Companies are under constant pressure of adapting their business or closing the doors for good. One company learned first-hand how avoiding change and ignoring market trends can lead to an unfortunate demise.
Kodak: The Inventor of the First Digital Camera
Founded in 1888, Kodak dominated the market for cameras, film, chemicals and paper for nearly a century. The company represented everything photography was in people’s minds – the fun, the memories, the technology and the Kodak moment.
In 1975 Kodak was a pioneer in creating the first digital camera.
Unfortunately, their team underestimated consumers’ desire for a convenient, easy-to-use camera that didn’t require film. Instead of releasing the digital camera and introducing new technology to the world, Kodak chose to keep the technology under wraps for fear that it would hurt their film sales.
Film was Kodak’s most profitable product, so when the executive team made the decision to focus on film and keep the digital camera an internal project, they thought they were protecting the company’s future. However they learned the hard way that companies can’t ignore trends and consumer demand.
If you don’t Do It, Your Competitors Will
Around the same time Kodak was improving its digital camera technology, two other camera manufacturers happily stepped up to the plate and released digital cameras for sale to the public. Sony and Canon started selling cameras in the early 1980s. By the time the team at Kodak realized they needed to enter the digital age whether they wanted to or not, the competition was too fierce for Kodak to catch up.
Kodak’s marketing myopia was the start of a downward slope for the company. Kodak has since attempted to regain its market share and restore its public perception, but its strategy misfire with the digital camera has left a scar that can’t be ignored.
When Sales Get Tough, It’s Time for a New Business Strategy
Kodak viewed itself as being in the business of film, so it wanted to protect the stable revenue from film sales. The company might have had a different experience had executives viewed themselves as being in the business of telling stories and providing customers with a way to share their memories. By asking the right questions and paying attention to consumer desires, companies can develop effective strategies that help navigate through uncertain times.
When organizations are having trouble meeting sales goals, it’s wise to explore one of the below business strategies for growth:
- Market penetration: Either increase market share by gaining more buyers, or increase product usage by encouraging current customers to buy more products.
- Product development: Improve an existing product or extend an existing product line to encourage customers to make more purchases.
- Market development: Offer current products to new markets by expanding geographically or targeting new audiences.
- Diversification strategies: Create a completely new product targeted at a new audience.
These strategies were created to help companies develop strong business models by aligning their company needs with consumer demand. If Kodak had embraced a product development business strategy to sell the digital camera to its current customer base, then it might still be the photography giant it once was.
When trends change, pay attention to what your target market is saying and adapt your business accordingly. Kodak learned the hard way, but you don’t have to. If you’re seeing a plateau with sales or a shift in market trends, give us a call at (651) 286-6700 to talk about a business strategy that could be the difference between making it and breaking it for your company.
- MASSolutions, “KODAK’S MARKETING MYOPIA“
- Forbes, “Kodak Failed By Asking The Wrong Marketing Question“
- Photo 1: Stockmonkeys.com