CASE STUDY ANALYSIS ON FAILURE OF KODAK &

POLAROID

An individual assignment by
H.D.Saranapala (2018/MBA/WE/80)

Course: MBA 5219 – Managing Innovation

Lecturers: Dr. C. Mahesh Edirisinghe

Trimester - VI
January 2021

Postgraduate and Mid-Career Development Unit

Faculty of Management and Finance
University of Colombo

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 Answers

1. What type(s) of innovation(s) used by Kodak at its early stage emerge in the market as a
leading company? Justify your answer.

Product Innovation – Product innovation is introducing a new good or service that is

substantially improved. In this case, it can be identified that Kodak has used product innovation
as they were the first to introduce digital cameras to the market.

Technological Innovation – This is based on specific technology, invention and discovery.

Kodak has used technological innovation when moving from analog technology to digital
technology.

Further, process innovation also can be seen in early stages of Kodak. Process innovation is
introducing a new or significantly improved production or delivery method. In Kodak, they
made significant changes in techniques, equipment and technology when moving towards
digital cameras.

2. What type(s) of innovation(s) introduced by the Polaroid? Justify your answer.

Product Innovation – Since Polaroid had the control of almost all the patents in instant
photography and had developed one of the best digital cameras it can be considered that
Polaroid used product innovation at their early stages.

Technological Innovation – Polaroid had always considered as a technological company

because of their technological sophistication. Further, the case study has highlighted that
Polaroid was exploring the digital horizon when Kodak was mastering digital technologies.
Therefore, it can be justified that Polaroid had used technological innovation.

Business Model Innovation – This is changing the way of business in terms of capturing value.
When it comes to Polaroid, the company was into instant photography within the existing
camera market. Compared to Kodak, it was a totally new business model.

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3. Briefly discuss with examples given in the case study, what led to the downfall of Kodak
and Polaroid. Your answer should link to relevant theories that have been discussed
during the class sessions.

Both Kodak and Polaroid was the key market players in camera market and there were
successfully invented the new products among past decades. The reason behind the downfall of
Kodak and Polaroid is not because of invention of new products or technologies, but because of
the failure in commercialization.

Innovation = Invention + Commercialization

According to the above equation, it can easily identify that innovation is a combination of
invention and commercialization. The case study mentioned that, “It didn’t demonstrate the
same aggressive quality in commercializing the digital technology that it demonstrated in
mastering the technology.” This describes the reason for the downfall of Kodak since slow
commercialization in a rapidly changing technology would definitely leads the company to its
end. As an example, the employees of Kodak itself tried to push away the customers who were
seeking to purchase digital cameras back to analog technology.

Further, the mindset of the employees within the organization was another reason for the
downfall of the organization. The management has the idea of making the sale only through
consumables and that made them to prioritize on selling film as much as possible. According to
an example mentioned in the case study, Microsoft had tried to use Kodak’s software in
Windows but it was rejected by Kodak, asking a way of getting revenue from each picture the
user takes which Microsoft did not agree on. This could have been a great opportunity for
Kodak but at that time they were not in a position to identify the future of the market. An
opportunity is an idea which adds value to the consumer, solves a problem, makes some money
and a good fit with the entrepreneurial team according to the Timmons & Spinelli (2007). The
definition itself explains the business suggestion of Microsoft could be an opportunity to Kodak
since it adds vaue to their product and helps them to retain and compete in the digital market.

Polaroid was successfully playing in the market with all the patents they had in instant
photography as well as by developing best digital cameras but as they entered to the
commercialization stage, the resistance from internal staff made them to fail in the market.

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 Similar to Kodak, senior managers of Polaroid were not confident in moving to digital
photography as it would destroy their profits when they can earn more on investing on film. As
already mentioned in above, innovation would not be successful if at least one part of the
equation is not fulfilling. Even though the both companies were rich in invention, they were
lacking in commercializing and therefore it caused or the downfall of both Kodak and Polaroid.

Kodak and Polaroid can map on the Creative Invention Vs Innovative Opportunity grid.

High
Struggler Innovator
Creative
Invention

Stagnator Copier
Low

Low High
Innovative Opportunity Perception

Both Kodak and Polaroid have showed low innovative opportunity perception and high creative
invention and because of that both organizations can be placed in the cage of “Struggler” in creative
invention vs innovative opportunity grid.

4. If you were the CEO of a company that faces similar challenges, what would be your
strategy to overcome the threats of closure?

Create and promote an innovative culture

In order to compete with upcoming trends in the market, company should be innovative and
none of the companies can succeed if they are fail to convince their internal customers to change
according to the new technologies despite of having the most creative ideas. Therefore, before
invent a new product or technology I would make the mindset of employees to adapt to the
changes. Also, in order to promote an innovative culture among the organization, setting KPIs
related to encourage innovation and rewarding employees with innovative ideas would be done.

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 Horizontal integration
In order to overcome the threat of closure it is always better to go for a merge with a competitor.
If the market data signals that the organization is close to a closure, analyze the existing
potential competitors and negotiate with them to go for a merger since it would be mutually
benefitted for both organizations.

Product diversification
If I were the CEO, I would not stick to a particular product and develop a product portfolio with
diversified products. Therefore, if one product fails there is always other opportunities to
survive in the market while enjoying the profits from those products.

Focus on next level

Kodak and Polaroid was the first movers for digital technology and the issue was with
commercializing. So, if I were to take a strategic decision I would just stagnate little in the place
we are in the market and focus on commercializing the next level of technology to be
introduced. If the organization already have the potential to come up with inventions there
should be adequate facilities and capacity within the organization. Therefore, instead of going
for a closure it is better to work on next level of innovation so that the organization can be the
first mover for the upcoming technology as well.