The fall of Eastman Kodak

Not many companies have fallen as hard as Eastman Kodak.

Eastman Kodak Co. is an imaging company based in Rochester, New York. In order to understand how huge the company was to the area, you need only go to to Rochester, find someone with a bit of gray hair, and mention the word "Kodak." The reaction could be a variety of things.



The reaction could be positive: after all, it is because of Kodak and its main rival, Rochester based Xerox, made Rochester into the boom town that it was. Kodak alone employed 60,000 people in the Rochester area into the 1970's, and the famed Kodak Park spanned 4 miles across downtown Rochester. Many people I know from the area refer to Kodak Park as "a college campus," that had its own shoe store, restaurants, and other amenities that helped make Eastman Kodak the leading employer in Rochester. The population swelled to one million people by the 1980 census. Kodak invented such world-changing devices like Kodachrome, the first color film for amateurs in 1935, and the Instamatic camera, an easy-to-load camera that was immensely popular for 2 decades, in 1963.The company held a gigantic share in the market of digital imaging, and life was good for Rochester.

The reaction could be negative: Kodak plunged following its enormous success in the 1950's through 1970's. A lawsuit with Polaroid forced Kodak to pay $925 million in 1991. The company introduced disc photography in 1982, which was ultimately unsuccessful and lost the company lots of money. But the most glaring example of why Kodak has such a poor name now: a lack of foresight into the digital photography market.

Kodak had been a forward thinking company throughout its history, developing the brownie camera and patenting the aforementioned Kodachrome and Instamatic camera. These products were ahead of their time, and simply put, they created the market for their product. Rather than inhabiting an already existing market, they invented a product that changed the market and reset it for themselves.

Digital photography was developed in the 1950's, but was not made commercially available until Sony released the Sony Mavica in 1981. The issue was the Kodak did not believe that digital photography would succeed. They stubbornly stuck to their old ways, using film photography, acknowledging that digital photography was indeed easier for the consumer, but that film photography was still superior in terms of quality. And that alone would propel their film photography to more success.

Once they did produce a digital camera in 1995, Kodak accidentally got companies such as Microsoft into the digital photography market. Microsoft developed a digital image making software which flooded the market with more cameras, more markets, and more technology that Kodak was not equipped to handle.

Well, we all know what happened.

Digital photography exploded into the only form of photography currently used by most people. This wave of technology was the knockout punch for Kodak.

The former "college campus" company that employed 60,000 people in Monroe County, New York, is currently a shadow of its former self. The company employs 7,000 people, its market share is miniscule for the once proud company.

And then, stories like this appear. Kodak has resorted to selling its own patents in order to generate revenue. The company has not reported a profit for a fiscal year since 2007.

In other words, the collapse of Eastman Kodak is unique, but at the same time all too familiar: a failure to recognize changing markets doomed a once dominant corporation. Is there any way to prevent this from happening in the future?