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To begin with, senior leaders at Kodak were acutely aware of the approaching storm.
But when theaters finally moved to digital projection, the company couldn’t slash costs fast enough to keep up with declining volumes.explained to me, modularization “makes consumer products, our consumer products, a commodity.” Once consumer electronic products transitioned to digital, Shohtoku noted, leading brands such as Panasonic and Sony lost their competitive edge in those markets.This explains how hundreds of companies, many of them startups, could move into imaging and how a company such as Go Pro Inc., based in San Mateo, California, could appear out of nowhere and take the consumer video recorder market by storm.First, digital imaging was based on a general-purpose semiconductor technology platform that had nothing to do with film manufacturing — it had its own scale and learning curves.The broad applicability of the technology platform meant that it could be scaled up in numerous high-volume markets (such as microprocessors, logic circuits, and communications chips) apart from digital imaging.Management was constantly tracking the rate at which digital media was replacing film.But several factors made it exceedingly difficult for Kodak to shift gears and emerge with a consumer franchise that would be sustainable over the long term.Contrast this with Sony Corp., which entered the sensor business to support its electronic video recording business.As an electronics company, its organizational capabilities were far more aligned with what was needed to succeed. But Sony and other Japanese consumer electronic companies also had to adjust to the changes brought on by digital technology.Eastman Kodak is often mischaracterized as a company whose managers didn’t recognize soon enough that digital technology would decimate its traditional business.However, what really happened at Kodak is much more complicated — and instructive. is often cited as an iconic example of a company that failed to grasp the significance of a technological transition that threatened its business.