kodakthechallengeofconsumerdigitalcameras.docVIP

Kodak: The Challenge of Consumer Digital Cameras* In early 1997, George Fischer, the CEO of Eastman Kodak Corp., was pondering the future of the consumer imaging business: specifically, the role that the relatively new digital camera technology would play. Kodak had been a pioneer of this new technology in the late 70’s and 80’s, yet a decade of effort in the field had failed to result in profits for the company. Fischer was now under increasing pressure from the Board to cut costs and improve profitability. With competitors becoming more aggressive in its traditional film and paper businesses, and new powerful competitors emerging in the digital camera business – should digital cameras remain a part of Kodak’s strategy, and if so, how? Company History The Early Years In 1888, George Eastman revolutionized photography with the first Kodak camera – an invention that reinforced his commitment to bring photography into the hands of the greatest number of people at the lowest possible price. Eastman’s company introduced its first portable camera in 1888, which included a 100-picture film for $25. After shooting the film, the owner sent both the film and camera to Rochester for processing. For another $10, the company sent back the developed prints and the camera loaded with a new roll of film. This breakthrough is considered the birth of snapshot photography. At this time, Eastman trademarked the “Kodak” brand, and with the slogan You push the button - we do the rest, George Eastman put the first portable camera into the hands of consumers. This was the beginning of Kodak’s century-long history of mass marketing cameras and supplying the rest of the film, development, and photo-printing value chain. Eastman Kodak had four basic principles for the business - mass production at low cost, international distribution, extensive advertising, and a focus on the customer. Eastman saw all four principles as closely interrelated. From the beginning, he imbued