So what mistakes did they make? It's obvious they are some sort of textbook case of failing to adjust to change in technology. There was a time when Kodak was synonymous with photography. Sad.
I don't think that's obvious at all. Kodak I think is more of a story of distracted noncommittal execution combined with the standard woes of dramatically changing the primary competency of a large company to something entirely different.
Contrary to popular belief, Kodak didn't stick its head in the sand while digital ate the world - they were there right at the beginning.
Kodak literally invented the digital camera in 1975, though obviously it was wildly impractical at the time. More importantly, they were first to market with a DSLR all the way back in 1993: http://en.wikipedia.org/wiki/Kodak_DCS_100
Yeah, get a load of that backpack you needed to carry ;)
They continued releasing DSLRs until 2004, when they were obviously hopelessly outgunned by Canon and Nikon.
Beyond cameras, they were, for a long time, the only people working on digital sensors at all (besides Canon), and they supplied many of Canon's competitors. The sensors themselves were no slouches technically either - they were highly competitive for their time. Perhaps most famously, Kodak supplied the sensors in the Leica M8 and M9, both of which were known at the time for their incredible image quality, and optical achievement (i.e. microlensing to reduce the flange-focal distance). In fact, for a short time Kodak supplied Canon themselves.
OEMs abandoned Kodak in droves only in the last few years, when their financial troubles made the prospect of building an entire product around their sensors questionable. This, obviously, did no favors for Kodak. The rise of other medium format sensor companies also ate their top end market for lunch - Phase One and Leaf (now Mamiya-Leaf) being most notable.
So all of this sounds pretty rosy, so why did Kodak die? It's really hard to say. I suspect a large part of the problem was that becoming the world's digital imaging sensor vendor would not have financially supported a company the size of Kodak, even if they had committed to that path, and the company was loathe to downsize and reorganize the workforce to something that they would barely recognize.
So they branched into many other lines of business that were, even at the time, poor bets. They targeted low-margin markets (HP style!) and went hardcore into digital photo frames and various cheapo consumer knick-knacks that you might find at Sharper Image. IMO this was a large distraction that never should have been pursued in the first place. They even tried to copy HP by going in on the printer-ink business. That failed too.
Their stance in the digital imaging aspect of their business was always a bit noncommittal. IMO Kodak would have survived if they trimmed their business down and became the image sensor R&D company of the world. Their work force was too large and committed to the wrong lines of business all the way to the end.
Interesting note: Kodak's film business is actually profitable.
I think most folks here have missed it so far: They had shitty management. For god's sake, they hired Pat Russo as President and COO. Hilariously, Lucent hired her back as CEO; her performance was so miserable that Lucent had to sell itself (Alcatel bought it).
Let me repeat that: Kodak installed a top-level person who later killed a company that invented the transistor, solid-state laser, Unix, and information theory.
In another anecdote: Through a circuitous route, I got involved with a presentation to George Fisher (Kodak CEO) around 1996. They were looking for how to allot their $400M research budget between old-fashioned silver-halide films and digital photography.
Suffice to say: They absolutely saw the writing on the wall and were pouring money into the digital imaging revolution. They had very serious engineering talent, which brings me to my original point: Their management sucked.
Edit: Search for Kodak on the list of all-time worst CEOs here: http://www.businessinsider.com/the-worst-ceos-in-american-hi...
(Side note: Guess who is Lead Director of the Board at GM? Just how badly do you need to fuck up in the corner office before people go find someone good?)
There's no sense keeping a big photo printer in your home, stock it with (expensive) paper and (even more expensive) ink considering most people don't print that many pictures.
When they need to, the local Walgreens will have a kiosk that will put the pricing of maintaining a home printer to shame. The quality will be better too.
It's a fundamental shift in the way we use photography - people used to go and get entire rolls of film printed as a matter of course, but nowadays consumption is almost entirely digital.
> "Is film profitable enough for them to stick with it?"
Every impression I've gotten from Kodak is that they're looking to sell the division. As a film user my fear is whoever buys it will shut it down and keep the IP. Or worse, buy the brand names and stick them on unrelated merchandise.
When you've got a big, profitable film business, lots of film business employees and factories and machines, people right up to the boardroom who have dedicated their lives to building up the film business, and lots of customers like photo development firms who are saying they think film is just great - it's difficult to decide to consign all that to the scrap heap.
And by the time you don't have a profitable film business any more, you've lost the headstart you once had.
[1] https://www.google.co.uk/search?q=innovators+dilemma+kodak
In the startup world I think we'd say that Kodak failed to pivot. I've seen a great many mature company lose their way when it comes to pivoting into a new and obvious line of business that will probably one day kill off their old business. But some manage to do it pretty well. I'd probably give the obvious example of Apple effectively killing a lot of their iPod business with the iPhone, but they weren't scared and proceeded to grow their business into entire new territories that way (while also getting their old customers to give them more money to upgrade to an iPhone).
But another example might be IBM. IBM sold typewriters and other mechanical office machines, and even though the advent of computers would eventually kill off that entire industry, they managed to turn into a computer company and then into a services company and are doing quite well.
There's others, but I think the main lesson to be learned from this is that you shouldn't be afraid to cannibalize yourself if you do it right. Kodak should own the digital imaging business by now. Everything from their own consumer cameras to the optics and sensors used in every mobile phone sold should have been theres. But they proceeded out of fear and this is where they've ended up.
Of course, I'm sure an ipod factory/engineering team/customer base could switch to the iphone more easily than a chemical film factory/engineering team/customer base could switch to digital sensors - so I'd be hard pressed to claim I could have done a better job of managing Kodak!
Fictional or not, that's a great quote; bookmarked.
Love or hate Apple, they aren't afraid to cannibalize themselves in order to progress. The iPod-killer everyone was waiting for came in the form of the iPhone, and iPads have overtaken Mac sales.
Not sure who said it exactly, maybe Marco, Gruber, John Siracusa or someone else, but one of them made a comment that disruption rarely comes from big players (entrenched players), but from the small-time players/ newcomers. Even though Apple was a big company, they were new to the cell phone market. Like it or not, the iPhone disrupted the entire smartphone/ cellphone industry. We're all better off because of it.
If Kodak could have been Adobe, Flikr, and Instagram all rolled into one, they still wouldn't have same revenue they had in the 90s. I wrote about this before here: http://baus.net/will-there-be-a-third