Christian Sandström on Kodak's failed digital transition
1.
2. Christian Sandström holds a PhD from Chalmers
University of Technology, Sweden. He writes and speaks
about disruptive innovation and technological change.
6. In the early 1990s, Kodak tried to make predictions
regarding the diffusion of the new technology.
7. Back in 1985, Kodak founded the ’Technical
Intelligence Group’ which primarily dealt with such
issues as the substitution of film by digital imaging.
8. Digital imaging had been hyped back in the 1980s
but no major commercial breakthrough had been
accomplished yet.
9. In 1994, the group had come up with a
technology substitution forecast.
10. Under the direction of Terry Faulkner, Tone
Kelly had made a forecast which was based
upon the logic of an S-curve.
11.
12. History has shown that new
technologies and products tend to be
diffused at an initially low pace…
13. As the technology becomes more widely
known and the performance reaches
sufficient levels the pace increases…
14. … And eventually the growth slows
down as the market starts to mature.
15. Based upon this logic and a careful
analysis, Faulkner and Kelly concluded
in 1994 that 50 percent of the market
would be digital in 2004.
16. This forecast turned out to be
remarkably accurate (it actually
happened in 2003).
17. For a company that made virtually all its
profits on film, this wasn’t good news.
18. When the
forecast was
presented to top
management it
wasn’t well
received by
everyone.
19. Some of them
referred to the
large installed
base of cameras
and others
pointed at the
growth
opportunities
related to
emerging
markets.
31. Fisher and Kavetas thought that Kodak had
always been about film and that transforming
the entire company in less than a decade
would be very difficult.