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Kodak, a failure to innovate?

It's becoming common to use Kodak as a showcase for failing to innovate: the company is described as having missed the digital revolution because it was focused on protecting its core business, traditional photographic film. The reality is different, though. Kodak is in fact one of the first companies to have worked on digital imaging. In 1992, for one of my clients' projects, we bought a digital camera. It was a Kodak, the DCS 200, and it costed about $200K. Yes, that's two hundred thousand US dollars. One can not say Kodak was ignoring the digital revolution! Today, Kodak is still leading digital imaging, as the company holds many patents in this field that are used in products such as HP printers. The painful Kodak factory closures that one can see nowdays are nothing but the price to pay to transition from one era to the other, from the era when Kodak was a chemist to an era when it is a software company. For all its mistakes, Kodak is doing what few companies have been able to do.
No doubt, Kodak was victim of the innovator's dilemma as described by Christensen: the company tried to "cram" digital photography into traditional photography with the pathetic APS system. But that didn't stop the them from pressing ahead and ending up, today, in the leading group of digital camera manufacturers. Not bad for a chemist! The initial dilemma, however, probably costed them their leadership, maybe forever, as forecasted by Christensen's theory.

Posted by Philippe Silberzahn on December 7, 2004 at 05:41 PM in Case studies | Permalink


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