Back in the 19th century, Kodak disrupted photography. About 100 years later, the company became lost ground due to the same forces when digital imaging started to prosper.
2. Christian Sandström holds a PhD from Chalmers
University of Technology, Sweden. He writes and speaks
about disruptive innovation and technological change.
3.
4.
5.
6. Kodak has been through some really tough times
since the rise of digital imaging.
7.
8. In the late 1980s the company employed
about 140 000 people, today this figure has
gone down to less than 20 000.
9. The rise and decline of Kodak can to a large
extent be explained by using a framework
developed by Clayton Christensen at Harvard.
11. He made a distinction between disruptive and
sustaining technologies.
12. A sustaining technology is one that improves the
performance of a product according to the attributes
that the established customer base appreciates.
14. A disruptive technology on the other hand offers an
initially worse performance according to what
customers have appreciated.
15. At the same time it brings new performance
attributes such as simplicity or portability to the
marketplace.
16. Therefore it tends to prosper in new customer
segments and as it improves along the mainstream
dimensions, it eventually displaces the former
technology.
17. Established firms therefore miss the boat by
listening to their existing customers and by keep
moving up into increasingly sophisticated
segments.
29. This value
proposition
was very
different
from the one
that the
leading
photography
companies
offered back
then.
30. The leading photographic companies in the
U.S. were Anthony and Scovill (who merged
into Anthony & Scovill in 1901, later shortened
to Ansco). Their very successful businesses
were focused on meeting the needs of portrait
studios and serious amateurs.
41. If Kodak and the roll film had simplified
photography, digital imaging made it cheaper
and simpler than ever before.
42. The image quality was significantly worse, but
digital imaging offered new performance attributes
that were valued by non-photographers.
43. The image could be viewed instantly, it did not
cost anything to capture a picture and they
could be shared easily with the help from
computers and the internet…
44. Once the digital cameras had reached the
point of being ‘good enough’, sales exploded.
30
25
20
15
10
5
0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Number of film and digital cameras
sold in the United States.
45. Just like the roll film, digital imaging
attacked from below and brought new
performance attributes to the market.
49. 6 million pixel resolution is
good enough for most
applications. The
perception of colour is
more important than the
perception of sharpness.
Kodak, 1996
50. But more than a century of high
profits related to film were still
going to be removed…