Kodak developed digital camera technology as early as 1976, and applied digital imaging technology to the aerospace field; Kodak had a 1.3 megapixel digital camera in 1991. But by 2, Kodak's digital products only sold for $3 billion, accounting for only 22% of its total revenue; In 22, the digitization rate of Kodak's products was only about 25%. In 2-23, the sales profit report of Kodak's departments showed a sharp decline, especially in the imaging department, although the sales performance of Kodak's departments from 2 to 23 only fluctuated slightly. Specifically, the sales profit of Kodak's traditional imaging department dropped sharply from $14.3 billion in 2 to $4.18 billion in 23, a drop of 71%! After taking photos from the "film age" to the "digital age", the glory of the former image kingdom seems to disappear with the fall of film. There are various reasons for the Kodak crisis: First, Kodak has long relied on the relatively backward traditional film department, but has been slow to respond to the impact of digital technology on the traditional imaging department. Secondly, the management style is conservative, satisfied with the market share and monopoly position of traditional film products, lacking forward-looking analysis of the market, failing to adjust the company's business strategic focus and departmental structure in time, making indecisive decisions and missing opportunities.
The investment direction is single, and it is difficult for the ship to turn around.
Due to the improper grasp of the transition and switching timing between the actual profits brought by the existing technology and the future profits brought by the new technology, Kodak has spent a lot of money on the low-level simple repeated investment in the production line and equipment of the traditional film factory, which has crowded out the investment in digital technology and market, increased the exit/update cost, and put the company in a dilemma of "it is difficult to correct the mistakes" and "it is difficult for the ship to turn around". According to statistics, by the end of 22, the number of Kodak color printing shops in China reached more than 8,, 1 times that of KFC and 18 times that of McDonald's! These stores are becoming the burden of Kodak's strategic transformation without providing enough profits.
decision-makers are obsessed with existing advantages
In the past, Kodak's management was from traditional industries, for example, Charles Barrentine, the current vice president of operation system, studied chemistry, and Cohen, the general manager of digital imaging system in the United States, studied civil engineering. Among the current 49 senior managers, 7 are from chemistry, while only 3 are from electronics. Especially in the aspect of market application and maintaining the leading position, traditional industry leaders neglected the sustainable development of alternative technologies, thus losing their due leadership share in the new product market.
From the comparison of the market share of traditional film and digital imaging products, we can see that Kodak is attached to traditional film technology and products, and is slow to respond to the impact of digital technology and digital imaging products, which largely determines the inevitability of Kodak falling into a growth crisis.
Short-sighted strategic alliance
From the perspective of market competition, the relationship between technical competition and cooperation in Kodak's business strategy is dominated by short-term market behavior, and the strategic positioning and strategic roles of competitors and partners are vague.
The competition in the technology market is fierce, the lead period of electronic technology is shortened, the market segments are increasing, and international competitors are increasing. In the fields of digital cameras, camera phones, digital printing and digital printers, it encounters fierce competition from big companies such as Fuji, Sony, Hewlett-Packard, Canon and Epson. Although Kodak has also established a large number of strategic alliances with its rivals, there are few strategic alliances formed in terms of core technologies, most of which are service project alliances. The weapon of the country can't be given to others. In fact, the management should be soberly aware that Kodak used to rely on film as the boss, and it also relied on this Jin Gangzuan to cooperate with others, and others will still be touched by your light. In the digital age, without core technology, the operation of enterprises will be in a dangerous state at any time, and everything in the past will depreciate in an instant. Cooperation is never wishful thinking. Despite the struggle, Kodak still reached this point-on January 19th, 212, it filed for bankruptcy protection in new york according to Chapter XI of the United States Bankruptcy Law. Founded in 188, the world's largest producer and supplier of video products and related services has to face a cruel ending because it can't keep up with the pace in the tide of the digital age.
Previously, Kodak's average closing price had been below $1 for 3 consecutive trading days, which did not meet the listing requirements of NYSE. Eastman Kodak Company, headquartered in Rochester, New York, announced in early January that it had received a warning from the new york Stock Exchange that it might withdraw from the market if its share price could not rise in the next six months.
in p>211, Kodak was rumored to be bankrupt several times. In that year, its share price fell by more than 8%, and the latest price was USD .66. This is the latest blow to Kodak, which is selling its assets to survive. Kodak said that because the company is facing liquidity challenges, there is no guarantee that it can meet the listing standards of the NYSE within the next six months.
According to the application documents submitted by Kodak, Kodak's existing assets are US$ 5.1 billion, but its debts have reached US$ 6.8 billion, which is in a state of serious insolvency.
"The members of the board of directors and the whole management unanimously believe that this is a necessary step and the right step for Kodak's future." Antonio M. Perez, chairman and CEO, said in a statement. He also said that filing for bankruptcy protection will enable Kodak to maximize the value of its assets, including licensing patents such as digital imaging to mobile phone and other equipment manufacturers.
Kodak said that it and its American subsidiaries have applied to a bankruptcy court in the United States for business restructuring in accordance with Chapter 11 of the Bankruptcy Law. Subsidiaries outside the United States are not included in the application scope. Kodak said that this move will strengthen the liquidity of its US and overseas assets, commercialize non-strategic intellectual property rights, properly solve the problem of legacy liabilities, and focus on the most valuable business.
in addition, Kodak has obtained a loan of 95 million dollars from Citigroup for bankruptcy protection enterprises, with a loan period of 18 months, which is used to improve liquidity and working capital. The loan amount also needs to be approved by the court and there are some preconditions. The company believes that during the bankruptcy period, the company has enough liquidity to maintain its operations and will continue to provide products and services to consumers.
Kodak is expected to continue to pay employees' salaries and benefits, and maintain customers' services. Kodak's overseas subsidiaries are not bound by the bankruptcy protection clause and are obliged to pay all outstanding debts to suppliers. Kodak and its subsidiaries in the United States promise to pay all debts owed to suppliers after bankruptcy. In view of the above problems and the reflection of the capital market, Kodak announced on September 26, 23 that it had implemented a major strategic shift: abandoning the traditional film business and shifting its focus to emerging digital products.
1. Increase investment in non-imaging business by "adapting to changes".
2. No longer make any significant long-term investment in the traditional film business.
3. the company was reorganized, and the original film imaging department, medical imaging department and commercial imaging department were reorganized into five digital technology departments: commercial imaging, commercial printing, medical imaging, digital and film imaging systems, imaging and parts.
4. Introduce a series of digital cameras and inkjet printers to consumers, and compete with Fuji, Hewlett-Packard, Xerox, Canon and Epson in the digital business field.
5. Insist on its film franchise business and actively carry out private brand film business, for example, films will be sold abroad under non-Kodak brand trademarks.
6. form a comprehensive solution for consumers to stay indoors through cross-industry alliance, that is, the following industrial chain, including: digital camera (Kodak or non-Kodak brand)-FedEx delivery-chain printing shop output; MMS (photography) mobile phone-network transmission-chain print shop output-FedEx delivery-customers.
7. In the China market, both traditional business and digital business should be taken into account, and a Kodak global production center should be built, whose main business is to assemble core models of digital cameras, and at the same time, local production of parts and components and digital printing should be started; Kodak's traditional civil imaging business department continues to expand the market share of the central and western regions and secondary cities, and realizes the strategic transformation from "imaging" to "imaging+retail service". 8. Realize the strategic planning of "double T" (comprehensive solution and comprehensive satisfaction) and "double E" (extension and expansion) and strengthen the terminal output. Following the introduction of the transformation strategy in September, Kodak CFO Brewster announced the main points of Kodak's new strategy at the Western New York Investor Conference, including:
1. Reorganize traditional business management to expand cash income;
2. accelerate the development of the company's existing digital image products and services;
3. Strictly focused acquisitions make up for the shortcomings of existing businesses and accelerate the entry into the closely related image market;
4. explore long-term growth opportunities in fields such as electronic display and inkjet printing. In the year after the transformation, Kodak launched a series of activities: acquiring Algotec Systems Company and SCITEX Digital Printing Company, establishing a strategic cooperative relationship with VERIZON WIRELESS, completing the merger of NEXPRESS and HEIDELBERG Company, purchasing image sensor business from American National Semiconductor, purchasing OREX Company, selling AUNTMINNIE business, and purchasing CREO Company.
A Kodak spokesman said: "This is what Kodak must do to face the reality-from the traditional image business to the digital business." At the same time, in the management arrangement, Kodak has carried out personnel replacement in full swing. Kodak's board of directors also expects him to "continue his legend in developing digital products and organizational management". Kodak hopes that this new strategic transformation will lead to more diversified business, and expects that this new strategy will make the company grow at a rate of 5% ~ 6% every year. The annual income may reach $16 billion before 26 and is expected to reach $2 billion before 21. In fact, Kodak successfully developed digital photography technology as early as 1976, but it has been stumbling on digital images. First of all, Kodak's huge investment and global presence in the traditional film market has become a huge burden for the company to turn to the digital market. Moreover, Kodak's management did not take transformation as the company's core strategy in the middle and late 199s. George Fisher, the former CEO of the company, once declared that Kodak would achieve the same sales volume of traditional business and digital business in 1997. But the fact is that the company's management is more immersed in the creation of existing advantages and profits in the traditional film market, and even thinks that promoting digital cameras and other products will hurt its traditional business. After Kodak decided to enter the digital market, some shareholders still criticized that Daniel Carp, CEO of Kodak at that time, was betting on the digital strategy with Kodak.
in the battle for the traditional film market, Kodak's competitive advantage is more reflected in the market strategy and business model, and the development of related alternative technologies is often put in a secondary position. However, in the digital image market under the IT background, the competition of key technologies becomes more intense. Kodak focused on the traditional film market in the middle and late 199s, and its technological leading edge in the field of digital imaging was almost lost. Kodak's traditional marketing channels, such as the renovation of printing shops all over the streets, also need a process. In this way, Kodak's brand will undoubtedly become the entry point and engine of its strategic integration. When Kodak entered digital imaging in 1997, it faced the problem of brand promotion-Kodak needed to use a strong brand of film and photo processing to promote its products in the digital camera and digital imaging market. Mike Lotti, head of the business research department of Kodak Company, believes that "Kodak hopes to maximize its existing marketing investment and brand awareness to promote the sales of its new products. Kodak knows from past experience that marketing investment in certain products will have a positive impact on other products. " Consumers' trust and satisfaction with Kodak's existing products and services will enhance consumers' recognition of Kodak's new products and services. For Kodak in the past, the advertising investment in cameras also promoted the sales of its traditional film. For Kodak today, what it needs to do is to turn its past marketing efforts and investment into the driving force for its digital product sales.
"The pressure comes from maximizing the' productivity' of marketing. Kodak needs some measures to make our marketing more productive, "Tim Ambler, a senior researcher at London Business School, added." Is marketing just advertising, promotion and a little market research? Harvesting the benefits brought by successful marketing investment in the past is also an indispensable part of marketing. "
Kodak's past brand investment has made its name a household name. Kodak's own research results prove this point, and many intermediary agencies' surveys also confirm Kodak's brand value. In the era when Kodak began to promote brand-new products, what benefits will Kodak's brand value bring to it? Transformation is not only a necessity for Kodak, but also shows that it was left behind by competitors in time from the beginning. In this environment, brand may be one of Kodak's few competitive advantages compared with other manufacturers. Of course, Kodak needs to do more in its marketing to transfer consumers' recognition of Kodak brand from film to digital products.
brand aging is one of the most direct problems Kodak faces in its marketing. Brand is basically the concentrated expression of consumers' consumption demand and consciousness in a certain market product. When the demand of consumers gradually shifted from traditional film images to digital images, the market carrier of Kodak brand became weaker and the brand began to age. In order to show the management's determination to redefine the Kodak brand, Kodak changed its brand logo that has been used for 36 years at the beginning of the year. In the new Kodak logo, Kodak letters jump out of the traditional yellow box. Kodak's new brand logo shows streamlined design and prominent letters, symbolizing a brand-new, cross-industry leader who focuses on digital imaging.
the change of logo is only one step of Kodak's brand strategy adjustment. Brian Collins of Ogilvy, the company's marketing partner, confirmed that Ogilvy's Brand Integration Group has started to help Kodak reposition its brand's consumer identity strategy and visual effects, and Kodak's new company logo is only a small part of Ogilvy's team's work. Carl Gustin, Marketing Director of Kodak Company, publicly called on Kodak Company to go faster on the road of brand strategy transformation: "We are doing our best to update our guidelines, policies and practices, but there is still more work to be done in the transformation of brand strategy. We launched a new company logo at this time to show that it is time for action. "
Carl Gustin's appeal is consistent with most views in the market.