Kodak's Digital Journey

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Case Details:

Case Code : BSTR190
Case Length : 16 Pages
Pages Period : 1995-2005
Organization : Kodak
Pub Date : 2005
Teaching Note :Not Available
Themes: Adaptation to Market Changes | Transformation
Countries : US
Industry : Consumer Electronics

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Growth of Digital Cameras

Digital camera technology had its roots in the technology used in the video tape recorder which captured live images from television cameras by converting them into electrical or digital impulses and storing them on a magnetic tape. In 1972, Texas Instruments first patented a film-less electronic camera.

In 1975, Steven Sasson (Sasson), an employee at Kodak, designed a prototype of a digital camera that captured black and white images on a digital cassette tape. Using the camera, which weighed around eight pounds, he shot a picture which took 23 seconds to record on the cassette and about the same time to deliver the output to a television screen. However, the final picture was of poor quality and Sasson received negative feedback from his superiors, who were not happy with the complex set up. The product was not developed for commercialization. In the 1980s, Kodak concentrated on digital technology and started developing Organic Light Emitting Diode (OLED) displays. In the mid-1980s, it invented a number of solid-state image sensors which converted light to digital pictures...

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Kodak's Digital Initiatives

Between 1997 and 1999, Kodak posted losses of US$ 800 million. In January 2000, Kodak announced that Fisher would be replaced by Daniel A. Carp (Carp) as CEO. Analysts thought that even though Fisher was not successful in turning around Kodak, he had made the company focus more on its core business (photography) and digital products.

Carp, who had joined Kodak in 1970 as a statistical analyst, became president and chief operating officer of Kodak in 1997. In the year 2000, Kodak's digital business lost US$ 76 million. In early 2000, Kodak turned its attention to manufacturing low-priced and easy-to-use digital cameras. As the number of online photo-sharing websites started increasing, Kodak began to think in terms of entering into alliances with them. It took a minority equity stake in an online photo-processing company Snapfish and supplied photo paper to that company. Kodak also launched a new online photo-finishing service called Print@Kodak. This service provided print facilities to customers and photo-sharing websites such as PhotoPoint.com and Nuwave Technologies...

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