Case Study: The Digitization Transformation Of Kodak Company

Eastman Kodak Company, who was once leading the industry by its advanced technologyand tremendous sales at the age of film photography, has fallen behind its competitors as thedigital photography is dominating the market nowadays. Seemingly Kodak has dug its owngrave by inventing the first digital camera in the world.Due to its unwillingness to relinquish high profits in the market of traditional image,Kodak was reluctant to set the pace for the digital arena, in the hope of monopolizing the stateof the art in digital technology without actively promoting it, so as to achieve the goal ofslowing down the development of digital camera. Nikon and Canon, however, commencedtheir own research and development in the technologies of light sensor and image processing,in the year of1999and2000respectively. That led to a breakthrough to Kodak’smonopolization, ignited a rapid advancement of digital camera, and brought down the price tothe affordable level for the general consumers. As a result, the application and popularization ofdigital technology have been greatly propelled, which has also devastated Kodak’s dream ofcontinuously harvesting high profits in the market of traditional film.In the wake of the expeditious popularization of digital application, Kodak had no otherchoice but to announce a comprehensive transformation to digitalization in the year of2003,and then carried out a second strategic restructuring in the year of2007. Kodak, as aprofessional image processing company, has set a clear strategic goal: Kodak remains focusedon meeting its commitments to customers and suppliers, and on delivering on its strategy tobecome a profitable, sustainable digital company.Based on this global strategy, Kodak has been undergoing several years of strategictransformation: It invested2.5billion US dollars to acquire5leading companies in thecommercial printing business within2years, from2003to2005. They were then merged withKodak’s existing Document Imaging Department to incorporate the Graphic CommunicationGroup, which provides customers with streamlined services including DocumentScanning&Document Image Management, PrePress, Workflow Software, and high qualityDigital/Offset Printing. In2007, Kodak sold out its Health Group for2.55billion US dollarsand reinvested the sum in the research and development of digital printing. Meanwhile, Kodakhas successfully accomplished an extensive transformation in its production lines by a series ofactions, such as migrating the production of CTP plate Chemical and maintenance service ofinkjet print head to a factory in Wuxi, China, converting Kodak Shanghai factory to manufacture high end products including CTP and digital printing equipment, as well asinvesting96million US dollars by the end of2006in Kodak Xiamen factory to set up thelargest production line of CTP plate worldwide.After8years of struggling and striving, digital business has occupied over75%ofKodak’s entire business. It can be claimed that a whole new digitalized Kodak has alreadytaken shape. From2004till present, however, Kodak has been reporting financial deficitexcept for the year2007. Unfortunately, it was even forced to file for Chapter11reorganization at the beginning of2012. Yearning is it indeed to witness how Kodak has beencoming a long way to where it is today.2012will be a year of decisive turning point whetherKodak, like a falling phoenix, can be revived and soar again.