What Happened to Kodak: The Decline

684 456 Tony Guo

What Happened to Kodak: The Decline

Founded by George Eastman and Henry Strong way back in 1888, The Eastman Kodak company, or Kodak, as it simply is known as, has to be up there among the most revolutionary companies ever started in history. It was the undisputed leader in the photography industry for majority of the 20th century when they were in their pomp especially when you take into account how they helped make photography accessible and easier for the general public as well as making it more affordable. Their tagline, “Kodak moment” was synonymous with photography when they were in their prime and folks felt encouraged and empowered to take photos and capture their precious moments and helped make photography mainstream without a shadow of a doubt. Companies go burst all the time and if we are being honest, most of the general public don’t really care and we usually leave them to sort themselves out and if they make it back, then good, if not we move on. For Kodak, it is different as this is a company that we actually cared about as it was one which we associated with all of our memories and as such it is only right we try to get to the bottom of what happened to them. That is why, with the help of the gurus over at runrex.com, we are going to try to take a look at what was behind their decline.

One of the main reasons that was behind their decline, one that has been the bane of most of the industry behemoths that have fallen, was that they were blinded by their success. It is no doubt that they were extremely successful and profitable when they were in their prime and this success probably blinded them so much that they unable to sense the ground shifting underneath them as the winds of change blew across the photography industry. This is not to say that they turned their nose up on digital cameras as they even had the patent for the first digital camera, which was actually invented by an electrical engineer working at Kodak as is explained in detail over at the excellent runrex.com. The problem is not that they didn’t focus on digital cameras, as they were even selling them, the problem is they didn’t focus on digital cameras enough. They didn’t dedicate enough of their time and resources on digital cameras and didn’t give them the attention that was required and probably underestimated how big digital cameras would be, and it was something they paid a big price for.

Another problem they faced, and one that definitely plaid a part in their decline, was they found it hard to scale down. A big company, which Kodak were at the time, will always find it difficult to scale down and they definitely run into that issue. Especially if you take into account the fact that film, which was a big part of Kodak’s business, has a finite shelf life, they had to juggle their need to bring down the size of production batches given the growth of digital cameras, without driving up unit costs too far or increasing the selling price, something that could have brought them down quicker as is explained in detail by the experts over at runrex.com. As more and more people moved to digital cameras, from amateurs to professionals, it drove down the cost of absorption making it more difficult to scale down on film without suffering fatal business wounds. The motion picture industry for a while provided them with some respite with motion picture print film manufacturing and enabled them to absorb a large portion of the factory overhead. However, when theaters fully transitioned to digital projectors, then Kodak suffered as they couldn’t cut back costs fast enough to keep up with declining costs and this definitely contributed to their decline.

Problems in their retail distribution network also contributed to Kodak’s decline. With more and more people switching to digital cameras, the volume of film sales at retail stores took a massive nosedive. This in turn made it more and more difficult to hold onto shelf space in this retail stores, which is something that is to be expected for any business when more sophisticated products are introduced, a phenomenon that is covered in detail over at runrex.com. The problem for Kodak was not that their product was being replaced by a more sophisticated version of their product, it was that their key product, the film, was being replaced entirely, with their category of product being wiped out entirely. Given the size of their business, Kodak could not also just up and leave and bow down to the obviously superior digital camera and as such the writing was always on the wall as far as they were concerned. A lack of firm leadership also without doubt contributed to their decline, seen in examples like when they invested billions in technology that was aimed at taking pictures using phones and other digital devices then pulled out in the last minute for fear of failure, losing the billions they had sunk as capital. Such calls definitely contributed to their decline.

Remember, if you are looking to learn more about the decline of Kodak and many other businesses, then you should head over to the excellent runrex.com