Polaroid vs. Kodak
Company
Kodak and Polaroid are both extremely different firms. Polaroid has only one specialization and that is the instant photo market. Kodak on the other hand has reaches in all photo related industries. Kodak had high fixed costs due to their in-house production while Polaroid opted to be flexible and loose by subcontracting most of its production facilities. Therefore, Kodak had to reach a certain level of market volume in order to break even and become profitable. Polaroid, on the other hand, had huge R&D cost that was an impediment to break-even point. This difference in strategy was an incentive that gave Kodak its reasoning for aggressive maneuvers in the market to weed out Polaroid. It wanted its economies of scale to be created easily so that its operations were profitable. With Polaroid, like a thorn in the side, this was a difficult and cumbersome task.
Epilogu
The duel that ensued between Kodak and Polaroid involved various complex strategic tools such as pricing, marketing, to distribution tactics. The costs entailed were enormous for both sides. Failures as well as success were mixed in blood and tears on both sides. Both parties counteracted each the other’s move, which resulted in strategic game shifts. The market they created was a hyper-intensified situation where both firms would create quick competitive advantages and then abandon them immediately as the other party was catching on. In such an environment, the constant introduction of product development, the rapid renewals of pricing and marketing strategies were key enablers in gaining the leading position.
In the end Kodak lost a lawsuit that was filed by Polaroid in 1976 about technology infringement. Perhaps coupled with doubts that Kodak had about the market and its future, or whether the market did not suit Kodak’s expertise, we do not know, but Kodak left the instant photo market in 1985 when it lost that lawsuit.
In hindsight, so much was lost in a vain attempt
Kodak and Polaroid are both extremely different firms. Polaroid has only one specialization and that is the instant photo market. Kodak on the other hand has reaches in all photo related industries. Kodak had high fixed costs due to their in-house production while Polaroid opted to be flexible and loose by subcontracting most of its production facilities. Therefore, Kodak had to reach a certain level of market volume in order to break even and become profitable. Polaroid, on the other hand, had huge R&D cost that was an impediment to break-even point. This difference in strategy was an incentive that gave Kodak its reasoning for aggressive maneuvers in the market to weed out Polaroid. It wanted its economies of scale to be created easily so that its operations were profitable. With Polaroid, like a thorn in the side, this was a difficult and cumbersome task.
Epilogu
The duel that ensued between Kodak and Polaroid involved various complex strategic tools such as pricing, marketing, to distribution tactics. The costs entailed were enormous for both sides. Failures as well as success were mixed in blood and tears on both sides. Both parties counteracted each the other’s move, which resulted in strategic game shifts. The market they created was a hyper-intensified situation where both firms would create quick competitive advantages and then abandon them immediately as the other party was catching on. In such an environment, the constant introduction of product development, the rapid renewals of pricing and marketing strategies were key enablers in gaining the leading position.
In the end Kodak lost a lawsuit that was filed by Polaroid in 1976 about technology infringement. Perhaps coupled with doubts that Kodak had about the market and its future, or whether the market did not suit Kodak’s expertise, we do not know, but Kodak left the instant photo market in 1985 when it lost that lawsuit.
In hindsight, so much was lost in a vain attempt