1. Week 9: Cumulative Lecture Kodak Case Study
MIS5001: Management Information Systems
David S. McGettigan

2. Agenda
Prior Lecture Recap
Kodak Case Study
Next Week

3. Prior Lecture Recap

4. Prior Lecture Recap Cost / Benefit Analysis Financial Formulas
Tangible vs. Intangible Benefits
Total Cost of Ownership
Financial Formulas
Enables value comparison of projects versus each other
Enables value comparison of projects versus a company’s cost of capital
Portfolio Management
Business Drivers
Methodology
Portfolio Types

5. Kodak Case Study
Nothing is more important than the value of our name and the quality that it stands for.
George Eastman

6. Cumulative Case Study
The Kodak Case brings together several of the key concepts discussed in the course to date:
Disruptive technology
Innovation and the culture of innovation
Financial concepts such as NPV
Change management
We will approach the Kodak case in the following fashion:
Foundation / history
Pre-Fisher Era
Fisher’s Era
Today

7. Foundation / History
What was the company’s fundamental product philosophy?
Why has the company been so successful throughout the history of the film industry, up until the Digital Revolution?
Source: Kodak and the Digital Revolution, HBS, Giovanni Gavetti Teaching Note

8. Pre-Fisher Era
It’s Chandler’s team have just discovered that Sony is introducing Mavica, a filmless camera.
They are concerned and invite you to assess the future prospects of the film business.
How would you respond to the question: is film dead?
See exhibit 5 in the case. After the Sony announcement, Kodak invested $5B in digital imaging (approx 50% of budget).
Was this the right response?
What would the NPV model look like?
What proportion should be allocated to digital?
At the beginning of the foray to digital, Kodak began to lose market share to Fuji. Is Fuji stoppable?
Source: Kodak and the Digital Revolution, HBS, Giovanni Gavetti Teaching Note

9. Pre-Fisher Era
Imaging being part of Kodak’s management team during the dearly 1980s. Chandler asks you and a colleague to predict the evolution of film and digital imaging. If you and your colleague each draw the curve below, what determines the difference in these curves?
Source: Kodak and the Digital Revolution, HBS, Giovanni Gavetti Teaching Note

10. Fisher Era
Fisher arrives from Motorola in What kind of company did he find?
What is the logic of the strategic transition he initiated?
Fisher stepped down in What was his fatal flaw?
Source: Kodak and the Digital Revolution, HBS, Giovanni Gavetti Teaching Note

11. Fisher Era
Kodak had developed excellent digital imaging technology, yet it introduced products only in peripheral areas of digital imaging (e.g. Photo CD).
How can we explain this disconnect between Kodak’s product market strategy and R&D output?
Why did a company with leading edge technology become fixated on Photo CD?
How did Kodak’s culture play a role here?
Cultural Exercise
Source: Kodak and the Digital Revolution, HBS, Giovanni Gavetti Teaching Note

12. Kodak Today
Which of the following segments of Image Capture and Printing are most attractive and why?
Home printing
Online
Retail
Looking back at Kodak’s history in digital imaging, where has Kodak missed the boat? Has it made any major strategic mistake?
Source: Kodak and the Digital Revolution, HBS, Giovanni Gavetti Teaching Note

13. Kodak Today
Compare 2009 revenue to the revenue information in the case.
What has happened to total net income and why?
Source: Hoovers.com

14. Globalization of Wyeth
Next Week
Globalization of Wyeth