Kodak declares bankruptcy

Flickering through the pages of a photo album, not only is there is a feeling of nostalgia from lost opportunities as well as significant memories from the past, but there some “Kodak moments” or photos that have a story to tell. Early Thursday morning, Eastman Kodak Co. has ended their story and has filed for Chapter 11 bankruptcy at the federal Bankruptcy Court in New York. In most instances when a company files for Chapter 11 bankruptcy, the company must remain in control of the operations as a debtor in possession and is subject to the oversight and jurisdiction of the court. Kodak is following the path of so many American corporations, such as United Airlines and Chrysler that they are trying to “reinvent” themselves after a jurisdiction of the court. Antonio M. Perez, who is Kodak’s chief executive, said “the objectives of the reorganization includes obtaining new financing to shore up confidence in Kodak, selling some of the company’s patents and adjusting “legacy” costs — like health care benefits for retirees — to the company’s now smaller size.” Kodak will obtain a loan of $950-million from Citigroup and plans to continue operating through the restructuring. However, this strategy seems to be a defensive posture, not so much of a winning and profitable strategy. No plan of a product development, diversification or a marketing penetration within the market. The number one question that most Americans are wondering is why has this 130-year-old American iconic company fail to stay afloat? When looking at the bigger picture, Kodak was seen to be the pioneer within the industry and had ruled the photography industry for decades. However, just like so many problems that American companies are facing, lower cost foreign competition. In Kodak’s case, they were competing again Japanese rival Fujifilm and their competitive advantage was at stake due to the low prices that Fujifilm was providing to customers. In addition, there was a new era of digital photography and there was no longer a need for film photography. Furthermore, the trend of having a smart phone had raised significantly and traditionally today most smart phones have cameras installed in them. By having a smartphone, it would easily replace an inexpensive camera from Kodak. Looking forward, this is can be a lesson learned and a great business school case study because Kodak had failed to keep up with technological change and sticking to your “legacy business strategy” isn’t always the best when new trends and products arise.  Kodak has flickered through their last photo, and a new chapter has begun for them. Will Kodak run towards a light on the horizon or they will fall and be remembered as another fallen American company?