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Disruptive Innovation and AgfaPhoto

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AgfaPhoto rests in peace now.

AgfaPhoto rests in peace now.

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Disruptive Innovation and AgfaPhoto Disruptive Innovation and AgfaPhoto Presentation Transcript

  • CameraDemolition
  • Christian Sandström holds a PhD from ChalmersUniversity of Technology, Sweden. He writes and speaks about disruptive innovation and technological change.
  • In May 2005, the German- Belgian camera and film manufacturer AgfaPhoto went bankrupt.
  • Later, the AGFA building in Munich was demolished.
  • An old business which had beenprofitable for many decades was now literally blown into pieces within a few years.
  • A lot of people came to watch this spectacular event.
  • The company said: "AgfaPhoto has been suffering from intensecompetition in the market lot traditional photographic equipment and products, and the shift among consumers towards digital products."
  • In a statement, workersrepresentatives described it as "a development that isboth surprising and painful."
  • 125 kilos of explosiveslater the building hit the ground.
  • AGFA used to makeconsumer cameras…
  • … And film.
  • The shift to digital imaging put this former industrial giant out of business.
  • AGFA had been in the camera andfilm industry for about a century.
  • Compact, user- friendlyamateurcamerashad been sold fordecades.
  • Within a few years, people stopped buying film.
  • And in the camera business,AGFA simply couldn’t keep up with the Japanese dragons.
  • No film sold, no cameras sold.
  • Once a great competitor toKodak, keeping them from complete hegemony…
  • … is now out of business.
  • In 2001 the company announced that about 4000employees will be laid off over the coming three years.
  • In 2004, thephotography section of AGFA was divested through amanagement buyout.
  • Prior to the buyout, AGFA had tried to sell thecompany through press statements…
  • Sounds pretty desperate…
  • But once the buyout hadtaken place, the new CEO spoke confidently…
  • On a press conference, BingLiem, CEO of AGFAPHOTO North America, said:
  • "We feel very strongly we’re positioned for success…”
  • One year later,AGFAPHOTO went bankrupt.
  • Words don’tchange facts.
  • Since the company had acompetence base in precise mechanics and chemistry, attempts in digital imaging were outsourced.
  • The German consumerelectronics firm PLAWAmanufactured cameras for AGFA.
  • Comparing these products to what the large Japanese firmscould make, they were clearly inferior.
  • A couple of reviews from consumers:
  • “Never buy this camera.Slowest digital camera ive ever seen. Slowest shutter lag and very slow at even viewing your images.”
  • The camera doesnt make sharp pictures and the colours arent good. I have another digital camera, a Olympus C-830L, this camera makes much better quality pictures!My opinion: this cameraisnt worth the money!!!!
  • “i don´t like everything”
  • “Nice toy, and only as a toy.”
  • “This is a so-so camera, but really ices the cake is that when the thing broke (the LED screen began to leak) techsupport was AWFUL. They sent me two refurbished cameras, neither of whichworked AT ALL. They refused to test thecameras before sending, or to get me a new one. Unrelenting complaining FINALLY got me a refund.”
  • “Plawas first stab at an Agfa- cam isnt looking too incredibly hot… The metal housing looksdurable, but incredibly bulky, andtheres no word on optical image stabilisation or any other fancy specs.”
  • If the camera business went so-so…
  • The film businesswas collapsing…
  • No medicine can cure abusiness which there is no demand for at all.
  • Virtually no one isconsuming film, and thosewho used to produce it had two options: change their business or die.
  • Agfa ended up in the latter category.
  • “A development that is both surprising and painful."
  • Another one bites the dust.
  • Image attributions
  • Find out more:www.christiansandstrom.org