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Trailblazer Kodak just too slow for the digital revolution
January 20, 2012, Friday
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When it comes to innovation and transformation, time really matters. It's always the early birds that get the fattest worms. But the case of Eastman Kodak Co's filing for bankruptcy yesterday illustrates well how a slow move can lead to a terrible collapse.
The 130-year-old US photographic film pioneer, which invented Instamatic cameras, sought bankruptcy protection after it failed to catch up with rivals in modern technologies such as digital cameras and printers.
As one of the world's best-known companies, Kodak was part of people's memories even for many Chinese. The yellow-colored "Kodak" on the back of printed photos was once the symbol of quality.
However, the 20th century giant of the film industry didn't take strides until recently to reform its business model toward the digital era, making it difficult for the company to keep up with Canon and Sony.
Efforts to cut costs and promote inkjet printers were saddled by substantial pension obligations, inefficient management and some internal resistance to innovative ideas, which are the problems facing many old-fashioned conglomerates in today's fast-changing world.
Antonio Perez, chairman and chief executive officer of Kodak, said in August that the company was five years too late in revving up its shift to the digital age. A five-year period seems not too long in Kodak's history. But it was long enough to change everything in digital industries. Just remember we didn't have the iPhone five years ago, let alone the iPad and Android devices.
Snail's pace
Undoubtedly, Kodak was exceptional in research and development as it produced the globe's first digital camera in 1975 and now owns 11,000 digital patents. But it apparently lacks the determination and the ability to commercialize them.
Since the majority of capital and human resources were allocated to the traditional film business, Kodak didn't have much flexibility to make a swift reshuffle, although it had seen the urgency.
The unprecedented difficulties in the overhaul have put great pressure on Kodak's top executives. Take Kodak China for example. Since 2009, the company has replaced its president four times while reforms toward digital were proceeding at a snail's pace.
The lesson to be drawn from Kodak's tumble is: never stop pressing ahead with innovation and always strive to link it with commercial use.
Even if you are No. 1 in your industry, the whole sector can still lose out to emerging technologies.
Nowadays, even digital cameras face growing challenges from smartphones and tablet computers. Phone makers are competing to launch electronic devices, which feature advanced photographic functions. They are especially appealing to young buyers, who tend to take photos and upload them instantly online via Twitter or Weibo.
We've already seen the decline of Motorola and Nokia as well as the rise of Apple, HTC and Samsung in the mobile industry. That clearly showed a company's dominance of an industry can be overturned quickly. Only technology innovation as well as supportive corporate strategies from the very beginning could lead to business prosperity.
There's no making without breaking. Companies reluctant to be among the first batch for reform and innovation will ultimately pay the price.
So, one must always be ready for the next technology revolution.
The 130-year-old US photographic film pioneer, which invented Instamatic cameras, sought bankruptcy protection after it failed to catch up with rivals in modern technologies such as digital cameras and printers.
As one of the world's best-known companies, Kodak was part of people's memories even for many Chinese. The yellow-colored "Kodak" on the back of printed photos was once the symbol of quality.
However, the 20th century giant of the film industry didn't take strides until recently to reform its business model toward the digital era, making it difficult for the company to keep up with Canon and Sony.
Efforts to cut costs and promote inkjet printers were saddled by substantial pension obligations, inefficient management and some internal resistance to innovative ideas, which are the problems facing many old-fashioned conglomerates in today's fast-changing world.
Antonio Perez, chairman and chief executive officer of Kodak, said in August that the company was five years too late in revving up its shift to the digital age. A five-year period seems not too long in Kodak's history. But it was long enough to change everything in digital industries. Just remember we didn't have the iPhone five years ago, let alone the iPad and Android devices.
Snail's pace
Undoubtedly, Kodak was exceptional in research and development as it produced the globe's first digital camera in 1975 and now owns 11,000 digital patents. But it apparently lacks the determination and the ability to commercialize them.
Since the majority of capital and human resources were allocated to the traditional film business, Kodak didn't have much flexibility to make a swift reshuffle, although it had seen the urgency.
The unprecedented difficulties in the overhaul have put great pressure on Kodak's top executives. Take Kodak China for example. Since 2009, the company has replaced its president four times while reforms toward digital were proceeding at a snail's pace.
The lesson to be drawn from Kodak's tumble is: never stop pressing ahead with innovation and always strive to link it with commercial use.
Even if you are No. 1 in your industry, the whole sector can still lose out to emerging technologies.
Nowadays, even digital cameras face growing challenges from smartphones and tablet computers. Phone makers are competing to launch electronic devices, which feature advanced photographic functions. They are especially appealing to young buyers, who tend to take photos and upload them instantly online via Twitter or Weibo.
We've already seen the decline of Motorola and Nokia as well as the rise of Apple, HTC and Samsung in the mobile industry. That clearly showed a company's dominance of an industry can be overturned quickly. Only technology innovation as well as supportive corporate strategies from the very beginning could lead to business prosperity.
There's no making without breaking. Companies reluctant to be among the first batch for reform and innovation will ultimately pay the price.
So, one must always be ready for the next technology revolution.
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