Many companies and industries have been threatened by a novel technology or business model, and there will be many more instances in the future. Eastman Kodak (Kodak) faced this problem.
In 1975, Kodak had 90% of camera film sales and 85% of camera sales in the U.S. It also dominated the markets for photo paper, film processing equipment, and film processing services. It had deep expertise, strong brand loyalty, and strong relationships with photo shops. In that year, a Kodak engineer built a digital camera prototype. It was just a clunky lab construct, but he proposed developing a model for the market. Kodak executives rejected the proposal.
One year later, Konica offered the first compact digital camera to the market. Rapidly-improving digital cameras from several companies came to dominate the market within 35 years, and Kodak’s businesses of film, film cameras, photo paper, and film processing were displaced. Kodak eventually marketed its own digital camera, but it went bankrupt in 2012.
The questions are: What strategy should Kodak have adopted regarding this new camera technology? Should it have done what it did? Should it have helped to destroy its profitable core business by aggressively developing digital photography? Were there other strategies it could have adopted? One of the lessons of this course is that we should think broadly about alternative strategies. Options are not simple yes/no choices. There are a variety of ways that Kodak could have participated in the photo market once digital photography was invented.
In this forum, each student should describe one strategic option for Kodak and should explain why the option would have made business sense for Kodak. If another student already posted your initial idea, I encourage you to think of another option so we get a wide range of options (but with as many students as we have in the course, it might be difficult to avoid some repetition).
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