November 18, 2011

In my marketing book (www.powershiftmarketing.org) I use Kodak as a classic example of a company that couldn’t change fast enough to cash in on the digital photo revolution. That’s why I’m fascinated by their latest misadventures. They just don’t seem to get it.

They are now focused on raising money for their computer printer business by selling their patents and assets like Kodak Gallery. The rise and fall of Kodak Gallery is classic Kodak, a corporation pretending to embrace change but fundamentally staying with old paradigms.

As reported by Dana Mattioli in the Wall St. Journal, Kodak purchased an online photo storage and printing business for less than $100 million in 2001. Then, re-branding it as the Kodak Gallery, they did everything they could to drive it into the ground by not investing in it. According to ComScore Inc, the Kodak site had 7 million visitors monthly (2008), it now has 1.5 million. The major competitor Shutterfly drew 6 million visitors last month.

In my opinion, Kodak is destined to fail. Why? Because they simply can’t shift from old beliefs. Instead of using their proven brand name to invest in recapturing photography leadership in all things digital (including the Gallery website), they decided to bet the farm that printer ink re-orders could be their next “film-like” cash cow. Dumb.

Food for thought: Are you really embracing change by listening to your customers or are you, like Kodak, just trying to apply an outdated corporate philosophy by chasing opportunities that others have already cashed in on?

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