How did Kodak lose its way, despite being keenly aware for decades of the threat posed by digital—and how did Fuji reinvent itself in the midst of the revolution?
Kodak had accounted for about 85% of camera sales and 90% of film sales in the United States in the 1970s. Sales of its cash cow—photographic film—rose steadily through the late 1990s and into the early 2000s. While Kodak embraced the new digital revolution on the horizon by the late 1990s, regularly releasing new and improved cameras, it was challenged to produce and sell the new cameras at a profit. Key to Kodak’s strategy, during these disruptive times, was its belief that consumers would continue to pay for Kodak prints—albeit shot on digital cameras—a strategy ultimately doomed for failure as consumer needs and wants adjusted to a new digital age. These strategic blunders, amongst others, led to what some viewed as one of the most spectacular corporate declines ever seen. Although buffeted by the same challenges and disruptions during these decades, Fuji, Kodak’s fierce rival in the film business, navigated the digital revolution with significantly more success by building on its traditional expertise in imaging while also launching successful products across a variety of industries and sectors, and using an aggressive M&A strategy to expand into new markets. This case asks students to analyze the different strategic paths Kodak and Fuji took—and to consider what role each company’s management, board, and culture played in determining the organization’s future fortunes.
Case ID: 200305