Kodak and Facit
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Kodak and Facit

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Kodak and Facit Kodak and Facit Presentation Transcript

  • Christian Sandström holds a PhD from ChalmersUniversity of Technology, Sweden. He writes and speaks about disruptive innovation and technological change.
  • There are many striking similarities between Kodak and Facit, a former Swedish manufacturer of mechanical calculators.
  • This presentation will put the twocompanies next to each other,illustrate and seek to explain those similarities.
  • Facit prospered in akingdom called Sweden.
  • The company wasfounded in a small town called Åtvidaberg.
  • Kodak was founded in Rochester, NY.
  • Along the Genesee river in Rochester…
  • … The visionary George Eastmanbuilt the Eastman Kodak company.
  • Along the ’river’ in Åtvidaberg…
  • … A man named Elof Ericsson founded ÅtvidabergIndustries (whichwas named Facit later on).
  • The successes of these companies were based upon two major product innovations.
  • In the Kodakcase it was the Roll film…
  • … a product that empowered people to take pictures on their own.
  • In the Facit case it was the world’s first ten-digit calculating machine…
  • … A masterpiece of mechanical engineering.
  • Both companies grew rapidly…
  • … And became sources of national pride.
  • As Kodak grew, Rochester grew. More and morepeople moved here from the countryside in order to get a job at the company.
  • In Sweden, people moved to the small town Åtvidaberg. Here, there were plenty of jobs at Facit.
  • ”A lot of peopletravel to Facit for work.”
  • Basically, these two cities wouldn’t have grown into what they were without Kodak and Facit.
  • The two companies provided theirpopulations with well paid jobs…
  • … from the cradle…
  • … to the grave…
  • A job was a job for life…
  • … And it gave a stable income for a good family life.
  • Those who didn’t work for the company, eitherworked for suppliers, or the local government, which obtained its tax revenues from the firm.
  • ”Willing to cross party boundaries for the company.”
  • Mr. Eastman made a huge fortune from his success with Kodak…
  • … He lived here…
  • … Mr. Ericsson lived here…
  • … down by the lake…
  • … ministers and directors came from all over the world in order to meet here and build networks.
  • These two men also made sure to take care of the local community.
  • Elof renovated the soccer stadium and donated vast amounts of money to the local team.
  • Mr. Ericsson also re-built the local church where he currently rests in peace.
  • There are at least 30 organizations that were either created or partly funded by Eastman.
  • The University of Rochester…
  • … The Eastman School of Music Student Living Center…
  • … The Eastman Dental Center…
  • In Rochester, people refer to Kodak as ’The Great Yellow Father’…
  • Both men are remembered morethan half a century after their death.
  • This statue of Elof Ericsson was raised by the company and its employees in 1963.
  • When Elof’s son Gunnar took over as CEO, he managed the company in a similar way…
  • To sum it up: Rochester became a Kodak town…
  • … And Åtvidabergbecame a Facit town.
  • But the companies had much more in common…
  • … They both enjoyed a considerable global expansion.
  • Both companies were very vertically integrated – owning and controlling the entire value chain…
  • Kodak signs can still be foundeverywhere throughout the world.
  • Just like Kodak, Facit controlled the entire value chain…
  • … From the production of special components that were needed in the products…
  • … To the close relationship with the end customer.
  • Both these companies were turned upside down by the electronic revolution…
  • In 1971-72, Facit’s coggwheels weresubstituted by integrated circuits…
  • The same thing happened to Kodak about 30 years later.
  • … Both companies lost theirtechnological leadership…
  • … for the simple reason that the technology was now all about electronics.
  • The value of producingspecialized parts was rendered obsolete…
  • … Since those parts weren’t needed anymore.
  • Controlling the end of the value chain was alsoan asset that lostits value for both companies.
  • People were not consuming film anymore…
  • And they stopped buying calculators from a special company with a huge sales organization.
  • Both companies went through some tough times…
  • … And so did their respective societies.
  • Rochester and Åtvidaberg had become verydependent upon their respective companies…
  • … and this started to become painfully obvious.
  • A job at Kodak or Facit used to be a job for life. Not anymore.
  • Tax revenues decreased at a furious pace when all those jobs were lost.
  • While both cities have undergone some majorchanges, they haven’t ended up as ghost towns.
  • Summing up once again, the Kodak and Facit stories are strikingly similar, even though the companies were in different industries, in different countries and at different points in time. Why?
  • Industries tend to grow and prosper in certain ways.
  • They’re founded around a product innovation, which is then further developed and introduced throughout the world…
  • This is often done by an entrepreneur who spots the new opportunity.
  • As industries grow and prosper they becomeincreasingly vulnerable to technological change.
  • The vertical integration was necessary in order to handle a complex product.
  • When the technology changed and the productbecame much simpler, it did not require the same dominance of the value chain.
  • … And since the companies once upon a time madetheir cities grow, those towns will go through some structural changes when the firm declines.
  • Image attributions
  • Thanks to ’Brukskultur Åtvidaberg’ och themunicipal government of Åtvidaberg. The Facit archive is a fantastic source.
  • Find out more:www.christiansandstrom.org