So what exactly should Kodak have done?

[Photo Engineer]

And these CEOs will laugh all the way to the bank with their princely rewards no matter what anyone says. And it will often be on the backs of those laid off on his way up the ladder.

PE

 

[cmacd123]

I must agree with you that Kodak cameras aren't good. The old Retina's were fine but compared to others they are not that good. So although they make great film and at least in the beginning great image sensor they simply couldn't make good cameras. The market for digital photography is for making the entire camera and not just the sensor.

Kodaks Push historicaly in Cameras was to make reliable and inexpensive cameras that were Good enough. (perhaps the long running "If it eats film" mentality that was part of the culture from a way back)

Look at an instamatic X-15 and you see something with wide tolerances, lots of stamped metal parts that each do three jobs, clearnces that a stray grain of sand could not stop, all at a 20 buck retail including a 12 exposure roll of Kodacolor. Heck the one year guarantee was effectively unlimited... Send them back a broken 2 or 3 year old camera and they would fix it free.

their consumer digital Camera were instead outsourced to a firm they later bought. Having the design made without the corporate wisdom meant that the design did not take into account all the consumer behaviour that the Hawkeye works had learned over the yaers.

 

[Ian Grant]

It's interesting you (Ron - PE) mention how the laws differ in different countries, I don't think the CEO and his buddies at EK on the board could have got away with what they did to Kodak in Europe.

There were articles a few years ago now in the more serious UK newspapers, naming a Kodak non executive board member who recruited Peres and others and then went into detail about how they were paying themselves high wages and bonuses as the company was losing business, but still cash rich.

The irony was that Peres was advising the US President (as a business adviser) as he oversaw the rapid decline of EK which he accelerated.

I knew that when Kodak closed their research facilities at their (then) quite new Cambridge Science Park site (in the UK) and dropped their high end DSLRs there was going to be a huge shrinkage. It was obvious the top management hadn't got a clue.

On the the other hand through work I knew a very senior UK Fuji employee and they'd predicted the switch from film to digital quite accurately, and so had Edwin Land before his death.

Ian

 

[cmacd123]

Regarding some previous posts here, Kodak once made Graphic cameras (LF) and the early 35mm cameras were made for Kodak and were quite high quality. However, the government made Kodak divest itself of the professional camera business. They could no longer sell film with the process included. And, when the president of Motorola moved over to Kodak to take over, he knew about imaging cell phones but was probably prohibited from sharing this with EK.
PE

Kodak for many years dominated the photo industry, and the restictions they worked under were an attempt to keep a competitive market. the photofinishing thing was more about Kodaks ability at the time to shut all the photo-finishers out entirely if all the film they sold came with processing. That only applied in the USA market BTW, here in Canada Kodachome was ALWAYS (until near the end) sold with processing included (for example KM-135-36P) The edge printing was slightly different on the processing included film.

Fuji Was one of the Most aggressive competitors in any industry, once the green boxes started coming, they matched the yellow boxes almost model by model. Generally the fuji product was compairable quality but about 5-10% cheaper. Again Kodak was restricted in the US market from offering private label film, in an attempt to hold Market share for Ansco and 3M, Fuji and Sakura-Konica both came into the north American market as GAF- Ansco was on it's last legs and rapidly filled the void.

Fuji not only has a compatible slide film, but sold it with processing vouchers in teh form of envelopes which paid for one roll of film to be processed by a local lab. Back at the camera counter where I worked at that time we would staple an fuji envelope to the the processing envelope and the slides would come back as "No Charge" Each lab had their own Post box but there was an arrangement so they could accept anybody’s vouchers. As part of the deal most of the labs had "fujiichrome" slide mounts for their fuji brand slides.

In the later years Kodak was gotten back the ability to make private label stuff (Arista Professional Anyone?) and I suspect that Kodak could very well have had permission ot make a pro digital camera line if they had of cleared it with the FTC.

 

[Photo Engineer]

It's interesting you (Ron - PE) mention how the laws differ in different countries, I don't think the CEO and his buddies at EK on the board could have got away with what they did to Kodak in Europe.

There were articles a few years ago now in the more serious UK newspapers, naming a Kodak non executive board member who recruited Peres and others and then went into detail about how they were paying themselves high wages and bonuses as the company was losing business, but still cash rich.

The irony was that Peres was advising the US President (as a business adviser) as he oversaw the rapid decline of EK which he accelerated.

I knew that when Kodak closed their research facilities at their (then) quite new Cambridge Science Park site (in the UK) and dropped their high end DSLRs there was going to be a huge shrinkage. It was obvious the top management hadn't got a clue.

On the the other hand through work I knew a very senior UK Fuji employee and they'd predicted the switch from film to digital quite accurately, and so had Edwin Land before his death.

Ian

Look at what Kodak had to do for UK employees during the bankruptcy proceedings. And now we have Alaris in the UK and no benefits for older retirees in the US. Different laws and different results!

I too have Fuji friends, and have seen that they are still doing R&D on film. Last time I saw one, he asked me to take a picture of him and then told me that I was holding a camera that contained a roll of experimental Fuji film due to debut soon.

PE

 

[Prof_Pixel]

I knew a very senior UK Fuji employee and they'd predicted the switch from film to digital quite accurately, and so had Edwin Land before his death.

No rocket science prediction there. When I worked on the original Kodak DCS project in the late 80's, it was pretty obvious to us the switch would happen. Kodak managers just decided to ride out the traditional product decline. Note that it then took about 20 years for Kodak to go bankrupt.

 

[Sirius Glass]

And these CEOs will laugh all the way to the bank with their princely rewards no matter what anyone says. And it will often be on the backs of those laid off on his way up the ladder.

PE

Yep

 

[Marvin]

I always thought Minolta would have been a good match for Kodak but Sony snapped them up. Minolta would have given them camera manufacturing and an existing line of cameras to build on. Could have kept the Minolta name and also sold them under the Kodak name. Minolta also had patents that could have been used by Kodak. I don't know if Kodak would have had the money to buy Minolta at the time Sony bought them.

 

[Sirius Glass]

+1

Kodak did not listen to me when I worked there, so I left and as always I was right and my bosses were wrong. What can I say?

Same thing for me. Hahahaha.

JK

PE

Kodak should have listened to PE and me. I brought back five companies from near death to winning all the follow-on contracts and successfully completing them. When management listened to me they succeeded, when they did not I would leave rather than riding a sinking ship to Davy Jones' locker.

 

[benjiboy]

If I knew "exactly what Kodak should have done" I would be a top business consultant, and I'm just an amateur photographer.

 

[Prof_Pixel]

If I knew "exactly what Kodak should have done" I would be a top business consultant, and I'm just an amateur photographer.

+1

 

[Kilgallb]

Maybe Kodak got it all correct. Milk film in the 1990s for billions, a sure bet rather than risk it competing with the Asian electronics giants. Who says a company had to last forever. Did EKs heirs get out soon enough, maybe. Us 99 percenters lost a lot in our mutual funds but, hey, that's capitalism.

 

[Photo Engineer]

I always thought Minolta would have been a good match for Kodak but Sony snapped them up. Minolta would have given them camera manufacturing and an existing line of cameras to build on. Could have kept the Minolta name and also sold them under the Kodak name. Minolta also had patents that could have been used by Kodak. I don't know if Kodak would have had the money to buy Minolta at the time Sony bought them.

Konica?

 

[Ken Nadvornick]

+1

Kodak was never fated to crash and burn. To think that is denial. Kodak encountered a rapid change in customer purchasing preferences and wouldn't—or couldn't—evolve to address those changing preferences. It's not that those changes could not be overcome, it's that Kodak could not overcome them.

Finger pointing at evolving markets and then throwing up one's hands and saying nothing more could have been done to avoid the epic failure is nonsensical. The first responsibility of any company is to evolve as their customers evolve. Anything less is institutional suicide.

Under competent upper management, including even just a tiny bit of vision by the board of directors, Kodak had an opportunity to become the preeminent visual company in all image recording technologies at the point in time of emergence of the greatest visual delivery technology the world has ever seen.

Many years ago I worked on the first floor of an office complex that coincidently had a brand new company located up on the third floor. That new company was a tiny operation with only a handful of people led by someone who saw the Internet coming and realized that the two most important carriers over that medium were going to be words and pictures, because of the ease with which they could be abstracted.

Sensing that coming historic shift, this individual acted to implement a strategy to monopolize the control of as many images as possible. One day I came in to work and noticed the new company's founder sitting and discussing the ins and outs of online transaction pricing models in our own company CEO's office.

(We were the regional backbone EFT switch for the Pacific Northwest, Alaska, and Hawaii, processing and routing 80-100 million financial transactions every month for a couple of pennies each, a fabulous recurring income business model.)

A couple of hours later I again encountered the founder out in the parking lot, where he had evidently misplaced his car. Nice to see the world's richest person alone without an entourage. Mildly amusing that he couldn't find his vehicle. But dead serious that he already knew the Internet's commercial potential regarding images. That tiny new company up on the third floor was Corbis. The founder was Bill Gates.

Cut back to Kodak. Here's the world's premier image-generating technology company with over a century of expertise, legendary R&D laboratories, a recurring revenue model that dwarfs everyone, almost total market control and market domination—so much so that they were darned near continuously under anti-trust sanctions of some sort—and a brand that is instantly recognizable around the world as being synonymous with photographic images.

Then along comes the Internet, the most staggering new delivery vehicle for words and images in the history of mankind, with an almost unlimited upside growth potential. A voracious "eater" of pictures who does not really care what technology generated those pictures. All it wants is a never-ending supply of them.

So what does Kodak do?

They attempt to abandon the direct imaging market entirely and transform themselves into a commercial package printing operation...

Really? Really???

What sort of visionaries run a company like that?



Ken

 

[lxdude]

I always thought Minolta would have been a good match for Kodak but Sony snapped them up. Minolta would have given them camera manufacturing and an existing line of cameras to build on. Could have kept the Minolta name and also sold them under the Kodak name. Minolta also had patents that could have been used by Kodak. I don't know if Kodak would have had the money to buy Minolta at the time Sony bought them.

Minolta and Konica merged in 2003, and are now called Konica Minolta. The camera business was sold to Sony in 2006, and Konica stopped making film and paper shortly thereafter.

 

[Sal Santamaura]

If I knew "exactly what Kodak should have done" I would be a top business consultant...

No, you wouldn't be. Implicit in the question "So what exactly should Kodak have done?" is "in order to survive/thrive long term." That's what I and others who've posted responses intended our answers to address. However, "top business consultants" have no such intentions.

The huge corporate entities that hire "top business consultants" are seeking ways to accomplish two things. First, look good to "Wall Street." Second, make use of that "next-quarter potential/promise" to pump the stock price and maximize executive compensation packages. Nothing else matters. All assets and personnel are expendable in the pursuit of these two goals.

Anyone who really does know what Kodak should have done is forever condemned to being ignored by large corporations.

 

[MattKing]

So what does Kodak do?

They attempt to abandon the direct imaging market entirely and transform themselves into a commercial package printing operation...

Really? Really???

What sort of visionaries run a company like that?



Ken

Actually, Kodak's purchase of Creo (which is what has led to most of their remaining business) was probably the only smart thing they did. Creo was well positioned in its marketplace, innovative and profitable.

If Kodak had not earlier essentially abandoned the commercial printing supply business then Creo would have been the sort of acquisition that Kodak used to make - the ones that were instrumental in making the company as big and diversified and successful as it once was.

Divisions like graphic arts, microfilm, Eastman Chemical at one time were instrumental in Kodak's health and prosperity.

I would find it much more palatable if Kodak was now a diversified and healthy company that still supported its film business, but made more of its profits from its other parts. And it wouldn't bother me if those other parts weren't direct imaging based - I truly believe that the days of direct imaging being a source of healthy and large business profits are gone.

 

[Ken Nadvornick]

In anecdotal numbers quoted online I see several references to the number of photos ever made as being somewhere around 3.8 trillion. That's the estimated total aggregate from the original 1826 "View from the Window at Le Gras" through about 2012. (I don't know the underlying assumptions or methodology, though.)

I also see a number of more recent predictions, including this one:

"InfoTrends’ 2014 Worldwide Image Capture Forecast estimates consumers will take 810 billion photos worldwide in 2014. This number will grow to 1 trillion photos in 2015 and 1.3 trillion photos by 2017."​

If all of this is true, it indicates that in the three years spanning 2014-2016 inclusive, photographers are expected to make another 3.11 trillion new photos, or almost the same number as were made in the entire first 186 years of photography's existence.

Now if you are the CEO of the single best-positioned company on the planet to take advantage of and benefit from this exponential explosion of the very marketplace you were originally created to serve, a convincing argument could be made that you should be immediately fired for seriously suggesting that the company abandon this amazing windfall market expansion in favor of bankrupting your stakeholders and retooling into a completely different business.

Forget about which technology actually produces the images. You already have (or early on had) total dominance over both. Your true core competency is all about creating images. And with the Internet the image producing and consuming marketplace has just exploded in your face into almost unfathomable levels of new demand.

And you decide to walk away from all that potential just to start printing cheap commercial blister packaging instead?

Seriously?

That would be like Thomas Edison losing interest in and deciding to walk away from light bulbs at the very moment the first national electrical grid was originally switched on...

Ken

 

[Patrick Robert James]

The idiots that ran Kodak should have lifted their heads up from eating the pile of sugar in front of them to look out the window and see the potential of the sugar cane fields that they owned.

 

[NJH]

No, you wouldn't be. Implicit in the question "So what exactly should Kodak have done?" is "in order to survive/thrive long term." That's what I and others who've posted responses intended our answers to address. However, "top business consultants" have no such intentions.

The huge corporate entities that hire "top business consultants" are seeking ways to accomplish two things. First, look good to "Wall Street." Second, make use of that "next-quarter potential/promise" to pump the stock price and maximize executive compensation packages. Nothing else matters. All assets and personnel are expendable in the pursuit of these two goals.

Anyone who really does know what Kodak should have done is forever condemned to being ignored by large corporations.

I work with a lot of big companies here, they are all obsessed with metrics and overly regular reporting of them up the management chain. I don't recall it being like that here in the past but it seems to have become pretty much the norm. I guess when people here in the UK moan about companies being run by accountants these days they mean business analysts and the various management consultancy firms that I personally see as nothing more than parasites on commerce in the western world.

 

[Prest_400]

I too have Fuji friends, and have seen that they are still doing R&D on film. Last time I saw one, he asked me to take a picture of him and then told me that I was holding a camera that contained a roll of experimental Fuji film due to debut soon.

PE

In 2015? Traditional still film that is not INSTAX? That is nice to hear, even if it is reescalation R&D to rationalise the film lines. Not much is spoken about Fuji's production installations for film and they are more flexible, but who knows how.

Kodak is making good rounds as a business case of what it has been (though I as student haven't worked with one yet). Hats off to the guys at Rochester holding onto B38 and keeping production rather sustainable given the circumstances and how film has proved to be really the core despite the numerous other ventures.

 

[RattyMouse]

Who is making billions of dollars from digital images today? Apple? Anyone else?

 

[AgX]

One european fotofinisher alone makes 1/2 billion revenue from digital images

 

[MattKing]

In 2014, Kodak Alaris Holdings Limited reported operating revenue of $1,056 Billion, and a loss before tax of $77 Million.

 

[Photo Engineer]

In 2015? Traditional still film that is not INSTAX? That is nice to hear, even if it is reescalation R&D to rationalise the film lines. Not much is spoken about Fuji's production installations for film and they are more flexible, but who knows how.

Kodak is making good rounds as a business case of what it has been (though I as student haven't worked with one yet). Hats off to the guys at Rochester holding onto B38 and keeping production rather sustainable given the circumstances and how film has proved to be really the core despite the numerous other ventures.

I didn't say this year. It was a few years ago.