Hey guys, hope you are doing well. In this post, I am going to share another interesting case study of “How did kodak failed?“. After all, we know it was the first cameras suitable for non-expert use.Kodak was the first who gave the camera from professional studios to the hand of general people. In 1885 George Eastman bought David Houston’s patents for roll film and developed them further.A generation ago, a “Kodak moment” meant something that was worth saving and enjoyment.Kodak manufactured the only camera, kodak films and kodak photo paper.The kodak was not charged more margin on their cameras but they charged more margin on their films and photo papers.This is a razor and blade syndrome strategy means you get the camera at the very low price but with the camera, you have to need to purchase film that’s why They charged the more margin on films and less on camera.So guys let’s start…
REASONS WHY KODAK FAILED?
1)Missing the Opportunity OF First Mover Advantage-
As we discussed above they were the first who gave the camera from professional studios to amateur hands to take photos at everywhere.But slowly time was changed and there was a time for digital cameras because the cost of digital cameras was very low, digital cameras give the high-quality images and digital literacy and you will get shocked to hear that the first digital camera was invented by the steven Sasson in 1975, who was the engineer in kodak.But still, They were not taken the benefit of first-mover advantage.They were thought that the digital camera can’t be able to take place of picture cameras and people also do not accept it because digital picture never gives that type of feeling, which is given by printed pictures.
2) Fighting Against the Wrong Competitor-
Fighting against the wrong competition can kill your actual business.This mistake was the worst mistake of the kodak.Kodak had to be concentrate on digital cameras and replaced their technologies but kodak was busy in to compete with Fujifilm.Kodak never wants to change their technology because in digital cameras the margin shares were very low but in printing photos and films, kodak earns huge margins this is the real reason why kodak never wants to change themselves.They were too busy in fighting with the wrong competitor.
3)Self Praising Syndrome-
When you are too busy in convincing others about your own intelligence.All the management teams of kodak, media and feedbacks were regularly tried to convince kodak to shift to digital cameras technology but kodak ignored all of them because the reason is gross margin.As we discuss above the gross margin rate of films was very high but the gross margin rate of digital cameras was very low that’s why the kodak never wants to change them.