Question

Pre-Fisher Era: Kodak’s investment in digital imaging R&D produced an array of products including the best digital sensor technology in the world. Yet the company decided to market only the Photo CD. Was this the right decision?  

Answer 1

Popular perception is that Kodak didn’t even enter the consumer digital tech business until the mid 1990s (with the release of the Kodak DC-25 compact digital), but that’s incorrect. In 1990, the company pushed out the “Photo CD” as the industry defining digital image medium. That was a bold move and the company invested millions to make it work, but it turned out to be a myopic decision. Kodak was trying to benchmark the quintessential photo storage medium, evidently not realizing that the digital revolution was obliterating artificial boundaries between “photo storage” and other sorts of data storage. Kodak, by sticking to its old school philosophy that the photo is king, failed to see that there would never be a sustainable market for what it wanted to sell.

The company also courted the professional photojournalism market with a $13,000 digital retrofit camera that used a Nikon film body--the Kodak DCS-100--but it was slow to transition into the consumer market and fell behind competitors (including Nikon) that were closer to making the technology affordable to nonprofessionals.

Kodak did eventually make more aggressive moves into the digital tech business. By this time, most of the old guard of the corporation was gone and Kodak was recruiting from companies like Lexmark to re-create its brand image as a digital leader. Kodak sought to become the master of digital printing and was forging headlong into the self-service digital printing kiosk business, among others.

The problem Kodak would face in all of these new ventures is that it was too late to own any facet of the market. Whether fighting for territory in the printer or digital camera markets, it was always perilously behind well established players. The investment required to ramp up in those markets generated a debt load that outpaced the company's ability to generate revenue, and that cycle can continue for only so long.