Pay close attention over the next few days on what is happening with the Eastman Kodak Company. I've read a couple of news stories suggesting that the 133 year-old company's demise is imminent. Just this past Wednesday, media outlets such as CNN and MSNBC reported on the company's ongoing financial struggles, specifically pointing out statements that company representatives made in a quarterly earnings report that the company didn't have "committed financing or available liquidity to meet debt obligations coming due within 12 months."
If these reports are true, it would be a tragic end to a company that was once one of the stalwarts of American industry. Kodak was the fourth most valuable brand in the U.S. (after Disney, Coca-Cola, and McDonald's) with just over $15 billion in revenue as recently as 1996. The company declared bankruptcy in 2012 (see the graphic below from The Economist magazine).
Following declaration of bankruptcy in 2012, the company shifted from the photographic film business and focused on commercial printing, packaging, and advanced materials and chemicals (including pharmaceuticals). The company sold off most of its businesses and patents.
Kodak has been the subject of countless business articles, case studies, and graduate theses on disruptive innovation (see, for example, the Harvard Business Review article, "Kodak's Downfall Wasn't About Technology"). Kodak's core business was selling photographic film. Once cameras went digital, people became less interested in film. And when cell phones became cameras, digital cameras became much less popular.
The ironic twist in all of this was that an engineer at Kodak actually invented the digital camera. Kodak's response at the time was to focus on their core business. Therein lies the reason for all of the articles and case studies! It's a classic example of Clayton Christensen's "disruptive innovation", how a smaller company with a new, often simpler product, can initially target low-end, niche markets, gradually improve, and ultimately displace leading companies.
The company recently issued a press release that countered the claims made in the last few days, stating that it had no plans of ending operations or filing for bankruptcy. Whether this is true or not, remains to be seen. I will be watching with great interest to see how this all plays out.
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