Sales Decline of Kodak

Sales Decline

As the years passed, technological innovations arose causing the demand for film cameras and films to decline. A product is said to be in the decline stage when the consumers are no longer interested in the product and when sales volume declines rapidly. In 2001 sales of film cameras dropped for the first time.

According to Harvard University’s research, it was in February 2003 when Daniel A. Carp, Kodak’s CEO and chairman, reviewed 2002 sales data with Kodak’s senior executives. Film sales had dropped 5% from 2001 and revenues were down 3%. 2003 did not look any brighter. The film industry was “under pressure unlike ever before.” Carp predicted a “fairly long downturn”1 for traditional photography sales as consumers turned to digital cameras, which did not require film. In 2003, Kodak closed its film camera factory in the US to cut costs and by 2004 stopped selling film-based cameras in order to implement their digital transformation.

Despite the decline, this change is particularly dramatic when compared with Fuji’s net sales, a competitor of Kodak which have been growing since 2001. Fuji other brands began to compete heavily with Kodak, they changed their marketing mix by offering high quality film 20% cheaper than Kodak’s (Gavetti et al.,2004).

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Picture from linkedin

The graphs above show the declining period of film rolls and analog cameras. It is evidently seen that the fall began in 2001 and tragically ended in late 2010. During this stage, particularly at the beginning of this stage, new competitors entered. Sony was one of the biggest competitors of film-based companies. Sony made its debut on Sony Digital Mavica cameras in the year 1998 (See exhibit 2 for the marketing mix). They held the number-one position in the digital camera market in 2001 in the United States, with a 23% share. When photography moved from film to digital, it invited a whole new group of competitors into the marketplace. It was in the years 1998 to 2005 when companies like HP, Lexmark, Epson and Canon suddenly became photofinishers with their color printers, some of which were designed to work easily with digital cameras to produce prints. These companies dominated the market. On the other hand, mobile phones with cameras also joined the competition and flourished in the year 2008, 120 million camera phones were in use in the said year, just in the U.S. alone, according to PMA. After 74 years of production, Kodak stops selling 35mm colour film in the year 2009, the other firms that had historically been in the film photography business such as Fuji and Konica Minolta stopped selling their films in late 2010(Gavetti et al.,2004).

You will be surprised to know that Kodak’s very own Steven Sasson, invented the digital camera at Kodak, which remarked the history of digital research at the company. They created a new product that in the long run was the one which destroyed them. Kodak declared a Chapter 11 Bankruptcy in the year 2012. After filing for bankruptcy, Bloomberg is reporting that the company intends to shift its business toward printers and its ink. Selling off its camera unit and perhaps its patents should allow for more cash which can be invested in further patent litigation and licensing. (Crook, 2012)