Kodak Listens to Customers in Transition

The Eastman Kodak Company founded by George Eastman in Rochester NY in 1888 became the undisputed leader in silver halide film photography; his motto: “You press the button, we do the rest”. With the introduction of low cost digital cameras in 1995 it looked like the end of film photography and some said the demise of Kodak.

If you look closely at Kodak today you will find that more than half of their 3rd quarter 2005 revenue came from digital products not from silver halide photography. The management recently described how they have segmented their business into four major market areas and will reorganize the company around these businesses ending many years of centralized structure around a traditional business.

Each of these businesses will be managed to build market share in the growth areas and harvest cash from those older segments where no growth opportunity exists. Although they lost over $1 billion in the third quarter of 2005 they are on there way out of a massive restructuring effort and winning market share in the process. They have been the market leader in digital cameras for the last four quarters; a feat most would have said was impossible only three years ago as they began their assault against electronic giants like Sony and Cannon.

They did this by listening to customers and addressing their need to “Take, keep and share pictures”. They addressed all aspects of the customer value chain from providing the highest quality (resolution) cameras, to offering on-line storage, to printing the highest quality images while their competitors focused on making cameras.

Don’t count Kodak out. They know what their customers want, and they are focused on dominating the digital photography world in the same way they dominated the film photography world.