Eastman Kodak’s Quest for a Digital Future

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microelectronics and software engineering capabilities on the market such as Canon, Hewlett-Packard, Sony and Adobe Systems, which prevented the company from achieving a significant market share. Thus, if a customer really had to buy a digital camera, his first choice would not fall on Kodak.

What can be deduced from Kodak’s ten-year strategy is that it wanted to do a little bit of everything without committing to any specific product or segment. Consequently, putting so much effort in trying to innovate as much as possible in digital imaging when other companies already possessed a better technology was not the key. Process innovation was much more relevant than product innovation. The alternative should have been to focus on core competences. Kodak main’s competences lied, in fact, in chemical processes associated with the manufacturing of films. As the case suggests, one of Kodak’s main competitors was Fujifilm that faced the same difficulties, yet it succeeded thanks to an efficient strategy. The most noticeable point about Fujifilm’s strategy was that it invested in a business called “Information solutions” that included pharmaceuticals and cosmetics, among other things. Given Kodak’s valuable resources and capabilities in the chemical field, it should have followed the same strategy by exploiting chemicals not only to create films, that obviously were no more used as much as they were when traditional cameras were the only choice, but also to create a range of different products by giving a higher consideration to the cosmetic and healthcare industry. As far as digital photography is concerned, instead, Kodak should have slowly exited the consumer market and targeted professionals only, reinforcing his position as a provider of high quality offerings in the mind of clients.

Having considered Kodak’s great difficulties in adapting to a disruptive technology that changed people’s vision of photography, other big companies such as Microsoft, Sony, Nintendo should learn that one of the best ways to face these changes is to understand what are the company’s most relevant competences and how to do the best to enhance them. Those companies need to ask themselves what other businesses other than the existing ones they can enter and what old businesses to abandon due to lack of profitability. Trying to forcibly implement a disruptive technology in all present segments that have proven successful with the traditional technology and struggling to reach all kinds of customers will result in creating a too widely diversified (and sometimes low-quality) portfolio that can lead companies to get stuck in the middle and lose competitive advantage. Organizational structure and initiatives are also important. Companies like Kodak often fail to recognize when a technology is actually disruptive and wait for it to disappear, sticking to the traditional technology for a while until they recognize that they need an urgent change in order to adapt to it. In that case, despite all efforts put in creating innovative products that would appeal to existing customers, some competitors may already have acted and established an advantageous