PLAD refers to our group members’ first alphabet of first name as P - Priscilla, L - Lisi, A - Ali, D - Dylan. Where the lateral abbreviation of the PLAD is: P - 'Performance and Progress', L - 'Leadership', A - 'Aspiration', D - 'Destination'. By our efforts we will show our 'performance' along with continual 'progress' with the reflection of our individual 'leadership'. We have high vision to achieve our goals with high 'aspirations' to reach our ultimate 'destination'.
Different applications of cloud computing will be discussed focus on emerging innovation practices in the following four industries: online dating, game, photography and conferencing. All of these four industries benefit from globalization, and strengthen the relationships among people through entertainment. Users in these industries can easily switch to each other and have synergy effect.
Online Dating
First of all, one of the most interesting business models of cloud computing, software as a service (SaaS), will be applied to illustrate online dating industry. Cloud providers create and manage the platform and infrastructure for online dating, where enable lonely people to develop relationships in the virtual world. Comparing to face-to-face communication, online dating allows people to talk to anyone at anytime in anywhere as long as you have a computer or a smartphone, social networking has never been easier. Along with the expansion of cloud, as well as the increasing demand of online social networking, online dating has become more and more popular. Generally speaking, online dating users usually have to pay for a subscription fee to access to the sites or Apps, which is one of the characteristic of SaaS. To support members’ activities, like uploading and posting photos and videos, as well as text/voice/video chatting, capacity of cloud is essential. If the cloud provider fails to provide stable and smooth service experiences, one may fail to advertise him/herself and lose his/her soul mate easily. Moreover, as SaaS has one drawback that the users' data are stored on the cloud provider's server which could be unauthorized accessed, appropriate management systems are crucial to protect users’ security and privacy.
Another interesting topic of cloud computing technology applied here is game industry. It operates by adopting videos or files storage and execution as the server for their on-demand “Gaming as a Service” (GaaS) solution in order to provide users extraordinary game service across various devices. There’s no doubt that gamers could experience tremendous advantages over traditional gaming systems under this new combination. For that many giant game companies could offer a bigger capacity of cloud storage for saving different categories of games and private user data in a more safe way, only charging game users a small amount of money or even for free！What we need to do is just to access them by different devices like mobile phone, personal computers, etc, without any time and space limitation simply. Initially, cloud computing would influence the gaming industry positively, stimulate the rapid development of gaming companies to dig out more better ways of user playing experience. In addition, the increasing globalization in recent years accelerate the gaming market growth under emerge of technological issue and game playing trend. On the other side, globalization also strengthens private tailored game production in meeting with the higher demand of customer preference and satisfaction when facing the opportunity of advanced technology sharing and the fierce game market competition across countries broader.
Photography applications for cloud computing will definitely arouse the interests of photographer, shutterbug or those who just taking for fun. The various available cloud platforms have made it a reality of image storing, organizing, editing and sharing. Saving photos to the “Cloud” really refers to saving photos to an off-site storage system and accessing those photos over the Internet. Just as we get our electricity and water from remote sources and pipe them into our homes, the cloud pipes computing power into our homes via the Internet.
Cloud computing works as a nice and uncomplicated service that quietly collects all your photos and helps to share the best shots, which embraces public and private gallery options, and automatically upload from phone or tablet. When it comes to sharing, by utilizing elegant and intuitive controls, it’s easy to keep your public shots pubic and private shots private on both. Nevertheless, cloud storage and sharing also face with many problems technically or socially. For instance, access to files is sometimes restricted to a certain web page and restoring your pictures also have limitations at sizes or bandwidth. Under globalization, people from all over the world could share photographs anytime from anywhere, which is strengthening of the virtual interaction and communications, but also brings about emerging problem of copyright or hacker.
Conferencing makes your life easier; it makes you feel like home anywhere you are. No matter if you or your family, friends are far away; you still feel like you are with them right in front. Conferencing as in Video or Audio helps in connecting multiple people at a time. All it does via cloud computing. A more convenient and efficient way of traveling, videoconferencing is becoming a preferred way to conduct both one-on-one and group meetings. It allows employees to participate in a more relaxed and comfortable setting, whether they working from on in office. Live video feeds allow participants to interact in real time. Within the enterprise, videoconferencing can also reduce time spent walking between campuses and buildings. Better yet, recent advances in videoconferencing technology make it more appealing and cost-effective than ever.
Enterprise desktop videoconferencing on cloud - in which each user attends the videoconference using his or her business desktop or laptop and a webcam - is a smarter alternative. Such as BYOD (bring your own device) and AWS (alternative work schedule) most firms start using, for cost optimization. For many users, the image and reputation of desktop videoconferencing has been skewed by their audio/video experiences with free Skype and similar products. While Skype performance has improved under Microsoft, especially with the new Xbox One system, which is not, in general opinion, an enterprise-grade product with management controls.
Reasons that video conferencing should move to Cloud:1) Reduce upfront costs; 2) Deliver Flexibility; 3) Provide simplicity; 4) Support a range of devices; 5) Ensure interoperability.
Conclusion
Through our analysis we have observed that cloud computing in entertainment industry has been a disruptive technology and an emergence technology at the same time. It has a huge scope, if not in short term but would definitely be in long run in terms of business profitability and mass target. This is specially because of the potential low cost strategy and the convenience for mass target users and also for the companies and sellers.
While many of us have already heard
about the phrase “Cloud Computing”, as well as the comments from IT experts
that cloud computing presents a strategic opportunity for many different kinds
of businesses as “an engine of growth”, not all have a clear picture of what
actually cloud computing is . In October 2007, IBM and Google announced
collaboration in cloud computing. Soon the term “cloud computing” become
popular. (Chungye G et al, 2010) “The services of cloud computing are broadly
divided into three categories: Infrastructure-as-a-Service (IaaS),
Platform-as-a-Service (PaaS), and Software-as-a-Service (SaaS)” [L.M. Vaquero
et al, 2009]. Cloud computing also is divided into five layers including
clients, applications, platform, infrastructure and servers. Simply speaking, cloud
computing relies on “sharing of resources to achieve coherence and economies of
scale, similar to a utility (like the electricity grid) over a network”. [Peter
M & Timothy G, 2011]
Video: What’s cloud computing
Integrated Advantages of Cloud Computing
1.Increased speed and
flexibility
“The cloud is cheaper, but that isn’t
really what is driving companies into it,” said Greg DeMichillie, the director
of Google’s cloud business for corporations. “They want to be more
experimental, faster, data driven. This is part of a larger change inside
companies.”The cloud is using virtualization and automation to provide users with
self-service computing products that provide infinite scale at low cost.
2.Automatically latest
and greatest update
Cloud vendor renews and updates the
software safely alongside with the business demand which enables companies a
low cost and a large-scale resources of fulfilling their tasks.
3. Adoption is quick and simple
“As mentioned earlier, users access
cloud applications on standard web browsers anytime, anywhere. Using web style
user interfaces, like that of eBay or Yahoo, allows for more widespread
adoption across the company without the need for detailed training.” (Lindsey
L, 2013)
Rapid
Expansion of Cloud
Automation provides self-services, near
infinite scale, utility-based pricing and service. Analysts believe the pace is
picking up across the handful of big tech companies providing cloud services.
“Two years ago, public clouds were maybe 2 percent of all computing workloads,”
said Lydia Leong, a senior analyst at Gartner. “Now they are more than 10
percent. By 2018, it will be more than 50 percent.”
Cloud
Computing-Radical Innovation for Book Industry
Now you probably got a general idea
about cloud computing, but the surprising fact is, many of us use cloud
computing service that providing technological advantages all day long without
realizing it! For example, low price or even free e-books, featherweight
libraries, etc. No matter at school or in the subway, you just need a hand-hold
tablet or mobile device. Have you noticed that, the printed book you once fell
in love with already shifted to digital one, and the sales in bookshop dropped
silently…? There is no doubt that, the
traditional book industry is going through a big revolution emerged by the
storm power of cloud computing technology…
Video: Changing face of publishing industry
Video: Publishing industry evolution
By running the customers’ software
within their own data centers and listening closely to their needs, cloud
companies learn more quickly about customer behavior, figuring out which
incremental improvement they can immediately deploy across their networks. And
then they can turn around and give those customers exactly what they want.Cloud
computing is the result of evolution and adoption of existing technologies and
paradigms.Cloud computing shares characteristics with agility which could
improve with users’ ability to re-provision technological infrastructure
resources, the performance of cloud is monitored and consistent and loosely
coupled architectures are constructed using web services as the system
interface.
Vedio: You would be Surprised how much the global e-Book Industry is Worth
Video: From
Print to 2.0: the Rise of the New Publishing Industry
There are various advantages of cloud
book compared to traditional books.
Space and weight savings:Multimedia
benefits, Depending upon the software support and used formats, non-textual
multimedia can also be embedded into e-book pages as widgets, including
images(and image galleries), videos, audio files and interactive (still or
animated) models; This results in the ability of e-book to offer richer reading
experiences than is possible through traditional, physical books.
Environmental savings:Printed
books use three times more raw materials and 78 times more water to produce
when compared to e-books. However, the manufacture and distribution of e-book
hardware(both the readers and the servers where e-books are downloaded) consume
materials and energy; the disposal of e-readers create electronic waste, and
the storage, distribution, and reading of e-books consumer energy. But this problem
could be solved through cloud computing application into book industry.
Automatic back-up:
Depending on possible digital rights management, e-books (unlike physical
books) can be backed up and recovered in the case of loss or damage to the
device on which they are stored, and it may be possible to recover a new copy
without incurring an additional cost from the distributor, as well as to
synchronize the text, highlights and bookmarks across several devices.
“Electronic books are ideal for people
who value the information contained in them, or who have vision problems, or
who like to read on the subway, or who do not want other people to see how they
are amusing themselves, or who are useless for people who are engaged in an
intense, lifelong love affair with books. Books that we can touch, books that
we can smell, books that we can depend on.”
Is the publishing industry somehow being
destroyed by a combination of Amazon price cutting and a wave of Netflix
watching, iPhone gaming and tweeting? Definitely not, though you might come
away with that ridiculously pessimistic view from some recent coverage trashing
Amazon’s role in the industry. Actually, book sales have risen strongly since
2008, not coincidentally since e-books came on the scene. There’s more than
ever to read-thus people are reading more than ever. In addition, innovations
have changed the way that people interact with each other, except for the
increasingly more readers, but also more writers with disruptive way of
publishing.
Amazon:The
Virtual Book Giant
Well, when the Internet is there so why
the hassle of carrying loads of books in your bag packs or hands. Cloud
computing takes it all. No matter where you are, all you need is Internet
connection to read while the clouds are in your pocket. And Amazon is there to
get you the clouds.
With the emergence of technological
world, the radical transformation of physical books into data, which is
incremental technology and are available anywhere anytime. Amazon works usually
starts with a company occupying the lowest cost, lowest quality part of a
market. That’s precisely what Amazon is doing now: Offering cloud services at
rock-bottom prices. Startups love it, and
everyone from location-based social network Foursquare to document sharing site
Scribed uses Amazon’s
web services (AWS).For pitfalls Amazon should observe how
the companies like HMV failed badly in CD/DVD business for not entering into
the right technology at the right time.
The book industry has long had an uneasy
relationship with Amazon since Kindle’s launch which built Amazon’s e-book
kingdom while triggered a revolution of physical books reading at the same
time. Kindle is Amazon's portable reader that could wirelessly download books,
blogs, magazines and newspapers to a high-resolution electronic paper display
that looks like real paper. Since the first generation of Kindle
released in November 2007 which sold out in five and a half hours and
remained out of stock for five months, Amazon has launched more advanced
versions of Kindle with cheaper price and more function. In addition, Amazon is
also the world’s largest seller and producer of audio books, with close to 600
million listening hours downloaded in 2013. One of its spoken-word programming
called Whispersync for Voice, which allows customers to switch seamlessly
between reading a book on Kindle and listening to the corresponding audio book
on smart phone, is called “Amazon’s new killer app for books” by The Wall
Street Journal.
Vedio: Amazon Kindle Voyage
One of the advantages Amazon offers book
buyers that bookstores don’t is the breadth of selection. Amazon has a wider
selection of books than bookstores. The second advantage is Low Cost Strategy.
The price to purchase a book online is often lower than the cost bookstores
offer. Amazon doesn’t have to pay for store furniture, decorations, floorwalkers,
fancy buildings, etc. With lower operating costs per book and greater volume,
Amazon can keep prices down.
Strategic
Fit Analysis of Amazon’s E-book Business
With the view that Amazon’s resources
and capabilities match the eternal reading demand and growth potential of cloud
computing, Amazon’s e-book business is considered a competitive advantage
of the company.
Business Environment The potential opportunities for Amazon, books on cloud computing is the low cost strategy with no hassle of physical carrying of books. Readers who want to have hands on more than one book at a time have started this technology. In cloud computing finding book in lesser time, can download the books anywhere.
Growing Sales of E-book and E-reader
Introduction of e-book and e-reader, which is fashion, convenient and environmental friendly, has changed people’s reading habits and forced print media and book seller to conform to the new consumer behavior. Based on the huge world-wide demand for literature, increasing demand of e-book and e-reader becomes a global trend. According to industry estimates, e-book share of total book sales has been and will keep growing, which secures a steady stream of income for the company.
Growing Demand for Cloud Computing Services The demand for cloud computing services is expected to grow significantly in the medium to long term. As stated, proportion of public clouds over all computing workloads has been increased rapidly, and spending on public cloud computing services is expected to grow at a compound annual growth rate of 23% during 2013-2017. Growing demand for cloud computing services is considered as an opportunity for Amazon.
Intense Competition in the E-reader Market Competition in the e-reader market is extremely keen as not only the e-reader devices from industry players such as Barnes & Noble and Sony competing for a share in this growing market, but also the tablet including the Apple iPad and Android tablet acts as a substitute for e-reader device. Under such circumstance, price war is inevitable, which depress the price of Amazon’s Kindle series.
Core Competence Leading Position in the E-book Market Amazon has established and maintained its leading position in the e-book market. As of February 2015, there are over 3.2 million e-books available in the Kindle Store. Disregard the dropping selling price, sales of Kindle, as well as the e-books, has always been solid and satisfying, which contributes to Amazon’s earning growth. In addition to its strong research and development ability currently, Amazon’s strong financial performance enables the company to extend product lines and strengthen technical platform through strategic acquisitions. Plus the brand’s reputation, Amazon’s leading position is expected to continue.
Solid Background Operation Support In addition to Amazon’s abundant financial resource, its technology resource is also considered as a competitive advantage of the company. AWS provides a highly reliable, scalable, low-cost infrastructure platform in the cloud that powers hundreds of thousands of businesses in 190 countries around the world. Backup by the solid background operation support from AWS, Amazon’s e-book business could benefit from the increasing demand for cloud computing services with less risks and more profitability, comparing to the case that depends on a third party cloud computing provider.
Business Elite Jeff Bezos, founder and CEO of Amazon, is one of the most important reasons that lead to Amazon’s success. Bezos is a technology entrepreneur who has played a key role in the growth of e-commerce. With solid education background in electrical engineering and computer science, Bezos is sensitive to the business opportunities in information technology industry, proved by the step-ahead move before the boost of internet and cloud computing technology. Bezos once stated in an interview that, companies which innovate within their existing competencies are doomed to fail; innovation means building new competencies. Bezons acts just as what he said, which enables him to find good timing of new product entries, make quick and correct judgments and decisions, to lead Amazon to success.
Porter’s Five Forces Model Analysis for Amazon in E-books Business
1) Degree of existing rivalry: There are few existing competitors with the giant company like Amazon who has huge significant presence in the internet online industry. Amazon has competitive edge in IT sector of cloud computing for the e-books.
2) Threat of potential entrants: There is less chance of potential entrants with Amazon as the setup in IT business what Amazon has it is difficult to build similar huge IT setup.
3) Bargaining power of suppliers: Amazon has an advantage of large selection of books than bookstores.
4) Bargaining power of buyers: Amazon has advantage of having huge chain of customers due to its expanded business.
5) Threat of substitute: There is less chance of substitutes for Amazon due to its expanded business and high presence in market for a long time with huge quantity of customers.
Another
potential opportunity for Amazon in e-books business, there is high flexibility
and multiple players in market. It’s an emerging business for both buyers and
sellers. The following video helps in determining Amazon’s flexibility and the
multiple players who get associated with e-books business.
Vedio: How to self-publish your ebook on Amazon Kindle in 4 minutes
Recommendations
I.We
believe this is the right time for Amazon to expand in the field of cloud computing for e-books. As readers are looking for cost effective and
convenient reading. And the trend of smartphones and tablets has been
increasing and people like carrying tablets and smartphones instead of books so
to perform multiple tasking. Like in one device they can do reading, browsing,
communication, gaming, photography etc.
II.Amazon
should make deal with major big bookstores and should start doing either
mergers or acquisitions with the bookseller companies. This is how they will
expand the online book reading business. As Amazon has good technology setup
both online and cloud computing and it will help the booksellers in setting and
entering in online business.
III.Amazon
should make a flexible, smooth and efficient search engine to search the books.
This would save a lot of time of the readers to search books and maintain their
interest in reading.
10. Chunye Gong, Jie Liu, Qiang Zhang, Haitao Chen and Zhenghu Gong, The Characteristics of Cloud Computing, International Conference on Parallel Processing Workshops, p276. 2010 11. L.M. Vaquero, L.R. Merino, J. Caceres, and M. Lindner, “A break in the clouds: towards a cloud definition,” ACM SIGCOMM Computer Communication Review, v.39 n.1, 2009. 12. Advanced Institute of Management Research, At the Edge of Innovation: Why shifts in the boundaries of innovation matters.
Eastman Kodak Company
("Kodak" or "the Company"), once a leading global giant focused
on imaging for over a century, has become a falling star in the current
decades. The management’s inability to seize the opportunity in digital
photography and inaccurate strategic decision has become a classic example of inexcusable
business failure.
While Kodak was the
industry pioneer to introduce the first digital camera in the world, digital technology
was used as a prop to support Kodak’s film business, misjudged or disregard the
fact that digital photography would replace film in the very near future.
In 1996, Kodak
introduced Advantix Preview film and camera system, which Kodak spent more than
$500M to develop and launch. Display function was added to the digital camera
to enable users to preview their shots, yet it still used film and emphasized
print. Such innovation was not thorough and there was a fatal logical problem,
why should customers buy a digital camera and still pay for film and prints?
It turned out that Advantix Preview was an undisputable technological innovation failure which
led to Kodak’s decades-long decline. In addition to the entire cost in research
and development, Kodak’s lost timing and failure to transform from film to
digital later resulted in billions in losses. By losing this battle, Kodak also
lost its monopoly position in the photography industry.
Focused on Kodak’s Advantix
Preview, we are going to conduct analysis on the key factors which leads to the
failure, and try to give recommendations on what should have been done.
2.Industry
Analysis
Market: From Expansion to Shrink
(Source: CIPA)
Though not perfectly
accurate, global cameras demand trend could still be perceived based on the global
shipment data provided by the Japanese major players. Total demand for cameras
shows overall steady annual growths until the digital cameras launched in the late
1990s, where double digit increase had been recorded almost every year.
However, began with a fluctuation in 2009, consumptions declined significantly and
the year-on-year decreases in the past two years even over 30%, which made the
consumptions of cameras back to the same level in the early 2000s.
Industry: From Traditional Film to Digital Photography
Meanwhile, as
indicated in the above charts, there was a sharp decline in demand of
traditional film camera and printing industry that Kodak used to dominate,
while digital photography was growing rapidly during the past few decades.
Along with the last
Kodak film roll sold to a famous photographer Steve McCurry in 2010, traditional
film era finally came to an end due to the digital photography revolution.
While Kodak film had
been the unique industry leader for more than a century, advent of digital
cameras easily killed the whole traditional film industry with no exception. Threat
of substitutes in the imaging industry can be said extremely high as it is not
only a simple upgrade with lower cost and better performance, but also a
replacement with a brand new system and concept which is fatal and less
possible to turnaround.
Technological
revolution is an eternal theme. Nowadays, widespread usage of smartphone
cameras is again pushing digital camera sales into an unavoidable fall.
Rivalry: From Monopolistic Competition to
Perfect Competition
Dated
back to 1970s when Kodak was the unique industry leader, the Company held about
90% of the market share of photographic film sales and had total
control over the market price.But Kodak's previously stable and solid film
business was then threatened by
the intense competition from the start-ups from Japan like Fuji Film, which
resulted in pressures on pricing and profitability very soon. Especially
when the market changed to digital, competitive rivalry became extremely high because
of the lower entry barriers. In addition to the Japanese camera manufacturers,
the industry was also flooded by entrants with electronic background. In 2010, Kodak’s market share in digital cameras further
declined to 7.4%, far less than the current major players like Canon (19.0%), Sony
(17.9%), Nikon (12.6%) and Samsung (11.1%).
Consumers: From Led to Lead
There is no wonder why
consumers had made a rapid migration to digital, as it enables people to have
much more choices comparing to the traditional film era at the very beginning. Buyer’s
bargaining power has been increasing, as there are
minimal switching
costs because of the keen competition in the market.
What’s more, because of the strengthening green consumption
concept, consumers
tend to prefer to save the photos in soft copy as films and prints are not
biodegradable and cost effective. In addition, growing popularity of
social networking and the trend of sharing images over various platforms have
led to the growth of the digital photography industry. Therefore, it has become
the manufactures’ mission and duty to produce convenience, compact and
user-friendly products to fulfill consumers’ needs and expectations.
(More than you ever wanted to know about APS/Advantix film cameras) Industry analysis conclusion of Kodak Advantix As
the one whom took the lead in the imaging industry previously, Kodak
had been experiencing anembarrassing
situation by its failure to take appropriate pre-emptive action to transform to
digital photography. Introduction and development
of digital technology innovation had brought great changes to the imaging
market. It was not that Kodak did not have sufficient market analysis on this,
but that the management had made wrong decisions and planning for the Company’s
product strategy. Later facts also proved that research and development on Advantix
Preview was totally a disaster which was a waste of time and resource and at
last made Kodak a late mover to the real digital market.
3. Unconsciously Intended to be later adopter Kodak was able to lead the digital camera industry once it had taken the decisive initiative to further dig into the creation of "Rising Star" and audaciously made transformation of the "Cash Cows".
Steve Sasson, the Kodak engineer who invented the first digital camera in 1975, characterized the initial corporate response to his invention this way: "But it was filmless photography, so management's reaction was, 'that's cute--but don't tell anyone about it'."
(Kodak Says “It’s Not Playing Grab Ass Anymore” with digital - in 2007) It was in 1981, around the time that Sony introduced the first electronic camera, one of Kodak’s largest retailer photo finishers asked him whether they should be concerned about digital photography. Thus, Kodak conducted a study to look at the core technologies and likely adoption curves around silver halide film versus digital photography. The result indicted that digital photography had the potential capability to replace Kodak’s established film based business, but it would take some time for that to occur and that Kodak had roughly ten years to prepare for the transition.
(Kodak Advantix Preview Camera COMPLETE TEARDOWN) The problem is that, during its 10-year window of opportunity, Kodak did little to prepare for the later disruption. In 1986, Kodak’s research labs developed the first mega-pixel camera, one of the milestones that Barabba’s study had forecasted as a tipping point in terms of the viability of standalone digital photography. The choice to use digital as a prop for the film business culminated in the 1996 introduction of the Advantix Preview film and camera system, which Kodak spent more than $500M to develop and launch. One of the key features of the Advantix system was that it allowed users to preview their shots and indicate how many prints they wanted. The Advantix Preview could do that because it was a digital camera. Yet it still used film and emphasized print because Kodak was in the photo film, chemical and paper business. Advantix flopped. Why buy a digital camera and still pay for film and prints? Kodak wrote off almost the entire cost of development.
(Kodak Advantix ad (1998) ) In 1989, the Kodak board of directors had a chance to make a course change when Colby Chandler, the CEO, retired. The choices came down to Phil Samper and Kay R. Whitmore. Whitmore represented the traditional film business, where he had moved up the rank for three decades. Samper had a deep appreciation for digital technology. The board chose Whitmore. As the New York Times reported at the time, Mr. Whitmore said he would make sure Kodak stayed closer to its core businesses in film and photographic chemicals.
(Disruptive innovation: The Story of the First Digital Camera) For more than another decade, a series of new Kodak CEOs would bemoan his predecessor’s failure to transform the organization to digital, declare his own intention to do so, and proceed to fail at the transition, as well. George Fisher, who was lured from his position as CEO of Motorola to succeed Whitmore in 1993, captured the core issue when he told the New York Times that Kodak regarded digital photography as the enemy, an evil juggernaut that would kill the chemical-based film and paper business that fueled Kodak’s sales and profits for decades. Fisher oversaw the flop of Advantix and was gone by 1999. As the 2007 Kodak video acknowledges, the story did not change for another decade. Kodak management not only presided over the creation technological breakthroughs but was also presented with an accurate market assessment about the risks and opportunities of such capabilities. Yet Kodak failed in making the right strategic choices.
Digital Camera Global Market Share in Year 2010
Camera Development Timeline:
1727
The discovery that silver nitrate changes
Johann Heinrich Schulz discovered that a substance called silver nitrate would change color when exposed to light. This paved the way for the first pictures to be taken processed.
1814
The camera obscura is developed
Joseph Niepce developed the camera obscura and took the first photo with it. It wasn’t ideal, though, because it took 8 hours of light exposure to make a picture, and the picture faded with time.
1837
The Daguerreotype was invented
Louis Daguerre invented a new way to take pictures. It only needed 30 minutes of light exposure, and the image didn’t fade with time.
1841
Making multiple copies possible
William Henry Talbot developed the Calotype process. This made it possible to make multiple copies of the same picture.
1851
Taking pictures gets easier
With the new Collodion process, cameras only needed a few seconds of light exposure to make a picture.
1871
Film is made easier to handle
Up until this time pictures had to be developed immediately after being taken. Richard Leach Maddox invented the gelatin dry plate silver bromide process, which made it possible to take a picture and develop it later.
1888
The invention of the roll-film camera
George Eastman invented the first roll-film camera.
1948
The Polaroid camera is marketed
The Polaroid allowed people to take a photo and have it developed immediately, right from the camera.
1963
Colored film is introduced
Polaroid came out with the first colored film.
1980
The first consumer camcorder is released
Sony put out the first consumer camcorder, allowing people to record their memories in real time.
1975
The first digital camera is developed
Steve Sasson built the first digital camera.
1984
The first digital camera is marked
Canon put out the first digital camera for the public, which was later improved by Pixar
1990
The first camera phones(1990’s)
The camera phone technology was first used in Japan, but it quickly spread around the world
2001
The Easy Share camera comes into play
Kodak put out their Easy Share digital camera, which made it easy to snap pictures and download them to the computer
2012
Wireless cameras are developed
Kodak put out cameras that didn’t have to be connected to a computer in order to download and share the pictures
4. What Influenced Kodak's choice on Advantix Preview?
Here we use industry the Five
Forces model of Porter that we learned to analyze what influenced Kodak’s
choice about Advantix Preview.
Firstly, we think that rivalry among
competitive providers is extremely intense. The intense rivalry among
providers comes from many different competitors such us Canon, Sony, Nikon in various
photography segments. As we know that the photography equipment industry suffered
a big change at the beginning of the 21st century. According to Khanh. G's research," the
market revenue for film sales, film processing, and traditional film cameras
was declined continuously from $2.97, $6.93 and $1.65 billion in 2000 to $2.86,
$6.68, and $1.21 billion in 2002." (Khanh G, 2009) However, many people would
never forget that Kodak was once the filming selling giant so as the Kodak’s
top management team. They still cannot let go of the gloria history of being
the biggest profit earner in the camera films market. And admittedly, this kind
of phenomenon also exists in many other industries. Under the intense rivalry, Kodak
tried to find a way that could maintain their success of film selling, hoping
that their target customer would not switch to buy the product from their
competitors. In the meantime, to put more interest in creating another “profit
earner” of technological innovation， which could capture the customers’
eyes and helps rescuing the company’s profit margin decline.
Secondly,
the threat from the traditional film camera’s substitutes is pretty strong even
the potential new entrant- digital camera was not introduced to the main market.
Kodak actually was the first entered into digital technologies entry
door, but the top management obviously did not catch this perfectly important
transitional time. Instead, they chose to hide this great invention, telling
their chief engineer that keeping his mouth shut. It’s not hard to figure that
this kind of action comes from the fear of film camera’s substitutes. Top
management knew that their film selling would undoubtedly face the risk of
breaking down once another new technology came out. Advantix Preview turned out
to be the deliration which was born under the risk and fear that provided new
digital photo playback function without abandoning the film usage.
Thirdly, the bargaining power of suppliers
was relatively weak after 21st century, since they gradually moved their manufacturers
from US or other western countries to eastern
countries for film production. Because of the low labor, raw material and
facilities cost of making films and other camera components, Kodak and other
famous brand film camera providers suffered the pressure of reducing the
products’ selling price successively, which urged Kodak’s top management to
come up with some other solutions to save the whole market and slow down the
changing the trend. Therefore, Advantix Preview was expected to be the savior
of Kodak in 1996 consequently.
5) The actual technology global forecast
for Kodak Advantix (APS – Advanced photo system):
Kodak advantix is one of the Kodak’s brand for
advanced photo system which consists of new high-tech cameras and film
processing. It was developed by consortium of five world leading camera companies.
At the time of its launch Kodak faced difficulty to meet the high dealer
demand for the new cameras and films. A wide range of Kodak Advantix products as
follows:
Camera Name FromTo Film
Size Price (US$)
KODAK
ADVANTIX C300 Auto Camera
1998
240
59.00
KODAK
ADVANTIX C400 Auto Focus Camera
1998
240
159.00
KODAK
ADVANTIX C650 Zoom Camera
1998
240
69.00
KODAK
ADVANTIX C700 Zoom Camera
1998
240
189.00
KODAK
ADVANTIX F300 Auto Camera
1998
240
49.00
KODAK
ADVANTIX F600 Zoom Camera
1999
240
129.00
KODAK
ADVANTIX T500 Auto Focus Camera
1998
240
139.00
KODAK
ADVANTIX T550 Auto Focus Camera
1998
240
149.00
KODAK
ADVANTIX 1600 Auto Camera
1997
240
79.95
KODAK
ADVANTIX 2000 Auto Camera
1996
240
99.95
KODAK
ADVANTIX 2100 Auto Camera
1996
240
99.95
KODAK
ADVANTIX 3200AF Camera
1996
240
119.95
KODAK
ADVANTIX 3600ix Camera
1996
240
189.95
KODAK
ADVANTIX 3700ix Camera
1996
240
194.95
KODAK
ADVANTIX 4100ix Zoom Camera
1996
240
229.95
KODAK
ADVANTIX 4700ix Zoom Camera
1997
240
309.95
KODAK
ADVANTIX 5600MRX Text-Date Camera
1996
1997
240
577.20
KODAK
ADVANTIX 5800MRX Zoom Camera
1996
1998
240
429.00
KODAK
FUN SAVER ADVANTIX One-Time-Use Flash Camera
1996
240
19.95
Kodak Advantix Technology forecast inaccuracy:
One of the primary reasons of Kodak advantix
failure was the unpredictability of the camera technology launch time.
Although at the time of it’s launch all the industry experts had an agreed
opinion that digital cameras are the future. But the time when it was launched,
the consumer’s requirement and need were not there. As most of the masses were
using the existing technology and products and not prepared to use this new innovation product
of advanced photo system which was launched on huge scale.
The Advantix with new advanced cameras and films
was founded in 1996 rollout. Kodak has spent around US$ 100 million in its
re-launch in addition of US$ 500 million in its initial launch and it was forecasted that the launch expenses would go even
higher. The Kodak’s management was optimistic about the Advantix products that
it will be huge success in long term. For the re-launch the management had to
rebuild Kodak’s corporate culture. Once possessed nearly a monopoly in film
business, Kodak faced an array of hungry new rivals called Silicon Valley
powerhouse Hewlett-Packard Co., which sees photography as a new market for its
printing technology.
Kodak had gone through huge layoffs in early
1990’s. Layering of thousands of its employees has already shaken the 95,000
workforces in 1997. The company management had brought few outsiders to mix
with Kodak lifers in his inner circle of executives.
Key Company and Industry learning Factors of
Kodak Advantix failure:
Factors that have been identified for Kodak Advantix
failure are listed as follows:
The Kodak Advantix product launch time was not
right, it was launched at the time when it was not needed or required by the
consumers. The technology was so advanced that it was not needed at the time of its launch as the consumers were unaware and highly unexpected of such advanced technology.
After the first failure, the management was
still optimistic in its long-term success and kept spending money. Kodak
Advantix had to be re-launched. For re-launching, the management had to rebuild
the corporate culture.
During the time of failure and re-launching, it
broke the Kodak’s near monopoly and gave chance to the competitors to create
the interest in printing technology and faced strong competition from
Hewlett-Packard.
Since the product failure and re-launching
caused a fear in the current workforce for layering. This would ultimately
effect the employee’s motivation and morale and eventually affect the
performance.
Recommendations of hindsight of failure factors of Kodak Advantix:
Upon analysis at the failure factors of Kodak
Advantix, the recommendations would be as follows:
Although Kodak’s management was optimistic
about the long-term success of the Advantix products. The management should have
identified the consumer’s need of the product and launch the product at the
right time. As they had launched the product technology way earlier when it was
not needed and caused failure. The product technology was way higher than
consumer’s expectation and consumers awareness was not there at the time of
launch. The product should be launch at the time when the consumers were fully
prepared and had awareness of using the technology.
After the product launched and Kodak faced a
great deal of loss which result the failure of Advantix. The management somehow
failed to realize the root cause of the failure and kept their optimism level
high. And they kept spending the money and re-launch the product. The
re-launching was an ultimate failure too. This has resulted the loss of
efforts, time and money. Therefore before launching the technology the
management should have come up with stiff strategic planning and market test
for the product need.
Management should identify that once the
product has been failed and technology is in the market. They should be more
cautious of the competitors. Therefore the Kodak’s management would have come
with even strong strategy how to cater the upcoming competition. The Porter’s
five forces model would be useful to cater this point.
Kodak’s management should have taken the
employees roles into consideration, at the time when they failed for Advantix.
They should use the motivational strategies for their employees not to loose
their moral and kept with high performance.
Kodak management’s inability to
see digital photography as a disruptive technology, even as its researchers
extended the boundaries of the technology, would continue for decades. As late
as 2007, a Kodak marketing video felt the need to trumpet that “Kodak is back “
and that Kodak “wasn’t going to play grab ass anymore” with digital.
References:
1.Khanh Pham Gia. (2009). Case study: Kodak at a crossroads - The transition from film-based to digital photography： 219–234. 2.Vincent Barabba. (2011). The Decision Loom: A Design for Interactive Decision-Making in Organizations: 96-123. 3.Paul B. Carroll, Chunka Mui. (2009). Billion Dollar Lessons: What you can learn from the Most Inexcusable Business Failures of the Last 25 Years: 157-183. 4. The Daily Dow article Tuesday April 16, 1996 5. The Wall Street Journal Article July 25, 1997 6. www.kodak.com
5. Mohanbir Sawhney, Robert C. Wolcott & Inigo Arroniz. (2006). The 12 Different Ways for Companies to Innovate. MIT Sloan Management Review. Retrieved from required readings:
11.Harjani. A. (2014,
November 5). Oh snap! Digital camera market in ‘free fall’. Retrieved 6 March,
2015, from CNBC website:http://www.cnbc.com/id/102153000#.
