Business Models of The Past: The Eastman Kodak Company Business Case.
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Business Models of The Past: The Eastman Kodak Company Business Case.
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Kodak was a great company that dominated its industry for more than 80 years, making billions in revenues and employing more than a hundred and fifty thousand employees worldwide. Armed with the perfect business model and a strong vertical integration, Kodak innovated and offered some of the best products and services in the imaging business. But to the surprise of the world, Kodak filled for bankruptcy in January 2012!! This visual case is dedicated to understand why Kodak, despite its potential and strong R&D, failed to compete in the global market. Comments are welcomed.
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Business Models of The Past: The Eastman Kodak Company Business Case.
- 1. haniwnaguib.com Business Models of The Past Eastman Kodak Company Business Case Jan 2016. All copyrights respected.
- 2. copyrights for all graphics, materials, cases and examples used into this presentation are respected.The materials are used for teaching and training purposes only. Prepared by: Hani W.Naguib, MBA. haniw.naguib@gmail.com www.haniwnaguib.com @haniwnaguib JOIN THE CONVERSATION, LIKE THE CASE AND SHARE YOUR COMMENTS BELOW…
- 3. Kodak was established in 1888 by George Eastman…
- 4. In 2012, Kodak filed for Chapter 11 Bankruptcy Protection…
- 5. How DID This Happen???
- 6. First, Lets take a Look Kodak’s Lucrative 100 years Business Model…
- 7. Hani W. Naguib Jan. 2016 1.0 Camera “YOU PRESS THE BUTTON, WE DO THE REST” Amateur Photographers Kodak Film Film Processing
- 8. Hani W. Naguib Jan. 2016 1.0 Camera Kodak Shops By Mail RAZOR - BLADE STRATEGY Amateur Photographers LOCK-IN Kodak Film Film Processing Advertising Kodak Moment 3rd Party Shops
- 9. Hani W. Naguib 1 X Camera Sale Jan. 2016 1.0 Camera Film Sales Recurring Revenues Film Processing Recurring Revenues Amateur Photographers Kodak Film Film Processing (Kodak Kiosks)
- 10. Kodak had a portfolio of diverse business models…
- 11. http://media.democratandchronicle.com/kodaknext/#timeline Special Report, September 1, 2013 And was Doing Extremely Well…
- 12. If you wanted to photograph your child’s birthday party you would likely be using a Kodak Camera, Kodak film and Kodak flash cubes…
- 13. You have it processed either at the corner drugstore or mail the film to Kodak and get back prints made with Kodak chemistry on Kodak paper…
- 14. Kodak was making money on every step of the photographic process…
- 15. It was the Perfect Business Model…
- 16. Allowing Kodak to command 90% of film sales and 85% of camera sales in the U.S.
- 17. But…
- 18. http://media.democratandchronicle.com/kodaknext/#timeline Special Report, September 1, 2013 Kodak was not able to sustain Growth & was Facing Decline in Sales and Profits…
- 19. http://media.democratandchronicle.com/kodaknext/#timeline Special Report, September 1, 2013 & By 2011, Kodak has reduced its work force by more than 80% carrying $764M Losses…
- 20. http://media.democratandchronicle.com/kodaknext/#timeline Special Report, September 1, 2013 Kodak Stock Price taking a dive reaching 5.5 cents
- 21. Why??
- 22. Kodak lost the right MOMENT to enter the digital camera market…
- 23. Despite that…
- 24. In 1975, Kodak had already the first Digital Camera Prototype…
- 25. It was invented by Mr. Steven Sasson, a 24 year old engineer …
- 26. In 1989, Mr. Sasson & Robert Hills, created the first modern digital camera that looks and functions like today’s professional models…
- 27. Kodak’s marketing department was not interested. The camera would “eat away at the film sales”…
- 28. Despite that…
- 29. In 1996, Kodak tried to duplicate the film based Razor-blade business model, with film- based digital Camera…
- 30. The Advantix Preview digital camera allowed users to preview their shots and indicate how many prints they wanted…
- 31. Yet it still used a film and emphasized print because Kodak was in the photo film, chemical and paper business…
- 32. It Flopped and Kodak had to ride off $500M almost the entire cost of development…
- 33. Kodak Continued to offer Digital Cameras and managed to acquire 40% of the U.S. market
- 34. But…
- 35. By mid-2000, digital cameras became really popular…
- 36. By 2009, Kodak announced that it would cease selling Kodachrome colour film ending 74 years of production…
- 37. However, digital Camera Competition was really fierce, driving the profit margins really low…
- 38. By 2010, Kodak’s market share was down to 7% and came in the 7th place after Canon, Sony, Nikon,and others…
- 39. Not to mention the rise of the SMARTPHONE Cameras and APPs…
- 40. Eventually…
- 41. Sales volume went down too, as more (ASIAN) competitors entered the market…
- 42. And…
- 43. Eventually in Jan., 2012, Kodak Filed for Chapter 11 Bankruptcy Protection…
- 44. In Feb. of 2012, Kodak announced that it will no longer produce digital cameras…
- 45. Will Kodak be able to make a turn around??
- 46. Share The Experience #AUCVlab #Cycle6 #BootCamp AFTER THE LUNCH BREAK…
- 47. Kodak has been able to RE-EMERGE from Bankruptcy in 2013…
- 48. By reorganizing its business operations, creating a commercial and a consumer units…
- 49. And Selling off or Divesting most of its other activities. Consumer digital imaging; film, photofinishing and entertainment, and graphic communications Units.
- 50. Focussing on digital imagining business (B2B & B2C)…
- 51. Lets Put it All Together…
- 53. 1
- 54. Kodak was making TONS of money from the film business…
- 55. Kodak was Afraid to let go of its high profit margin film business…
- 56. 2
- 57. Kodak evaluated the digital camera as a THREAT to its film business…
- 58. and not as an OPPORTUNITY to disrupt the market…
- 59. Despite that they were the First ones to have a digital camera!!!
- 60. By the time they entered the market, they treated the camera as a TECHNOLOGY they had to supply and not as an OFFERED VALUE to their loyal customers…
- 61. 3
- 62. In 1989, Colby Chandler, the CEO, retired. The choices came down to Phil Samper and Kay R. Whitmore…
- 63. Whitmore represented the traditional film business, where he had moved up the rank for three decades.
- 64. Samper had a DEEP APPRECIATION for digital technology…
- 65. The board chose WHITMORE…
- 66. Mr. Whitmore said he would MAKE SURE Kodak stayed closer to its core businesses in film and photographic chemicals… The New York Times (12/9/1989)
- 67. Whitmore lasted a little more than three years, before the board fired him in 1993!!! The New York Times (12/9/1989)
- 68. 4
- 69. Company Culture was so RIGID for change…
- 70. Old School Employees were not ACCEPTING the move to digital… Vs
- 72. Kodak Future…
- 73. Kodak Android Based SmartPhone??
- 75. Better Late than Never…
- 76. copyrights for all graphics, materials, cases and examples used into this presentation are respected.The materials are used for teaching and training purposes only. Prepared by: Hani W.Naguib, MBA. haniw.naguib@gmail.com EASTMAN KODAK COMPANY Evaluating Business Models of The Past. THE CURIOUS CASE OF PEPPER THE ROBOT WITH A HEART Understanding the Business Model of The Future. THE STARTUP STORY APPRECIATE THE BUSINESS MODEL MINDSET Visual Thinking Exercise UBER THE NETWORK ORCHESTRATOR Understanding The Evolution of A Revolution. DISRUPTING THE BANKING INDUSTRY Understanding The FinTech Revolution of Retail Banking Popular New Popular www.haniwnaguib.com @haniwnaguib LIKE WHAT YOU SEE, CHECK MORE VISUAL BUSINESS CASES