KODAK: DID YOU MAKE THE WRONG MOVE A DOZEN YEARS AGO?

[tomalophicon]

Going back to David's original post.."A dozen years ago"...well, this guy here, had already beaten them and they didn't even know it, a few years before that. Being well ahead of the curve requires genius, and they just didn't have it. Watch this at the 2.99 minute mark..about 20 years ago or so...that's not marketing, that's pure vision of a brilliant mind. http://youtu.be/zvjil4oB0uA

Couldn't find this, it changed to 3:00 after 2:59.

 

[Tony Egan]

Couldn't find this, it changed to 3:00 after 2:59.

You obviously haven't upgraded to digital clocks yet! Tsk.

 

[MaximusM3]

And to continue on your point Max, a brilliant visionary, statistically speaking, typically comes within the company, not a CEO from the outside (ie Perez), I think Photo Engineer should have ascended to the ranks of Kodak back in the day than Perez.....check this out, you will know what I mean....Jim Collins stats....amazing...
http://www.marketwatch.com/story/the-cult-of-the-superstar-ceo-2011-10-07

I agree. Unfortunately no CEO will ever compare to Jobs because he wasn't one (aside from the official title). He was the founder and brain of Apple and his concern was never about doing what's right to put money in shareholders pockets. He had vision, passion and love for what he did and the rest just came as a byproduct. Sure, he was a fantastic motivator, even dictator-like, but that was due to his drive to perfection and making something special. Interestingly enough, the superstar CEO of Apple was John Sculley, formerly of Pepsi, who fired Jobs and nearly took the company down. Kodak is unfortunately in need of a miracle now, more than a superstar CEO.

 

[railwayman3]

Undoubtedly Kodak has made wrong decisions....but, IMHO, the real problem is that there will always be unforeseen events and developments which no one can plan for, e.g. who would have foreseen, less than 20 or 30 years ago, the huge changes in lifestyle which would result from developments like computers, mobile phones, and digital photography itself. Did you invest in Apple, Vodafone, etc., when they were tiny companies (or MacDonalds when they had one restaurant )? I didn't!

O.K., big companies have planners and researchers who should foresee these changes. Most do, to a greater or lesser extent of success...Kodak was one of those which, for whatever reason, simply missed the boat.

 

[MaximusM3]

Undoubtedly Kodak has made wrong decisions....but, IMHO, the real problem is that there will always be unforeseen events and developments which no one can plan for, e.g. who would have foreseen, less than 20 or 30 years ago, the huge changes in lifestyle which would result from developments like computers, mobile phones, and digital photography itself. Did you invest in Apple, Vodafone, etc., when they were tiny companies (or MacDonalds when they had one restaurant )? I didn't!

O.K., big companies have planners and researchers who should foresee these changes. Most do, to a greater or lesser extent of success...Kodak was one of those which, for whatever reason, simply missed the boat.

Well, that is in part true. But, to be successful, one has to dream, think outside the box, while knowing that there will be inexorable progress. It's about being pro-active and creating those changes, without getting comfortable in the past and thinking that everything stays the same. It never does. That requires vision, big brains and huge determination.
I actually did invest in Apple when it was $20 but unfortunately didn't have enough money at the time to buy what I wanted to buy. I could have retired on it today, obviously. Kodak missed the boat for very clear reasons, mainly being a lack of vision, innovation and proper management at very defining moments in history.

 

[thegman]

If Kodak does indeed go bankrupt, then obviously, they made the wrong call all those years ago. There is no way that bankruptcy can be considered anything other than a failure. At the time it must have seemed so obvious though, and I think most of us would have made the same decision, assuming we were considering the future of the company, more than our own desires to promote film.

It's not too late though, movie film and stills film is a still a big business, not what it was, but still big. With the right management, and probably fairly brutal downsizing, I think Kodak can be profitable, and maybe even grow in years to come.

 

[steelneck]

O.K., big companies have planners and researchers who should foresee these changes. Most do, to a greater or lesser extent of success...Kodak was one of those which, for whatever reason, simply missed the boat.

No. Kodak was one of the drivers, inventors and developers of digital imaging.

This is usually the case when disruptive technology enters the scene, as you wrote "big companies have planners and researchers" and most of all they do have R&D. I have posted a number of links in this thread to someone, a scientist, that actually can explain this and give example on it from way different areas of technology. I is a pattern that repeat time and time again. Much of it has to do with history, hierarchy, cognitive dissonance, social psychology within and organization and so on.

What characterizes disruptive technology from just development of the old, is that the new tech is not better on what the old tech was good at (at least not initially), or else we would just be talking about devel of the old. Digital cameras was crappy toys in the beginning, not something professionals where asking for. But some companies asked their professional customers for advice, those companies do not exist anymore since a professional do not ask for a crappy toy.

 

[DREW WILEY]

As a professional buyer who routinely forecasts the fate of mfg corps with a high degree of accuracy, and who interacts with both CEO's and marketing mugwumps frequently, this is all just too familiar to me; and blaming shifting technology for Kodak's demise doesn't really explain things. I've seen all kinds of
US mfg companies weather all kinds of financial storms and competition from innovation and survive for a
century, but then go down in a matter of months due to bad mgt. It's just part of our Wall St culture right now. Like certain other failing corps, Kodak is trying to be a jack of all trades and master of none.
They call it diversification; but I call it, not knowning who you really are. Rather than keeping the home fort secure and defending it first, they've gone galavanting off thirty directions at once, and have forgotten what got them on the map in the first place. A common scenario when someone leading the parade has never done so in this particular costume. Generic CEO's who can run any company, and generic MBA's, have become the death spiral of quite a few honored brands.

 

[CGW]

As a professional buyer who routinely forecasts the fate of mfg corps with a high degree of accuracy, and who interacts with both CEO's and marketing mugwumps frequently, this is all just too familiar to me; and blaming shifting technology for Kodak's demise doesn't really explain things. I've seen all kinds of
US mfg companies weather all kinds of financial storms and competition from innovation and survive for a
century, but then go down in a matter of months due to bad mgt. It's just part of our Wall St culture right now. Like certain other failing corps, Kodak is trying to be a jack of all trades and master of none.
They call it diversification; but I call it, not knowning who you really are. Rather than keeping the home fort secure and defending it first, they've gone galavanting off thirty directions at once, and have forgotten what got them on the map in the first place. A common scenario when someone leading the parade has never done so in this particular costume. Generic CEO's who can run any company, and generic MBA's, have become the death spiral of quite a few honored brands.

As generics go, that's how I'd describe this analysis.

they've...forgotten what got them on the map in the first place.

That would be what consumers stopped buying: film, paper, chemistry.

 

[Photo-gear]

Without your obvious expertise in this area of business, I have the same understanding of the situation.

As a professional buyer who routinely forecasts the fate of mfg corps with a high degree of accuracy, and who interacts with both CEO's and marketing mugwumps frequently, this is all just too familiar to me; and blaming shifting technology for Kodak's demise doesn't really explain things. I've seen all kinds of
US mfg companies weather all kinds of financial storms and competition from innovation and survive for a
century, but then go down in a matter of months due to bad mgt. It's just part of our Wall St culture right now. Like certain other failing corps, Kodak is trying to be a jack of all trades and master of none.
They call it diversification; but I call it, not knowning who you really are. Rather than keeping the home fort secure and defending it first, they've gone galavanting off thirty directions at once, and have forgotten what got them on the map in the first place. A common scenario when someone leading the parade has never done so in this particular costume. Generic CEO's who can run any company, and generic MBA's, have become the death spiral of quite a few honored brands.

 

[wblynch]

... Generic CEO's who can run any company, and generic MBA's, have become the death spiral of quite a few honored brands....

Yeah buddy, you got that right !

 

[Aristophanes]

As generics go, that's how I'd describe this analysis.

they've...forgotten what got them on the map in the first place.

That would be what consumers stopped buying: film, paper, chemistry.

So that market shrunk by over 99.5%.

Generic MBA CEO's or not, look at Kodak's Japanese foil, Fuji. Fujifilm.

They have the largest range of compact cameras on the digital market and are everywhere. They kept a revenue stream similar to that of their film era by managing the transition and preserving shareholder value.

Ironically, Fuji is the jack-of-all trades in imaging and optics. Fuji's lost more value due to a general Nikkei index decline rather than anything company specific.

Putting Fuji beside Kodak is probably a very good test case for business practices when there are technological shifts.

 

[removed account4]

if koduck continued "analog only" they would have taken the dirt nap years ago ..
at least they gave us traditional photography- users a few more years using the great products they made.

 

[Rudeofus]

if koduck continued "analog only" they would have taken the dirt nap years ago ..

Interesting theory ... after it has been written by knowledgeable people here over and over again, that Kodaks film business has been highly profitable while Kodaks digital business incurred loss after loss after loss in the last ten years.

It is exactly this thinking along the lines "film is over and done with, let's do something else" which brought Kodak down. Seeing that phrase parroted over and over again here in this very forum just tells me that Kodak's management was not alone in its misjudgment of the situation.

The problem for Kodak with their "generic CEOs" and "generic MBAs" was not the decline of the film market, but the "boost turnover, ignore revenue" and the "grow or die" mentality.

 

[Jeff Searust]

Personally, I think Kodak made the wrong decision about 13 years ago. If Kodak came out with a $100-150 digital camera instead of APS, they would have cornered the market for digital cameras and would still be relevant today.

Yup...


ooooh APS--- that's going to make me dump and forget all this digital malarky

 

[removed account4]

Interesting theory ... after it has been written by knowledgeable people here over and over again, that Kodaks film business has been highly profitable while Kodaks digital business incurred loss after loss after loss in the last ten years.

It is exactly this thinking along the lines "film is over and done with, let's do something else" which brought Kodak down. Seeing that phrase parroted over and over again here in this very forum just tells me that Kodak's management was not alone in its misjudgment of the situation.

The problem for Kodak with their "generic CEOs" and "generic MBAs" was not the decline of the film market, but the "boost turnover, ignore revenue" and the "grow or die" mentality.

if you talk to people in the mini lab business
or photo store business or professional photographers
you will realize that koduck has been flailing for a long time.

they tried to be everything to everyone, when they should have just been one thing.
20+ years ago my uncle came to me and said " did you see pop photography magazine recently ?
your film camera is a dead end "
that was 20+ years ago the writing was on the wall ...
there are/were plenty of companies that make/made analog based
supplies, if they were a silent partner and let a small company
( forte ? ) run with their film business and then koduck concentrated on
being a modern company ... we would still have both of them.

it really has nothing to do with mba's but a dead-end which came up faster
than they thought ...

 

[DREW WILEY]

There's nothing dead-end about traditonal film or printing paper at all. Outfits like Freestyle can hardly
keep it in stock. I've ordered 8x10 TMY film several times this year, and each time is was cut from
a completely different batch. That means they made multiple coatings of a single product. Hardly a loser.
I bought four leftover boxes of 8x10 TMX from the balance of an entire master roll bought by a single
industrial customer. The fact that hobby use of small camera films has diminshed relative to digital
pocket cameras does not mean that even this category is doomed as a viable market segment. The
world population is pretty damn big. But when the "market share" nonsense starts going thown around
on Wall St, rather than hard net profits, then the perspective can be utterly skewed. For market share
is a plastic term that can be manipulated in a thousand different ways, generally for the benefit of a
handful of individual at the top. Kodak has long been a diverse corp and not just a maker of film and
paper. Fine. But if you neglect a division that actually is turning a profit, albeit less than it once was,
just to go speculating on what else you can get into, where you've got a helluva lot of competition
anyway, that's a pretty risky business model.

 

[CGW]

There's nothing dead-end about traditonal film or printing paper at all. Outfits like Freestyle can hardly
keep it in stock. I've ordered 8x10 TMY film several times this year, and each time is was cut from
a completely different batch. That means they made multiple coatings of a single product. Hardly a loser.
I bought four leftover boxes of 8x10 TMX from the balance of an entire master roll bought by a single
industrial customer. The fact that hobby use of small camera films has diminshed relative to digital
pocket cameras does not mean that even this category is doomed as a viable market segment. The
world population is pretty damn big. But when the "market share" nonsense starts going thown around
on Wall St, rather than hard net profits, then the perspective can be utterly skewed. For market share
is a plastic term that can be manipulated in a thousand different ways, generally for the benefit of a
handful of individual at the top. Kodak has long been a diverse corp and not just a maker of film and
paper. Fine. But if you neglect a division that actually is turning a profit, albeit less than it once was,
just to go speculating on what else you can get into, where you've got a helluva lot of competition
anyway, that's a pretty risky business model.

Private opinions are one thing but there's no such thing as private facts. You really need to take a deep breath and look over the trend for film sales since 2000 for some much needed perspective. There's nothing "plastic" about that data. Kodak's "profits" from film sales are tiny compared to a decade ago. The mass market for film is dead and won't come back. That's where the money was.

http://theonlinephotographer.typepad.com/the_online_photographer/2011/05/film-falls-off-a-cliff.html

http://www.shutterbug.com/content/industry-perspective-closing-end-era

 

[Aristophanes]

There's nothing dead-end about traditonal film or printing paper at all. Outfits like Freestyle can hardly keep it in stock. I've ordered 8x10 TMY film several times this year, and each time is was cut from a completely different batch. That means they made multiple coatings of a single product. Hardly a loser. I bought four leftover boxes of 8x10 TMX from the balance of an entire master roll bought by a single industrial customer. The fact that hobby use of small camera films has diminshed relative to digital pocket cameras does not mean that even this category is doomed as a viable market segment. The world population is pretty damn big. But when the "market share" nonsense starts going thown around
on Wall St, rather than hard net profits, then the perspective can be utterly skewed. For market share is a plastic term that can be manipulated in a thousand different ways, generally for the benefit of a handful of individual at the top. Kodak has long been a diverse corp and not just a maker of film and paper. Fine. But if you neglect a division that actually is turning a profit, albeit less than it once was, just to go speculating on what else you can get into, where you've got a helluva lot of competition anyway, that's a pretty risky business model.

The worry is not net profits nor market share; it's gross revenues.

Roll film production is a large-scale, capital intensive, industrial process requiring a certain economy-of-scale and retained technical skills. While you may think the hobby industry is large enough, the reality is a few emulsion factories may require millions of customers to merely keep the supply chain going. Those millions may not be there.

The production of film scales up well, but not down. Right now legacy MPI cinema sales are what keeps the revenues afloat and the film still photo industry viable. Both are in decline and no one is sure where the market bottom is. So if Kodak enters bankruptcy, its film production could outright halt, forever, because no one will buy into a declining market and the skilled people necessary will bolt before the restructuring is finished. This could literally make Kodak film production worth nothing. Kodak may hit bottom before the real market demand does. It's a scary but very real scenario. More likely is film production will be put on life support,perhaps with more product cuts. It is un known what is or is not profitable. It may be everything but roll film is not profitable and is eliminated. The days of sentiment to small markets may be over with new, ruthless, vulture, ownership. No one knows.

 

[wblynch]

...But if you neglect a division that actually is turning a profit, albeit less than it once was, just to go speculating on what else you can get into, where you've got a helluva lot of competition anyway, that's a pretty risky business model.

That's what they mean when they say, "Don't go chasing waterfalls..." ??

 

[Aristophanes]

That's what they mean when they say, "Don't go chasing waterfalls..." ??

[video=youtube;6Qv5YVKWLy0]http://www.youtube.com/watch?v=6Qv5YVKWLy0[/video]

 

[removed account4]

There's nothing dead-end about traditonal film or printing paper at all. Outfits like Freestyle can hardly
keep it in stock. .........

drew i see what you are saying ... but
15 years ago every photo store was " a freestyle "
now traditional photography is a niche market ...

a raisin is still a grape, but it is dried out,
traditional photography used to be a grape ...

 

[tomalophicon]

Raisins are highly delicious.

 

[dreamingartemis]

Raisins are highly delicious.

and last longer

 

[wblynch]

why are there so many film haters in a film lover's website?