As traditional creations move to the digital age, no company exemplifies best how hard it can be to adapt than Eastman Kodak. Started in 1880, Kodak was at the forefront of technology back when photography and film making was still a dream. This company invented roll film, the basis for traditional motion pictures, along with the first fixed-focus consumer camera in 1888. In many ways, it brought photography and film making into the hands of millions.
Throughout the 1900s, Kodak grew from the brainchild of George Eastman to an international corporation. Ironically enough, the first digital camera was invented by an engineer at Eastman Kodak in 1975. But with this invention, the company also started on its downward spiral. Kodak tried many times to embrace digital technologies, but eventually failed. The company hasn't been profitable since 2007, getting huge losses, and now reports
indicate that Kodak may be on the brink of bankruptcy.
In 1997, Kodak was worth $31 billion. This week, it's worth $210 million. Most of its current plans rely on its patent portfolio, and not on sales of digital cameras. So what went wrong? There's multiple factors. The fact that Kodak tried to stick to film for too long, while the world was moving to digital medias. A series of acquisitions and partnerships throughout the last decade. And the failure from its board to evolve the company fast enough.
Ironically, in 2000 Kodak claimed that it would become the premiere vendor of digital cameras, and by 2005 it was one of the top players, with its digital sales at $5.1 billion, while its film business was in free fall. The problem, according to the company's CEO Antonio M. Perez, is that the digital business doesn't have the vast profits of their old, traditional film business. Long studies
were written about the failure of the company to adapt.
The short story is a failure of management, and a lack of innovation in a changing world. The production of cameras became a commodity industry, with lots of companies making cheap consumer devices, and Kodak couldn't differentiate itself, or move into new businesses fast enough, trailing behind the competition with a large baggage from its early days. At this point, Kodak is no longer seen as a competitive brand, and most of its remaining potential lays in patents, and not consumer products. It's a story that has been repeated in many businesses, but in the case of Kodak, it really is a giant that fell down, and is now on life support.