What is the main reason for Kodak's bankruptcy and why?

1, digital technology ends film Kodak

The first is the fierce price competition from the market. Self-labeling (or retailer brand) reduced the price of Kodak products by 40%. In the markets of Eastern Europe and developing countries, cheap film also poses a great threat to Kodak, because low-income people pay more attention to price than brand and quality. Kodak implemented a series of price counter-attack strategies, which once played a role to a certain extent, but still could not completely eliminate the bad influence brought by the price war.

Another challenge facing Kodak comes from the impact of digital imaging technology on traditional imaging technology. High cost, heavy equipment and serious pollution are difficult problems in the production and printing of negatives and photographic papers, but the inconvenience brought by using negatives and photographic papers is that they are bulky, unable to be preserved permanently and difficult to find.

2. Amazing strategic transformation

Although 1998 Kodak began to feel the pain of shrinking traditional film business, Kodak's decision-makers have been afraid to vigorously develop digital business for fear that film sales will be affected.

After 2000, the global digital market continued to grow at a high speed, almost doubling, and the global demand for color film began to decline rapidly at the rate of 10% per year. In 2002, Kodak's digitization rate was only about 25%, while competitor Fuji had reached 60%.

In 2004, Kodak launched six late-stage digital cameras, but the profit margin was only 1%, and its traditional business income of $8.2 billion shrank by 17%.

In 2006, Kodak sold all its digital camera manufacturing business to Flextronics Singapore. In 2007, it sold the medical imaging department, one of the first four businesses, to Canadian asset acquisition company OneXyi for $2.55 billion. In the same year, its Le Kai shares were also transferred to Guangzhou Chengxin Venture Capital Co., Ltd. at a low price of $37 million.

Since 2007, Kodak has implemented the second strategic reorganization, laying off 28,000 people, up to 50%. However, when the financial crisis broke out in 2008, demand weakened and the market shrank. Its fourth quarter report shows that Kodak lost $654.38+33 billion, and its annual revenue declined for the third consecutive year. Kodak, which barely made a profit by selling assets, was suddenly returned to its original shape.

Kodak's 20 10 financial report shows that the loss from continuing operations is $58 million. Moreover, Kodak's main source of income is still patent sales, and the new product business such as inkjet printers has not really opened the market.

Extended data

Kodak qimeng

1, an unreliable "brand"

A widely circulated legend about the brand is that if one day a fire burns down the Coca-Cola Company, as long as the formula is still there, a Coca-Cola Company will be rebuilt soon. Maybe it's true. 99.6 1% water, carbonic acid and syrup, plus 0.39% formula, this is Coca-Cola. Among the top global 100 brands in 2008 jointly selected by Businessweek and Interbrand, the brand value of Coca-Cola exceeded $68.7 billion.

Don't forget the same selection. In 2003, Kodak's brand value exceeded $7.8 billion, while in 2004 it was only $5.2 billion, not to mention it was completely out.

The once great brand value is fleeting. The once huge brand equity on paper has little effect on Kodak's rebirth. Since the first Olympic Games of 1896, Kodak has sponsored sports events, and brand promotion through large-scale sports events has become a traditional project of Kodak. Since the 1986 Olympic Games, Kodak has become the "top sponsor" of every Olympic Games before 2004.

Until the 2004 Athens Olympic Games, Kodak began to enter a difficult period and remained a "top sponsor", but this did not help save Kodak's fate.

Fujifilm seeks diversified development through market exploration, and adjusts its earliest three business sectors, namely, imaging business (traditional film, digital camera and digital printing equipment), information business (optical materials such as printing and medical devices) and document processing business, into six key development businesses, namely, medical life science, high-performance materials, optical components, electronic imaging, document processing and printing. The traditional film business only accounts for 2% of the company's overall revenue.

As the "king of movies" in China, Le Kai's road to transformation has always been concerned by the outside world. Realizing that the profits generated by product structure adjustment alone are not enough to maintain the sustainable development of enterprises, Le Kai has chosen optical film (widely used in the fields of optics and photoelectricity, and optical film is one of the key materials for LCD screens such as flat-panel TVs and notebook computers) as the main direction of industrial structure adjustment, and made efforts in the fields of technology-intensive, capital-intensive, technical difficulty and high added value.

Although the traditional film industry declined because of the arrival of the digital age, enterprises were forced to transform, but from the market situation, only Kodak faced the dilemma of bankruptcy after the transformation was invalid. This is because Kodak is in a passive transformation, and Fuji and Le Kai have adjusted their business and strategy in time during their development. Although the transformation was not very successful, it still maintained the momentum of subsequent development. However, Kodak was forced to transform after the failure of "betting", and it had little effect after many years.

2. A century-old shop needs "innovation" more.

The decline of Kodak is not only the lag of its technological innovation, but also the inevitability of its neglect of consumer experience. It was not until 2003 that Kodak announced that it would fully enter the digital industry, and then it sold the medical imaging business and related patents one after another.

But at that time, Japanese brands such as Canon and Fuji had already occupied the leading position of "digital image", and even South Korean Samsung and even China Huaqi had begun to take shape. At this point, the giant Kodak has lost the opportunity to occupy the "digital image".

In this changing era, only "innovation" is the unchanging truth. This innovation is not only based on technology and management, but also based on business model and even consumer experience. For established enterprises, they will either die in stubbornness and arrogance or regain their vitality in constant innovation.

Although there is no absolute evergreen foundation in the world, the survival of enterprises is full of many uncertain factors. Similarly, innovation and change can not completely guarantee that enterprises will always be at the forefront, but it is a necessary prerequisite for the sustainable survival and development of enterprises. Without innovation, it is difficult for anyone to win the future, and arrogance and neglect of consumer experience will make the future even more unsustainable.