CASE ASSIGNMENT

BUSN430: Case Assignment 1

KODAK MISSED THE BIG PICTURE

BAD STRATEGY At one point in time, Kodak held 90% of the market for U.S. film (Dan, 2012). However, the company

made a significant strategic misstep by failing to effectively capitalize on the digital camera market. In

1975, Kodak employees invented the first digital camera, but executives chose not to fully support this

technology. They feared that the company ‘s film business would suffer from investments in the digital

market (Dan, 2012).

The eventual investments that were made in digital were ineffective because Kodak placed the top

priority on the film division (Jones & Silberzahn, 2016). As the digital evolution progressed, Kodak

executives invested in printers determining that pictures would eventually be printed (Jones &

Silberzahn, 2016).

REASONS FOR FAILURE

• Kodak did not understand their core business. The company was not in the film business. Kodak

was not even in the printing business. Kodak was in the memory business, and the industry

disruption caused by digital technology moved customers away from film and printing (Anthony,

2016).

• Kodak executives defined themselves narrowly by the product they were currently providing.

Instead of embracing digital sharing, Kodak tried to make the digital camera an input into photo

printing.

• Kodak tried to fit the disruption into their existing business model and strategy instead of creating a

business model and strategy to support the disruption (Jones & Silberzahn, 2016).

LESSONS LEARNED Business opportunities must be broadly interpreted from the customer’s perspective.

Market disruption opens up opportunities, but the business must be ready and able to adapt.

With disruption, customer preferences (e.g. print to digital sharing) can change very quickly.

Strategic direction must be capable of changing in accordance with shifts in core competencies.

Disruption may negate long-term core competencies.

SOURCES

Dan, A. (2012, Jan 23). Kodak failed by asking the wrong marketing question. Forbes. Retrieved from

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

marketing-question/#62de13e73d47

Jones, M. & Silberzahn, P. (2016, May 30). Do you have a digital strategy? Kodak had one too. Forbes.

Retrieved from https://www.forbes.com/sites/silberzahnjones/2016/05/30/do-you-have-a-

digital-strategy-kodak-had-one-too/#66b97a36345d