Kodak – the DownfallEssay Preview: Kodak – the DownfallReport this essayKODAKTHE DOWNFALLAman Chawla | IBS | 06-08-18RATIONALEKodak. That venerable brand name has been a household word for generations worldwide. For more than a century, people relied on Kodak for products to help them capture “Kodak moments”- important personal and family events to be shared and recorded for posterity.
The Hollywood movie industry evolved around Kodak technology. In 1972, Paul Simon even had a number-two hit single called “Kodachrome,” a song that put into words the emotional role that Kodak products played in people’s lives.
In 2012, however, Kodak fell into bankruptcy. Today, the brand that once monopolized the consumer photography industry, capturing 85 percent of all camera sales and 90 percent of a huge film market, doesn’t even sell consumer cameras and film anymore. Once amongst the bluest of blue chips and rolling in cash, a completely transformed Kodak now struggles with declining sales and years-after-years losses. Of the roughly 200 buildings that once stood on the Kodak’s sprawling business park in Rochester, New York, 109 have been demolished or sold off.
Ho could such a storied brand as mighty in its day as Apple or Microsoft today fall so far so fast?Kodak dell victim to marketing and competitor myopia – focusing on narrow set of current products and competitors rather than on underlying on customer needs and emerging market dynamics. It wasn’t competing film makers that brought Kodak down. It was the competitor Kodak didn’t see soon enough – digital photography and cameras that used no film at all. All along Kodak continued to make the very best film. But in an increasingly digital world, customers no longer need film. Clinging to its legacy products, Kodak lagged behind competitors in making the shift to digital.
In 1880, George Eastman founded Kodak based on a method for dry-plate photography. In 1888, he introduced the Kodak cameras, which used glass plates to capture images. Looking to expand the market, Eastman next developed film and the innovative little Kodak Brownie film camera. He sold the camera for only $1 but reaped massive profits from the sale of film, along with the chemicals and the paper required to produce photographs. Although Kodak also developed innovative technologies for industries ranging from health care to publishing, throughout the twentieth century, cameras and file remained the company’s massive cash cow.
Films and camer photo brownie camer photoInterestingly, way back in 1975, Kodak engineers invented the first digital camera – a toaster sized image sensor that captured rough hues of black and white. However, failing to recognize the mass-market potential of digital photography and fearing that digital technology would cannibalize its precious film business, Kodak shelved the digital project. Company managers simply could not envision a filmless world. So, Kodak held fast to film and focused its innovation and competitive energies on making better film and out-innovating other film producers. When the company later realized its mistake, it was too late.
First digital camera phot and its makersBlinded by its film fixation, Kodak failed to see emerging competitive trends associated with capturing and sharing images. Kodak’s culture became bound up in its history and the nostalgia that accompanied it. “They were a company stuck in time.” “Their history was so important to them-this rich century-old history when they made a lot of amazing things and a lot of money along the way. Then their history became a liability.”
By the time Kodak finally introduced a line of pocket-sized digital cameras in the late 1990s, the market was already crowded with digital products from Sony, Cannon, Nikon, Samsung, and a dozen other camera makers. That was soon followed by a completely new category of competitors, as more and more people began pointing and clicking in their phone and other mobile devices and sharing photos instantly via texting, email and online photo sharing social networks. Late to the digital game, Kodak became a relic of the past and an also-ran to a host of new-age digital competitors that hadn’t even existed a decade or two earlier.
Competator camera photsSomewhere along the way, swelled with success, once-mighty Kodak lost sight of founder George Eastman’s visionary knack for defining customer needs and competitor dynamics. According to one biographer, Eastman’s legacy was not film; it was innovation. “George Eastman never looked back. He always looked forward to doing something better than what he had done, even if he had the best on the market at the time.” If it had retained Eastman’s philosophy, Kodak might well have been the market leader I digital technologies. We might all still be capturing “Kodak Moments” on Kodak digital cameras and smartphones and sharing them on social media and Kodak-run online sites.
So, we have chosen as case study to help us know how Kodak from being the number one company in its sector is now trying to emerge from bankruptcy. It has stopped making cameras and discontinued its famous Kodachrome color film. Instead, it now licenses its name to other manufactures that will make cameras under the Kodak brand. Almost all of its revenues now come from commercial imaging and printing products and services or business customers in graphics arts, commercial print, publishing packaging, electronic displays and entertainment and commercial films.
To summarise it all we chose Kodak as our case study to show how an organization that had been fortunate over a century with a dominant position in the market, led to briskly misfortune and bankruptcy within short span of time. The entire case study emphasizes the stunning bankruptcy of Kodak. The gloomy journey of market giant, that had a lion’s share of imaging world industry and that had positioned the name of photography to its recognition “Kodaking”, has been over to ouster from the market. The general purpose of the research is to analyse the financial position of a company by applying financial analysis tools and check the consistency of results. The specific purpose of the research is to conclude the critical issues that have caused organization downfall by evidential support. Data collection has been made in this study on empirical basis and by the use of company annual reports, results & conclusions have been drawn. The prior segment of report shows the financial results
The Case study of Kodak’s financial situation
Kodak’s financial history is a record for a company that has undergone some major restructuring and its shares are declining.
The company’s shareholders were the largest holders of Kodak’s shares and it has had a huge market share in the digital photography. Moreover, Kodak’s customers (including its digital cinematographers and print presses) were valued as investors by the end of 2014 and they are now getting very few media and film related rewards from the new company and its companies are at an all time high of 30 billion yen (YG). Kodak is in the most competitive position of any company in the world. However, it has had a short period of a stable record in the market for technology and have suffered from some big problems because of the heavy negative press and due to the sudden closure of large operations in 2014. The recent history of Kodak is also a lesson to its investors
Kodak’s financial situation
Although Kodak’s record has been bad for a while in the market, it has not fallen apart, but is holding fast to its share price which has been in an economic weakness since the beginning of 2016, and has been falling steadily after a period of solid growth thanks to a good quarter which resulted from the successful merger of Kodak with Samsung
Kodak stock has been falling in various economic indicators, such as labour and property investment due to the merger of Kodak with Samsung and a strengthening of the yen, but also in other metrics related to quality of service and quality of investment with financial advisors and other professional advisors. Despite the fact that some of those indicators have been negative, it is now able to hold on to its share price but now has to pay close to 50% interest to the fund on the dividends
Kodak does have a bit of a difficult time because its stock market and the fact that Samsung’s earnings and profit are not well enough to carry on with due to loss of more than 30 million yen (YG) due to weak outlook of the company to investors, has forced it to buy out its shares in a tough period in the light of strong and growing financial conditions in the market, and the price fluctuations and the price fluctuations of the other major media brands are leading to low dividend for the company
It has been some time since the company entered the market, it was worth looking into all of its operations and in other categories with the help of several experts such as Akshay Goyal and Akshayan Goyal. However, Kodak’s CEO, A.K. Sinha, has never had good experience in an industry of so much liquidity and risk, so the fact that he has never had a good experience at a company such as Kodak, is an indication that he is not qualified to be CEO or CEO of a major media company like Samsung.
The facts of the issue can be seen in this graph:
http://www.npr.org/blogs/post-credit/2015/07/10/kodak-voweth-to-fail-to-coup-due-crisis-that-has-been-causing-an-economic-weakness-since-2016-with-samsung/
The situation that is taking place in this market is of great concern to Kodak shareholders, as it has long been an issue of a very high level and the fact that Samsung has now become the dominant brand in the market in terms of media and film has led to the huge loss of its share price and the number of its outstanding shares is decreasing. Kodak’s future is uncertain if there is any future for the company as all companies are not viable in this financial situation at this time and there is much more need to be done for its security.
However, this time we are looking for a company that can show a way to cope financially