Why Kodak failed while Fujifilm has thrived

January 19th, 2012 § 0 comments

There is a great article on The Economist contrasting the seemingly imminent death of Kodak with Fujifilm’s successful reboot. After 137 years of innovation and a long stretch where they enjoyed a near-monopoly in America’s consumer film market Kodak appears to be preparing for a1 has just filed Chapter 11 bankruptcy that few expect them to emerge from. Given the advent of digital cameras I doubt many people are surprised but I think it’s interesting that the Japanese equivalent, Fujifilm, has been able to successfully pivot away from a dying industry.

As the article points out this wasn’t some radical change that caught Kodak flat footed, rather it was a gradual and inevitable market shift that both firms saw coming. In 1979 a Kodak executive penned a report that did an amazingly accurate job of predicting the next 30 years in consumer photography.

It was also certainly not for want of trying. They built one of the first digital cameras in 1975 and tried to mine their deep knowledge of photo chemicals for alternative uses in the drug market. Many were impressed by the venture-capital arm they created as well. Ultimately, however, they were not aggressive enough and they moved too slowly. While Kodak dithered Fujifilm was able to shed its dead weight while it successfully leveraged it’s expertise into new consumer markets like cosmetics and establish a new monopoly in the LCD market by producing screens with wide viewing angles.

Surprisingly, Kodak acted like a stereotypical change-resistant Japanese firm, while Fujifilm acted like a flexible American one.2

In 50-100 years which stalwart companies will find themselves in the same predicament? Will Google fail to move away from search when AI’s are able to mine information better than humans? Will Apple find itself locked out of the emerging wetware computer market that moves computing from our hands into our heads? How will Toyota differentiate itself in Minority Report type world were nobody owns their own car and instead rely upon a nearly identical fleet of driver-less vehicles?

Obviously these scenarios are closer to science fiction than to business planning but I find the mental exercise intriguing.

  1. Looks like the filed for bankruptcy while I was writing this []
  2. From the aforementioned Economist article []

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