“Business Model Innovation Transforming Kodak’s Core Business”
Summary of Key Talks
It was an old and dying company. Everybody outside of the firm knew that this is the case. The company was in denial. The chairman was brought back after one year of retirement.
Looking at their ecosystem, they understood that their strength will be at the intersection of digital imaging, science and material science. They were already late to the market (2002-2003) so they needed to have a disruptive innovation.
Three guidelines:
1. involve a significant technology breakthrough
2. Utilize the supply chain advantage
3. An innovative business model that will have a different value proposition to the customer
They bought a few smaller companies with pieces of technology and know-how that they didn’t have, but still, there was a lot within Kodak. The whole move was based on what they really had. Also ended up firing 80% of the employees – the company was distributed in manufacturing places all over the world making films. Would say to the people in each factory – how many of you have digital cameras? About 50%... would say that the company has a problem – they manufacture films and they are not buying it… not their fault – this is what the market is like.
Kodak created in France a science park and many of the ex employees work there. In Japan – negotiated with the government to get help in shutting down the factory and crate in the same place a new digital factory. Did many of these things – and this is why the whole process was very smooth with not work stoppages. Antonio would also get many sad letters but everybody understood. And still it was a hard thing to do… They came up with 11 propositions, four already in the market place.
Examples:
1. Low cost production of printers
2. Usage of their supply chain capability for off-the-shelf semi-conductor parts to create a printer with a head that lasts for all the lifetime of the printer – the only ones that do that. The customer only needs to add ink.
3. A new business model – low cost all-in-one printer that can directly connect to the camera. Most of the business comes from digital, more than 60% outside of the US, more B2C than before – much more diversified and profit coming from a variety of products, not mostly film. They have different metrics for both sides of the company – the digital and old one that is mostly for creating cash and is practically going away. They had to find different people for the two businesses, even though some of the more successful people in the dyeing business may move to the new business but it’s hard.
Complacency goes a long way – not just top management. It is almost inevitable when you are very successful – family or a corporation. How to avoid it? People should be in significant jobs for a relatively short amount of time.
Kodak used to be a very hierarchical company and may still be but there is also a culture of debates – they are open to ideas not neutral about them and this happens at all levels. | 
