Contents

• Dry plate-film to color • Rajan Nhemaphuki

Film • Kusal Kafle
• Color film-dawn of
Digital technology.
• Pushkar Khanal
• Competitive Strategy &
threats.
• Rajesh Dhakal
• Fall of Kodak.
Back in the 19th
Century the
Eastman Dry
Plate Company
produced the 1st
camera that
weren’t invented
for the
professionals.
 How Eastman did it?

George
Eastman developed
& patent a machine
to coat plates in
1879

Technology
as
innovation
trigger
Dry plate/ gelatin
In 1878, Bennett
process by invented
improve the gelatin
by Dr. Richard L.
process
Maddox in 1871
Innovation to Entrepreneurship

In 1880 Eastman began commercial

manufacture of dry plate.

Businessman Henry A. Strong was

impressed with its success.

On January 1, 1881, Eastman and

Strong partnership to form Eastman
Dry Plate Company.
 Disruption From Dry Plate to Roll Films

• In 1884, Eastman
patented the first film
in roll form.
• In 1885 it started
manufacturing paper
film named “Kodak”.
• The cameras were so
successful that the
“Kodak” word was
incorporated into the
company name.
• The Eastman Kodak
Company was founded in
1892.
• By targeting non
photographers, Kodak
created a huge market.
 Snap-Shot Feature
• In 1900, Eastman
introduced Brownie, a
simple and very
inexpensive box camera
with snapshot.
• Brownie camera allowed
consumers to take their
own pictures.
• They could then mail the
roll of film to Kodak to
develop.
Kodak brought photography to the people, just like
Ford brought cars to the people.
Marketing
“Simplicity is greatest Complication”
Kodak became a household name.
 Growth
• People loved to take
photos, and as they
became richer, they
took more photos…
• And thus, Kodak
made more money
and kept growing,
and growing.
Kodak Vest Pocket Camera (1912-1926)
Cine Kodak for Home Film Making
(1923-1935)
What Next??
Color film was the next big thing.
Disruption from non-color to color film
In 1957, the Kodak Brownie Starmatic was launched. Over the
coming five years more than 10 million of them were sold!
 But even greater
revenues were made by selling film.
Continues…..
Just like Gillette made great money by selling razor
blades, Kodak made great money by selling film .

The main source of profit was not the razor or the camera, it was the
continuous consumption of blades and film.
Film could be bought and finished everywhere.
1960
In mid-1960, NASA photograph 99% of moon
surface by using photographic system develop by
Kodak

Kodak technology was also on board Apollo 11,

when first men walked on moon.
1971
With signs, Kodak also sought to encourage
people to take a lot of photos…
 1st Digital Camera
• Steven Sasson invented
the first digital camera
at Eastman Kodak in 1975.
• It weighed 8 pounds
(3.6 kg) and had only
0.01 megapixels. The
image was recorded onto
a cassette tape and this
process took 23 seconds.
• His camera took images
in black-and-white.
• He envisioned for the
future was a camera
without mechanical
moving parts.
 HOW DID KODAK RESPONSE?

But it was filmless photography, so management’s reaction was,

‘that’s cute—but don’t tell anyone about it.’
via The New York Times (5/2/2008)
1976:The Bayer Pattern color filter array (CFA) was invented
by Eastman Kodak researcher Bryce Bayer.
Kodak management’s inability to see digital photography as a
disruptive technology, even as its researchers extended the
boundaries of the technology.

Kodak continued producing film roll cameras.

 1976: Kodak introduced the first
Kodamatic, instant picture cameras,
using a similar film and technology
to that of the Polaroid company.
• 1976: The company sold
90% of the photographic
film in the US along with
85% of the cameras.

•
New Kodak Moment: A
$19M profit
Kodak kept neglecting Digital technology
HERE COMES COMPETITORS
… However, in the late 1970s, the rise of the Japanese
camera industry threatened Kodak…
When Fuji sponsored the 1984 Olympics in Los
Angeles it became clear that the threat was real.
Sony electronic camera “Mavica” 1981
In Japan it was referred to as
“the Mavica shock”
Continues…..
Kodak quickly identified the threat
CEO, Barabba conducted a very extensive
research.
Good News Badness
• It would take about 10 • Digital Photography
years Digital had potential to replace
Photography to take Kodak’s film based
over film based business.
business.
• And Kodak has roughly
ten years to prepare for
transition.
 Kodak Strategy

• Continue production of the film based camera technology.

• Expansion in many countries.

• Diversification in medical imaging, pharmacy, batteries

• And also R&D in Digital Photography

 Kodak’s Challenges
• Kodak used to be exceptionally integrated
vertically, owning the entire value chain, from
basic research to photo finishing.
• However, in the digital world, everything would
be different.
• The digital value chain could not be dominated in
the same way – Compaq, HP and others were
leaders in the PC market, Adobe dominated
image software, in printers Canon and HP were
leaders.
IF YOU CANT BEAT THEM THEN JOINT
THEM
 Solutions
• Kodak therefore launched many joint ventures
with these firms, since the company did not
possess these resources on their own.
• With the launch of the digital DC40 in 1995,
Kodak teamed up with Microsoft, HP, IBM
and tried to create an infrastructure for digital
imaging.
• Kodak, Olympus and Sanyo all cross licensed
thousands of patents in digital imaging.
1986: Kodak scientists created the world's first megapixel sensor

later on Kodak developed the sensor into a digital back, which

was built in to a Nikon camera in 1991.
Kodak collaboration with apple (1994).

Quicktake 100 Quicktake 150

 Digital Back
• 6 MP
• Heavy
• Moderate
Performance
PRESS AND STUDIO
PHOTOGRAPHERS LOVED IT, NASA
IMPRESSED BY KODAK SENSORS
 Kodak Digital Avantrix Preview (1996)
• Kodak spent $500M to
develop and launch.
• Features
• Shot preview
• No. of print
• But it still use Films
Advantrix preview was huge failure
Why buy a digital camera and still pay for film
and prints?
“regarded digital photography as the enemy, an evil juggernaut that
would kill the chemical-based film and paper business that fueled
Kodak’s sales and profits for decades.”
via The New York Times (12/25/1999)

CEO GEORGE FISHER

Fall of Kodak
• In 1997-98, CEO Fisher
had to fire 20 000
people, mainly because
Fuji lowered their prices
and expanded.
• Kodak also responded
by entering emerging
markets such as China.
Once the shift occurred, it was faster
than anyone could have imagined…
2004: Kodak announced that it would stop selling
traditional film cameras in Europe and North
America, and cut up to 15,000 jobs
January 2005: The Kodak EasyShare-One Digital Camera,
the world’s first Wi-Fi consumer digital camera capable of
sending pictures by email, was unveiled
Continues…..
 Standard & Poor’s Equity Research
Analyst Erik Kolb commented on the
results:
“They were late to the game in their shift to
digital and they have been playing catch-up
since.”
 Christian Sandström holds a PhD from Chalmers University
of Technology, Sweden. He writes and speaks about disruptive
innovation and technological change.
Kodak did embraced Digital Technology

Then, Why If Kodak wasn’t late, why did the

company encounter such great trouble…?
 One of reason is Recession

“During the last three months of the year, we experienced dramatic declines in several of
our key businesses due to the slowdown in consumer spending and significantly reduced
demand for capital equipment” // CEO Antonio Perez
 Next: People stopped buying Films.
• Many of Kodak’s key resources and capabilities
became virtually useless with this change
• The global distribution network lost its value.
• People used PCs instead of photo finishing labs.
• The supplier network for producing film was also
rendered obsolete.
• Knowledge in chemistry and film manufacturing
became an obsolete asset.
• The value of film and paper manufacturing sites
was literally demolished.
 Battery

Tape Film

Camera

Chemicals Studios
 Thus, the shift to digital imaging implied that
Kodak’s capital in terms of skills, processes, market
position etc was destroyed…
• To make thing worse,
mobile camera started
to disrupt the compact
camera.

• Sales of compact
cameras actually
decline in 2005 and
continue to do so ever
since
 Kodak Dilemma
So much investment has been made in
Chemical, Paper, Film industries,
it is almost difficult to suddenly shift into
risky digital era
It choose slow pace to Digital
Photography
The result is inevitable
In 2012 Kodak filed Bankruptcy
&
Also declared it will quit
photography business.
Kodak sold its patent to companies like Adobe, Amazon, Apple,
Facebook, Fujifilm, Google, HTC, Huawei, Microsoft, RIM, Samsung
and Shutterfly.

The portfolio was said to be worth around $2.5 billion, but Kodak
settled for the $525 million. Partially, that’s because Kodak isn’t in the
position to negotiate. But it’s also because Kodak extensively licensed
these patents to other companies.
 Lessons we can learn:

• External environment can be deceiving

• Change happens
• Greatest strength can be weakness
• Innovation is not the perfect solution
 Reference
• https://en.wikipedia.org/wiki/Dry_plate
• https://en.wikipedia.org/wiki/George_Eastman
• https://en.wikipedia.org/wiki/History_of_the_camera
• http://www.kodak.com/ek/US/en/Our_Company/Histor
y_of_Kodak/Building_the_Foundation.htm
• https://hkjeldal.wordpress.com/2015/02/18/gd1-week-
7-history-of-photography-an-introduction/
• https://en.wikipedia.org/wiki/Cine-Kodak
• https://en.wikipedia.org/wiki/Steven_Sasson
• http://www.forbes.com/sites/chunkamui/2012/01/18/h
ow-kodak-failed/
 Reference
• http://www.economist.com/node/21542796
• http://blogs.wsj.com/source/2012/02/26/the-
demise-of-kodak-five-reasons/
• https://en.wikipedia.org/wiki/Apple_QuickTak
e
• Special thanks to Christian Sandström &
Chunka Mui