digital age. As most business cases go, it’s pretty dense with detail so I’ll spare myself the business school-level write up as I know I’ll be diving deeper into it later.
The one point that’s most interesting is regarding Kodak’s culture. At the end of the day, the culture was the ultimate reason for it’s decline. Domination in the film industry prevented Kodak’s employees from adopting change with the coming of the digital age. That isn’t to say that leadership didn’t experiment other avenues, but some of it was completely left-field. They felt that entry into the pharmaceutical industry would be profitable as Kodak was thought to be a “chemical” business at its core. Absurd in hind-sight.
For a long time, the strategy was to maintain the status quo and avoid risk. “Don’t fix it if it ain’t broke” was its mantra. There were innovations that were made like digital cameras and disposables, but they felt that this went against their “razor blade” model, i.e. the profit is in consumers’ repurchasing of film rolls (razor blades) vs. the camera itself (the razor).
There was a lot of leadership changes throughout the years with some more successful than others. Kodak entered the digital camera space and after little success, leadership decided to draw back from hardware and focus on the output and service side in the late ’90s. Eventually, Kodak started to decline in the film industry as well, losing to Fuji by the 2000s.
As with all industries, the environment and trends change over time. My first blog post was on Amazon and I spoke to the level of innovation and forward-thinking culture that the company exhibits on a consistent basis. This is what’s allowed it to grow into the beast that it is today, let alone survive an ever-changing tech market (let’s not forget it started in the hardcover book industry!). Some companies can adapt, but Kodak just wasn’t one of them. A lot can be said about leadership, vision, and culture and how they are EVERYTHING when it comes to continued success in a changing market.