Kodak had evidently recognised the need for a transformational strategy by 1990. Since that time it has survived, but even its greatest supporters would surely not claim success. Explore the proposition that its transformation strategy was sound, but fundamentally compromised by incompetent implementation. Identify the key mistakes that it made.
What will be an ideal response?
In hindsight it seems that for too long Kodak senior management was relatively passive, continuing
believing the enterprise had more time to adopt and introduce new digital technologies. They feared
that too rapid a response would have catastrophic effects on the future prospects and profits of its
core imaging businesses, based on chemical technologies and expertise. Moreover, executive
succession to the most senior positions was entirely from within the company, using predictable and
time-serving principles. Thus although Kodak did develop and acquire relevant digital technologies,
for too long executives could not believe they would really supplant the proven technologies they
knew well and on which their successful careers were based. When finally they did accept the
inevitability that digital imaging would be the dominant future technology, Kodak’s main
competitors had advanced too far and were too fleet of foot for Kodak to keep up, much less
maintain its status as the dominant force in imaging. We will have to await the verdict of business
historians, but it would seem that probable that their conclusion was that its strategy of ‘wait and
see’, followed by incremental progression into the digital domain, was misguided. Further, when the
strategy did become transformative it was not implemented quickly or ruthlessly enough.
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