QUESTION 1 (25) Case Study - How Kodak Failed There are few corporate blunders as staggering as Kodak’s missed opportuni

[answerhappygod]

QUESTION 1 (25) Case Study - How Kodak Failed
There are few corporate blunders as staggering as Kodak’s missed
opportunities in digital photography, a technology that it
invented. This strategic failure was the direct cause of Kodak’s
decades-long decline into bankruptcy as digital photography
destroyed its film-based business model. Kodak’s failure offers
stark lessons for how other organizations grappling with disruptive
technologies might avoid their own Kodak moments. Kodak
management’s inability to see digital photography as a disruptive
technology, even as its researchers extended the boundaries of the
technology, would continue for decades. As late as 2007, as
illustrated by the following Kodak marketing video, Kodak
management felt the need to trumpet that “Kodak is back “and that
Kodak “wasn’t going to play catch-up anymore” with digital. It was
1981 and Sony had just introduced the first electronic camera. One
of Kodak’s largest retailer photo finishers asked Barabba, who was
Kodak’s head of market intelligence at that time, whether they
should be concerned about digital photography. With the support of
Kodak’s CEO, Barabba conducted a very extensive research effort
that looked at the core technologies and likely adoption curves of
traditional, silver halide film versus digital photography. The
results of the study produced both “bad” and “good” news. The “bad”
news was that digital photography had the potential capability to
replace Kodak’s established film based business. The “good” news
was that Kodak had roughly ten years to prepare for the transition.
The study’s projections were based on numerous factors, including:
the cost of digital photography equipment; the quality of images
and prints; and the interoperability of various components, such as
cameras, displays, and printers. All pointed to the conclusion that
adoption of digital photography would be minimal and
nonthreatening—for a time. History proved the study’s conclusions
to be remarkably accurate, both in the short and long term. The
problem is that, during its 10-year window of opportunity, Kodak
did little to prepare for the later disruption. In fact, Kodak made
exactly the mistake that George Eastman, its founder, avoided twice
before, when he gave up a profitable dry-plate business to move to
film and when he invested in color film even though it was
demonstrably inferior to black and white film (which Kodak
dominated). Barabba left Kodak in 1985 but remained close to its
senior management. He got a close look at the fact that, rather
than prepare for the time when digital photography would replace
film, as Eastman had with prior disruptive technologies, Kodak
choose to use digital technology to prop up its film, chemical and
paper businesses. This strategy continued even though, in 1986,
Kodak’s research labs developed the first mega-pixel camera. This
was one of the milestones that Barabba’s study had forecasted as a
tipping point in terms of the viability of standalone digital
photography. The choice to use digital technology to support,
rather than replace, the film business culminated in the 1996
introduction of the Advantix Preview film and camera system. Kodak
spent more than $500M to develop and launch Advantix. One of its
key features was that it allowed users to preview their shots and
indicate how many prints they wanted. The Advantix Preview could do
that because it was a digital camera. Yet Advantix still required
film and emphasized printing because Kodak was in the photo film,
chemical and paper business. Advantix flopped. Why buy a digital
camera and still pay for film and prints? Kodak wrote off almost
the entire cost of development. In 1988, Kodak bought Sterling Drug
for $5.1B, deciding that it was really a chemical business, with a
part of that business being a photography company. Kodak soon
learned that chemically treated photo paper isn’t really all that
similar to hormonal agents and cardiovascular drugs, and it sold
Sterling in pieces, for about half of the original purchase price.
In 1989, the Kodak board of directors had a chance to take make a
course change when Colby Chandler, the CEO, retired. The choices
came down to Phil Samper and Kay R. Whitmore. Whitmore represented
the traditional film business, where he had moved up the rank for
three decades. Samper had a deep appreciation for digital
technology. The board chose Whitmore. As the New York Times
reported at the time: Mr. Whitmore said he would make sure Kodak
stayed closer to its core businesses in film and photographic
chemicals. Samper resigned and would demonstrate his grasp of the
digital world in later roles as president of Sun Microsystems and
then CEO of Cray Research. Whitmore lasted a little more than three
years, before the board fired him in 1993. For more than another
decade, a series of new Kodak CEOs would bemoan his predecessor’s
failure to transform the organization to digital, declare his own
intention to do so, and proceed to fail at the transition, as well.
George Fisher, who was lured from his position as CEO of Motorola
to succeed Whitmore in 1993, captured the core issue when he told
the New York Times: Kodak regarded digital photography as the
enemy, an evil juggernaut that would kill the chemical-based film
and paper business that fueled Kodak’s sales and profits for
decades. Fisher oversaw the flop of Advantix and was gone by 1999.
Almost to the bitter end, Kodak management would not come to grips
with the disruptive danger of digital photography. In the early
2000s, Kodak's CEO described the company's worst-case scenario as
mere single-digit growth in revenue and profit. As history proved,
however, the worst-case scenario was much worse. If Kodak had
accepted doomsday as a real possibility, it would have been able to
act faster and might have remained a success. Fuji Film, for
instance, decided to milk the traditional business for cash, rather
than, like Kodak, keep investing. Fuji then invested the cash in a
wide array of other businesses, a couple of which have really paid
off. Instead, as the 2007 Kodak video acknowledges, Kodak’s
approach did not change. By 2007, Kodak’s prospects seem reduced to
suing Apple and others for infringing on patents that it was never
able to turn into winning products. After struggling for years—it
reported only one full year of profit after 2004—Kodak filed for
bankruptcy in 2012. It emerged from bankruptcy a year later as a
mere shadow of its former greatness. Source:
https://www.linkedin.com/pulse/how-koda ... chunka-mui
QUESTION Using the 3S model as a framework explain how Kodak
could have used the three (3) levels(Strategic; Systemic and
Situational) to turn its business fortunes and sustainability
around.