Kodak Files for Bankruptcy
After years of financial turmoil, Kodak has decided to file for chapter 11 bankruptcy, which allows a company to reorganize itself, as of January 2012 in order to boost its cash position and stay in business (Dobbin, 2012). The bankruptcy is as a result of Kodak being in its final stage of layoffs and downsizing after two years (Kishore, 2012). Since 2003, over 47,000 jobs have been cut along with thirteen factories being shut down (Kishore, 2012). Background Information
Founded in the 1800’s, Kodak experienced rapid growth in the early 20th century along with an increase in auto-production in the United States (Kishore, 2012). Kodak was the first company to develop the film roll with colour in 1935. Employment was growing rapidly with 20,000 employed in 1927, 100,000 in 1946, 120,000 in 1973, and 145,300 in 1988. This growth was partially attributed to the acquisition of many subsidiaries such as printing and medical imaging. (Kishore, 2012) Unfortunately Kodak was unable to keep prospering as they began to face intense competition from many emerging firms in the film market. Threat of Competitors
Kodak faced fierce competition especially from Asian manufactures such as Fujifilm. In the 1980’s, Fujifilm offered single use film cameras and decreased prices which cut into the revenue of Kodak. In the 1990’s Kodak lost its market share to digital camera producers such as Canon, Sony, and Nikon. However, during this time Kodak spent $4 billion on developing photo technology inside cellular phones and digital devices (Dobbin, 2012). Unfortunately Kodak was determined to keep relying on film allowing its competitors such as Canon Inc. and Sony Corp to exploit the rapidly growing digital camera market. Kodak could not reinvent itself in a rapidly growing economy. Although Kodak anticipated the growing popularity of digital cameras and actually invented the first digital camera in 1975, they did not introduce...
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