Technological Failures of Kodak

Background Information
Kodak was a famous Company in the US until the 2000s, and its tag was synonymous with photography. Founded in 1988, Kodak was a household name as far as taking pictures was concerned. It enjoyed a competitive advantage in the market given that it had been in the industry for the longest time. However, this giant started fading away with the advancement of technology around the world. In 2001, sales of film products dwindled significantly owing to the emergence of digital technology.
The use of film was no longer viable. As such, Kodak resorted to producing digital cameras which eventually did well in the market. With increased competition in the industry, and the advent of an iPhone with a powerful camera; Kodak could not take it anymore. The Company sought bankruptcy protection in 2012 and totally sold all legacies. It only came back in 2013 as a relatively smaller Company which today enjoys a smaller market capitalization of less than $1 billion.
Technological Failures of Kodak
Many business analysts opine that Kodak was the author of its misfortunes especially by showing utmost ineptitude in the technological sphere. Here are some technological failures that the Company exhibited before its downfall. To start with, the Company was carried away by its breakthrough to the extent that it did not anticipate new trends in digital technology. Kodak enjoyed unfettered success in film and photography for such a long time to an extent whereby they could not think beyond their status.

Even when the first prototype of a digital camera was created in 1975 by Steve Sasson who was working for Kodak at that time; the management could not envision further developments in this line by any other competitors.
In addition to this, it is common knowledge that Kodak’s invention of film technology was novel and unmatched for quite a long time. However, with this success at hand, the Company did not capitalize on the head start they had. Instead, they sought to make the digital camera invention as complex as the then pre-existing traditional film. This was clearly a farce because the Company overhyped the market without realizing that at that point digital cameras would not do well that easily.
Kodak also had its moments of the trial, but there was no triumph at all. In 2001, the Company purchased a photo sharing site called Ofoto. Much as the move was bold and novel, it was then put to waste by the modalities that followed (Clemen & Kwit, 2001). Instead of Kodak allowing people to share their moments on Ofoto, it was inclined towards encouraging people to make digital print outs of their photos. While Kodak was incessantly stumbling; its distant rival Fuji was bold and ingenious enough to adopt videotape and magnetic optics technology to widen its scope of application. This is the sad contrast between a Company which had all the competitive advantage but did nothing to preserve it with another one which was badly off but resolved to move with the tides of technological development.
The story of Kodak is quite ironical because the incumbents normally have the best chance of advancing even further ahead of their competitors because they have all the resources; a huge market base, a good profile and the money to implement projects. How the Company did not utilize all these is still not certain.
Measures Kodak could have taken to avert its Failure
The recovery of Kodak was highly improbable; nonetheless, the company’s management never explored better technological and managerial strategies. Kodak has had patent conflicts that have strongly focused on technology and the massive portfolio of the company which had nearly 10,000 patents. Kodak patents are not only precarious to developments in future and revolutionary techniques used in print, images, smartphones, computers, art, movies, digital devices, and web development; the patents are enormously strategic for a big technological company to have when they want to compete against other companies. Had it been that Kodak owned multi-way mechanisms of communication such as social networking in the 70s, it would have been very possible to stay relevant in the market, in just the way top companies in the United States are doing (Clemen & Kwit, 2001). By 2003, the company was among the top most players in the arena of digital camera and was constantly making losses. At that time, Kodak’s market share in their new technology had not reached a 25% mark. Worse still, in successive years, Kodak made an unceasing loss in profits as well as their market share. Kodak could not have let all this to happen; as a cooperation that had a huge research base and colossal profits and development activities, this company had the ability to make tactical investments in Silicon Valley in the 70s.
Companies such as Xerox, Google, Microsoft, Sony, Apple, Amazon, Canon, and others could have effectively used patents that Kodak owns. However, Kodak was not giving itself a necessary takeover target with enormously influential patents (Fox, 2004). Furthermore, these patents could be amounting to billions of dollars and could be influential in helping a company regulate utilization of its technology. Better technological utilization could also be helpful to a company in holding exclusive rights; these rights are beneficial to a company since it can sell unconcealed products. Following the patent issues, it is evident that Kodak a company on the verge of failing since they lacked proper technological tools to efficiently utilize their patents (Shih, 2016). Moreover, this company had no network and resources to implement their patents in growing technologies.
Additionally, the management of Kodak was not keen to see and embrace new technological trends. For decades, Kodak top management was not willing to embrace trends that were new in the market at the right time; this was something that was succeeded by subsequent top managements which decided to bank on the same old fashioned trends. For instance, at one time, the management was not able to embrace the profitable dry-plate ideology of moving to film technology and later, when they chose to invest in color film at the time the market response to black and white films was superb. The primary cause of this problem was that the company was extremely adamant in the sense that they failed to embrace new technological trends, worse still, the company had to invest millions of dollars on research to convert old trends which had responded well to the market to digital trends by use of Advantix Preview (Fox, 2004). If Kodak had a communication system that was multi-way in the 70s and 80s like today’s social networking, the company would be shining with glory right now.
Shih (2016) observed that social networking could be essential in the performance of Kodak. This technology could have led to more awareness in embracing their newly invented digital trend or probably generate some ‘noise’ online that would have gained some substantial attention, and within no time, this would have made Kodak management more self-aware (Fox, 2004). The mass population could be reached by social networking sites, and Kodak would have had a simple role of adopting these social sites in within the company where the culture was instrumental. In most instances, for companies bragging of resources and competency to be successful, the top management has to ensure their workers support strategies the company designs to move the company forward (Ellram & Edis, 1996). Presently, top firms in the United States that evaluate or implement several customer impact systems like CEM and social CRM back their evaluation with Big data analytics, leveraging cloud’s elasticity, and In-memory computing. These are some of the techniques Kodak was slow to implement at the time the company had enough capacity.
As technology is advanced, so did the value that was offered by Kodak. It was well known that Kodak was seriously conquering global market, and in the long run, they were unable to hold onto it. The company concentrated all its attention on the product, film as opposed to focusing their attention on the value got by their client from the product they had invented. The company should have tried to understand other external factors that could bring about the erosion of their primary advantage (Ellram & Edis, 1996). For quite some time, Kodak’s fundamental advantage for the client photo market worldwide was their great technology. However, as films were replaced by digital cameras, the company was extremely focused on the old technology to the point that they were not in a position to recognize digital value until the time they had no otherwise.
References
Fox, E. M. (2004). Eastman Kodak Company v. Image Technical Services, Inc.-Information Failure as Soul or Hook. Antitrust LJ, 62, 759.
Ellram, L. M., & Edis, O. R. (1996). A case study of successful partnering implementation.
Journal of Supply Chain Management, 32(4), 20.
Clemen, R. T., & Kwit, R. C. (2001). The value of decision analysis at Eastman Kodak
Company, 1990-1999. Interfaces, 31(5), 74-92.
Shih, W. (2016). The Real Lessons From Kodak’s Decline. MIT Sloan Management Review,
57(4), 11.