The main reason for the failure of the Kodak strategy is the erroneous desire to maintain the existing business model in a rapidly changing market. The analysis led the company to have the necessary time to form the consumer preferences it needs. The main reason for the failure is that Kodak sought to continue selling cameras, as the film brought a significant share of profits for the company (Grant, 2015). Consequently, the transition to innovative solutions in the field of digital photography was not taken seriously by the company. In this case, it can also be noted that the problem lies in the dilemma of innovation. The company failed to properly assess the opportunities and trends that the use of digital photography offers people, which are cheaper and better.
This aspect is also emphasized by the fact that Kodak stood strictly on its traditional and well-established business model, not perceiving analysts’ warnings. Another mistake is a number of incorrectly made decisions by the company’s management. They manifest themselves in the depletion of the financial capabilities of the company by acquiring small companies that could become a threat to it (Grant, 2015). The inability to stop the innovation process manually led to Kodak’s not having enough funds to switch to new technologies successfully. Thus, the company entered the market, where certain players had already established themselves with much more financial and technological capabilities.
The company has spent much time not developing a detailed survival plan in conditions when the film will no longer be relevant but on researching ways to use digital technologies to improve film cameras. Thus, the company spent a significant amount of funds on developing and launching the Advantix camera. It allowed digital photographs to be taken, but only in order to capture the image on film later. Consequently, Kodak completely ignored the experience of competitors growing through innovation while striving to maintain its aging business model.
Reference
Grant, R. M. (2015). Eastman Kodak’s quest for a digital future. Cases to Accompany Contemporary Strategy Analysis, 557–575.