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Picture perfect?


Themes: Marketing and strategy

When Kodak filed for bankruptcy protection in 2012, one man was not surprised. Dr Kamal Munir explains how he predicted the companies’ problems in 2005 – and how his research has much to say to technology-driven businesses.

In the 1970s, the Kodak brand was synonymous with photography; well into the 1990s the company was considered one of the five most valuable brands in the world. Then, in January 2012, Kodak filed for Chapter 11 protection from bankruptcy. The company’s downfall attracted comment from media around the globe, but for Dr Kamal Munir – Reader in Strategy & Policy and Head of the Strategy & International Business subject group at Cambridge Judge Business School – it was merely the latest chapter in the story of a firm whose waning influence he has documented and analysed for years.

In 2005, Munir co-authored a paper in the journal Organization Studies that rapidly crossed over from academic publishing into the world of business commentary – and into the boardroom itself. What’s more, it shaped our understanding of the irresistible ascendancy of digital photography. InThe Birth of the ‘Kodak Moment’: Institutional Entrepreneurship and the Adoption of New Technologies, Munir and CJBS co-author Nelson Phillips demonstrated that Kodak had transformed the very concept of photography from a professional and commercial activity into an integral part of everyday life.

I looked at Kodak’s rise and fall,” says Munir. “A lot of it was very archival. The figures were extraordinary. By the 1980s, 60 to 70 per cent of all photos taken were on film, a market which Kodak overwhelmingly dominated. It had the resources, the brand, the clout. But I was asking: What did Kodak miss?”

No one disputed that Kodak was a technological trailblazer: in 1882 it created roll film, and in 1975, the first digital camera. Consequently, analysts of the company’s difficulties as it struggled to adapt to the digital era found it hard to understand where Kodak had gone wrong. After all, in 1979 one of its executives, Larry Matteson, had written a remarkably prescient report on how the market would transition towards digital.

Munir’s answer was deceptively simple: that it is not just the creation and implementation of new technologies that can make or break a company’s business model, but the creation of meaning. Munir’s analysis showed that it was this failure to break out of the meaning universe it had itself created, and to develop a fresh understanding of this rapidly changing pastime, ­that had completely undermined the company’s prospects, despite its technological innovation.

Here was a fresh insight into one of the most spectacular corporate declines of the past few decades. His research was picked up by the business media, who recognised a way to make sense of an otherwise baffling story.

The story of how Kodak ‘fumbled the future’ (to adapt a famous phrase originally used about Xerox) is well-known and often used as a cautionary tale about the disruptive powers of new technologies,” explains Observer technology columnist and Vice-President of Wolfson College Professor John Naughton. “But what was not widely known was the finer points of the organisational story: the sheer extent of Kodak’s market dominance, for example; the way the company effectively defined popular photography as a way of chronicling family history; the way it identified women as its key customers, because they had become the chroniclers of their families’ lives; and why, after Kodak had effectively invented digital photography it was unable to capitalise on it, because males are the market for technology whereas Kodak’s expertise lay in marketing to women.”

Munir’s analysis was read by Kodak executives, but he believes the company was in denial about the consequences of the weakness his work had uncovered. “Of course the Kodak management didn’t like it. They were telling shareholders ‘Kodak is doing very well’ “, he says. Subsequent interaction was through the pages of the financial press – Kodak issued a statement in the Financial Times, to which Munir responded, likewise in print.

Consequently Munir was not surprised when Kodak filed for Chapter 11 protection in January 2012 and began entirely restructuring its operations. The company re-emerged late August 2013 with a plan that should see it reduce its debt, divest its film and printing business, and refocus on selling printing equipment to corporate, not consumer customers.

Has Kodak learned any lessons from Munir’s analysis? Spokesperson Gillian Beard says the company is looking forward, not back: “We have a singular focus on the new Kodak that will be profitable and sustainable by bringing breakthrough solutions to commercial printing, publishing, packaging and functional printing markets.”

Only time will tell how the new Kodak fares. But CJBS’s Munir remains perhaps the most insightful and impactful analysts of how it is not in fact the technology itself that creates the disruption.

Kamal’s signal contribution,” says Naughton, “is that he understood and articulated the fine texture of the Kodak tragedy.”