Kodak’s Strategies in the 1990s and the early 2000s

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Table of Contents

Strategies Used in the 1990s
Strategies Employed in the 2000s
Strategy Evaluation
Alternative Strategies

Strategies Used in the 1990s

Kodak’s digital imaging strategy of the 1990s was aimed at a gradual transition from making products for traditional photography to a digital photo market. In 1990, the company launched a Photo CD system focused on storing photos. In the following year, Kodak introduced its first digital camera. In 1994, the company’s CEO stated that the firm was in the business not for photography but for pictures. Kodak introduced many innovative services and devices in the photography market, such as products for image sensors and scanners.

When George Fisher became the CEO, he concentrated the company’s activity on pursuing the digital strategy in the market since it was becoming popular in the 1990s. Fisher was a professional manager and a scientist, and he had some experience of successful product development. Fisher wanted to divest those of Kodak’s businesses that were not related to imaging. Simultaneously, he focused on the development of a single digital imaging division that became the core of the company. The following CEOs kept the strategy initiated by Fisher and managed to transform Kodak from a company famous for its traditional photography and related products to a digital photography firm.

Strategies Employed in the 2000s

In 2001, Kodak launched its own software system called EasyShare, the purpose of which was to provide customers with new features of digital experience. Due to this system, consumers were enabled to take photos and view them on different devices, as well as print them conveniently. By 2005, all Kodak’s cameras were included in the system. The EasyShare software system made Kodak’s products more competitive in the market in comparison with digital cameras and other devices of various rivals. In addition to the photo market, Kodak continued its activities in healthcare, commercial, and other spheres.

In the early 2000s, a general strategy of digitalization continued, and Kodak remained the leader in the US market in the production of digital cameras. During the same period, the company was behind Canon and Sony in the global digital camera market. However, Kodak was the leader in the production of megapixel image sensors, which allowed running numerous retail printing kiosks and digital minilabs successfully. Kodak applied various strategies for the consumer and commercial markets. The company benefited from external sourcing of knowledge and experience through making alliances and acquisitions, as well as hiring professionals.

In addition to the mentioned strategies, Kodak succeeded in the market because of a gradual and relatively slow transformation from the traditional to the digital market for photography. Since both traditional and innovative products were offered by Kodak, it became accessible for customers to change their photo preferences gradually. Still, despite being a leader in several markets, Kodak demonstrated an exacerbating financial situation and faced a decline in production volumes. For instance, in 1991, it was the 18^th among the US firms by revenues, and in 2011 – only 334^th. The number of employees fell from 133,200 to 17,100, and the company experienced considerable operating losses during the early 2000s.

Strategy Evaluation

Transformation to the Digital Photo Market

Kodak’s strategies related to digital imaging may be evaluated as mostly positive ones. In the 1990s, a transformation from traditional printed photographs to digital ones occurred, and Kodak succeeded in this change by modifying its business processes and diversifying the product assortment. Kodak was among the leaders of the photography market because it introduced new products regularly, applying the latest technologies to develop them, and made a focus on the photo business in priority to all other businesses of the company.

Kodak conducted strategic alliances and partnerships, which made it possible to exploit the experience and knowledge of the professionals from other companies to create innovative and competitive products of high quality. One more strategy of Kodak that contributed to its success was that all transformations of products were conducted gradually. Due to that, customers were able to shift to new products together with the market. At the same time, they still could use traditional products for making and printing photos if the latter were more convenient for them.

Accessibility to Customers

One more positive aspect of Kodak’s strategy was that its products and services were based on simplicity of use. In the market for businesses, Kodak used different strategies in comparison with the market for consumers. For businesses, solutions were professional and innovative, and it was a positive decision. For consumers, photo cameras and other products had high quality, but at the same time, they were very easy to use.

Due to the accessibility and customer focus, Kodak easily became a leader in the market for consumer photography. People usually want to buy things that are convenient to use and easy to learn. In addition to the mentioned benefits, Kodak applied a systems approach to its products and services, which turned out to be positive. The strategy presupposed that all products, software, and related services were integrated with each other. Due to that, consumers did not need to study complicated instructions or integrate various devices and software by themselves.

Presence in Different Markets and Spheres

Finally, the strategies applied by Kodak may be evaluated positively due to the company’s attempts to be represented in different markets and spheres. It was active in the market for digital and printed photography, markets related to electronics, as well as healthcare and other spheres. Because of that, Kodak succeeded in being among the market leaders until the end of the 2000s. However, gradually, its performance lowered in comparison with other firms, such as Fujifilm.

Alternative Strategies

A focus on the Digital Photo Market

The main reason for the deterioration of Kodak’s position in the market was growing competition. It is obvious that Fujifilm is a good example of a competitor that used similar strategies in the 1990s, but in the 2000s, it succeeded in outperforming Kodak due to differences in strategies. Thus, an alternative strategy for Kodak to apply was to improve its focus on the digital photo market and produce more goods and services related to that market. For instance, due to the rapid development of various electronic devices, other companies were in a more favorable position compared to Kodak due to innovations and a wider choice of devices. Thus, it would have been beneficial for Kodak to create more appliances as well and benefit from digitalization.

Refusal from Other Markets

Another alternative strategy that would have saved Kodak in the 2000s was to refuse from markets not related to the digital and photospheres, such as the market related to medical services. The focus on diversification may be positive for companies because they may benefit from each market. However, under the pressure of powerful competition in the digital photo market, it would have been better for Kodak to exit the market where its revenues were not significant. With such a strategy, the company could focus on a single branch and spend more funds on research and development. Under such circumstances, its products and related services could have been more innovative and competitive.

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