ETHICS PAPER The brand name Kodak, formerly known as Eastman Kodak Company, with it's yellow "K" symbol is synonomous with pictures, or at least it used to be. During most of the 20th century Kodak held the top position in photographic film, and in 1976, had a 90% market share of photographic film sales in the United States. Their main focus with imaging solultions and services for business is headquartered in Rochester, New York and incorporated in New Jersey. Founder, George Eastman, invented the use of roll film, which helped bring photography popularity. Years later, roll film served the basis of motion picture film. Fast forward a few decades, we learn that Kodak begins to struggle financially in the late 1990s as a result of the decline in sales of photographic film and its slowness in transitioning to external trends like digital photography, despite having invented the core technology used in current digital cameras. As part of a turnaround strategy, Kodak focused on digital photography and printing. They also attempted to generate revenues through aggressive selling patent litigation. As digital cameras beame the new face of imaging in the early 21st century, the company struggled to reinvent itself.
In January 2012, Kodak filed for Chapter 11 bankruptcy protection and had to make a number of painful cuts to stay afloat. Around that same time Kodak won court approval to quit providing health and welfare benefits to 56,000 of their retirees and dependents. In February 2012, Kodak announced that it would stop making digital cameras, pocket video cameras and digital picture frames and focus on the corporate digital imaging market. In August 2012, Kodak announced the intention to sell its photographic film (excluding motion picture film), commercial scanners and kiosk operations as a measure to emerge from bankruptcy. In January 2013, the Court approved financing for the company to emerge from bankruptcy by mid-2013 Kodak sold many of its patents. On September 3, 2013, Kodak emerged from bankruptcy having shed its liabilities and making several business exit strategies by selling off numerous operations, vacating real estate and the shut down of their digital camera business, not to mention serving several thousand lay offs worldwide.
What most notably caused Kodaks demise as the leader in imagaing was that they stubbornly stayed the course. They risked their protected investments to follow their current strategy instead of responding to market changes and it led to disaster. A lesson learned for all managers and executives is that it's not a good idea to kid yourselves into thinking that a problem isn’t so severe or bad enough to delay a reaction until it is too late. Kodak stuck to their guns in the face of blatant danger: digital photography. Kodak executives had made a detailed analysis of the threats posed by digital technology as far back as 1981, when Sony introduced the first commercial electronic camera, the Mavica, but nobody listended and they couldn’t shake their attachment to photo prints and traditional processing. The margins were hard to pass up as well with 60% on film, chemicals, and processing, versus 15% on digital products. Digital technology also eliminated the huge recurring revenue stream that came from film and reprints.
When the economics of the new model don’t measure up to the economics of the old then companies falter because they don’t consider all the options. This is a common reason why companies don’t change course. It's either sink or swim! Kodak’s executives couldn’t fathom a world in which images were vanishing away and never printed. The company fought a preventative delayed action against digital cameras and did not make a big move into the digital until the early part of 2000. It does now have a place in the online photo-sharing market, but its hesitation proved costly. Over the past decade, Kodak has lost 75% of its stock market value and, as of 2007, the company had fewer