Thursday, May 12, 2005
Can Kodak Survive?
It’s interesting to see that Kodak has just hired a former HP exec as CEO. Antonio Perez, takes over from Kodak veteran Daniel Carp. He has perhaps the most fascinating management challenge going. Kodak has been a major part of billions of people’s lives for decades. It is of course in danger of being a piece of pure history unless it can make the successful switch from the old fashioned analog world to the new fangled digital era. The switch is course non-trivial. At a basic level Perez has to get people convinced that instead of buying a small yellow box of film to go inside some expensive piece of camera equipment, they should instead just buy the expensive piece of equipment from Kodak. That would be like Shell stopping selling gas and starting to sell cars. Sure, I trust Shell to produce gasoline that will make my car run but I’m not convinced they can produce a great car. After all it’s a totally different skill set. The challenge is of course even greater than just that. Whereas in the past they sold photographic paper to developers, now they have to convince the public to buy the paper to put in their home printer. What a nightmare. In the good old days they could target the guy at the local camera store and he’d use Kodak paper for his customer’s prints. After all, most customers just want nice prints. If the paper is made by Kodak or Agfa they don’t care. Kodak now needs them to care and keep on caring. This a tough challenge. Of course many customers may buy the Kodak paper because they know the name. But they may also buy paper from a brand like HP or Fuji that they know just as well, especially if its less expensive. As you can see I think Mr. Perez has a very tough challenge ahead. Sadly I’m not that optimistic about his chances given the level of competition he faces. But Kodak is a brand well worth saving, so I truly wish him the best of luck.