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Kodak VS Dyson

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Sara Ciapponi

on 3 December 2014

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Transcript of Kodak VS Dyson

Analysis
A short introduction
Kodak / Dyson
Eastman Kodak Company
Founded in
1880
by
George Eastman;
the company originally produced dry plates.
In
1885
Eastman invented the
roll film

1890 first
release of a
Kodak

camera
. The idea was to make
photography accessible to everyone.
Kodak's Sales hit $10 billion in 1981.
Kodak successfully dominated the industry it created for more than a century in 2000 it still had 80% of the film market share
In
2000
Kodak
sales
began a
rapid decline

In
2012
Kodak filed for
bankruptcy
protection

Dyson Ltd
British business operating in over 70 countries

Founded by
James Dyson
in
1993

Its first major success was the
DC01
due to its use of
cyclone technology

High market shares in UK, Australia and the US

Dyson has become known for a number of other differentiated products over the years.


What went wrong with Kodak?
Razor and blade strategy
attract costumers with
low cost cameras
and make profits on
higher priced films and prints
.

The
digital photography
(filmless technology) represented a
serious threat
for this sale strategy

By
1981
Kodak was aware that in ten years
digital may replace films



Kodak

prepared very little
and tried to protract the usage of films as long as possible

Kodak didn't want to take the risk of giving up on a profitable business to enter a new developing one and this determined the major part of its failure.

Key Turning Points for Dyson
Breaking into the
UK market
in
1993

Comet in
1995


Constantly innovating

Diversification into new markets:

Hand Dryer
(2006)

Bladeless Fan
(2009)


Key Turning Points for Kodak
Management vs Management
Kodak's Management Failure
What are we going to look at
There are three main points we are going to focus our presentation on:

Why those holding Kodak shares and pensioners have sustained huge losses in recent years and why those who helped Dyson are now super-rich?

The key turning point in the recent histories of Kodak and Dyson and the impact of these on the fate of the companies

What management lessons can be learned from Kodak and Dyson' s experiences?
"Take everyday products that don't work well and make them work better"
Freedom in a creative Industry
Investment and Diversification
"Truly original ideas come to life when people dare to be different. It's a combination of inventive engineering, passion for technology and brave design" (Dyson, 2014)
"The most fascinating times at Dyson are the daily challenges of innovation. The constant search for new ways of doing things is what leads to new technologies like the bladeless fan."
Frédéric Nicolas
Senior Fluid Dynamics Engineer
Research & Development
Kodak's investments and the impact of technology
Not all success for Dyson
Engineers and Innovators
Rigid management techniques

Clear Hierarchical structure
In
1900
the
Brownie Camera
was introduced . This is considered the starting point for low cost and mass accessible photography

The introduction of the new
CD-ROM storage
of photographs in
1990-

"
The product never achieved the success Kodak had forecasted
"- How Kodak missed the Digital Revolution.

In
1975
Kodaks R&D engineer Steve Sasson invented the
digital camera
.
"Well, you'd be suprised at some of the breakthroughs and innovations that Kodak was doing" - Steve Sasson
Founded on the culture of
change

and

innovation
as it
grew
became
more and more rigid

"
It was so hierarchically oriented that everybody looked at the guy above him for what needed to be done
" - G. Fisher, CEO of Kodak
Despite having all the possibilities to dominate the digital revolution the company was full of
complacency
: G. Fisher himself had to face a
backward-looking environment
,
resistant to change
and with an
exaggerated opinion of itself

"At Kodak we don't worry about the market, we are the market"
- fellow member of the Rochester Jaycees, 1970


Kodak choose the
rational model of management
(
slow change, little uncertainty, low risk
)
in
a constantly changing environment as
the technology sector
their management strategy wasn't suitable to keep up with the constant evolution and innovation the sector requires

In
1965
Kodak
stopped
the production of the
35mm cameras
just when it was about to explode in popularity.

Kodak tried to diversify into the
drug and household industry

without
any
previous experience
, leading to a series of
wrong investments
.

Kodaks
CD Picture Storage
in 1990 was a
failure
.

Kodak
never developed
an
amateur inkject printer
, for many years it relied on
printing kiosks
in retail stores missing the opportunity of diversifying into the printer market

In
1997
, when the digital technology was about to explode Kodak invested 1 billion dollars in a
new film plant in China.

Washing Machine: "
The Contrarotator
"
Production moved to
Malaysia
"As a washing machine, it was a great success. As a business, it wasn’t. We made a washing machine that was too expensive; it had too much technology." (Dyson, 2012)
"Making this washing machine was the most wonderful educative failure. Success is not always as enjoyable as you might think. When something’s a success, the results are clear. Failure is an enigma. You worry about it, and it teaches you something.” (Dyson, 2012)
Dyson Robot: "The Dyson 360 Eye", set apart by its unique camera system
Dyson's Future
Advertisement
Kodak's advertisement campaign initially suited the target market perfectly,
making photography accessible to the masses.

The image of the '
Kodak Girl
' connotes
simplicity
and
accessibility
while also holding an element of
desirability
.
Kodak
changed
its
brand logo
through the years maintaining interest and the notion that
Kodak
was a
current

brand

despite
its
age
.
Kodak failed to keep up with technological advancement, as revealed in their desperate
promotion of 'preservation'
and viewing pictures from a wall instead of from a computer.
Technology, Investment and Diversification
Advertisement Dyson
Focus on what makes them different
Dyson advertises to promote its focus on ingenuity and the ability to be better than the competition.
Its unique selling point is it's engineering and how it makes its products.
Management
Advertisement
Kodak's Future
Kodak's future seemed non- existent; the company filed for bankruptcy on January 19th 2012
The company sold its digital imaging patents for $525 million.





Now, Kodak is negotiating with movie studios for an annual film order guarantee.
Overall Kodak has won 9 Oscars for their contribution to film.
Companies' future


Conclusion
Those holding Kodak shares and Kodak pensioners have sustained huge losses due to the great decline of Kodak's Profitability and market share.
A key turning point in Kodak's recent history was certainly the fact that they missed the digital revolution together with the failure of Photo CD system as it made them even more risk and technology adverse.
Kodak's failure reveals that a rigid hierarchical structure is not always the way to successfully run a business.
Dyson Company keeps growing and the profit of a company is increasing and of course those who helped Dyson are very rich now
The key turning point in Dyson's recent history is a movement of the whole production to Malaysia
From Dyson's management experience it can be learnt that a big company must take risks in order to be successful
Key to Dyson's success

Dyson uses
failure to drive success
Creating lots of
prototypes
Dyson is
not afraid to take
a
risk

Most inventions in Dyson are based on
personal inspiration
Enormous investments in
Research and Development
James Dyson emphasizes
unusual aspects
Dyson has over 1900
patents
worldwide
Takes an advantage of
globalization




"
It was filmless photography so managements reaction was 'that's cute - but don't tell anyone about it'
" - Steve Sasson, the Inventor of the Digital camera.
Dyson does not believe in the term "Branding"
The business is only as good as it's product
Never advertises as the cheapest, they advertise that they are the best at what they do
Investing £250 million to expand the the company headquarters which will create 3,000 jobs

Randall, R.., 2011. Kodak’s failure to exploit its digital edge is a lesson on complacency. Central Penn Business Journal, pp. 15.
The Death Of Scale: Is Kodak's Failure An Omen Of Things To Come For Corporate America? - Forbes. 2014. The Death Of Scale: Is Kodak's Failure An Omen Of Things To Come For Corporate America? - Forbes. [ONLINE] Available at: http://www.forbes.com/sites/avidan/2013/08/20/the-death-of-scale-is-kodaks-failure-an-omen-of-things-to-come-for-corporate-america/.
Barriers to Change: The Real Reason Behind the Kodak Downfall - Forbes. 2014. Barriers to Change: The Real Reason Behind the Kodak Downfall - Forbes. [ONLINE] Available at: http://www.forbes.com/sites/johnkotter/2012/05/02/barriers-to-change-the-real-reason-behind-the-kodak-downfall/.
Paul Snyder, 2013. Is This Something George Eastman Would have Done?: The Decline and Fall of Eastman Kodak Company. Edition. CreateSpace Independent Publishing Platform.
Offerte basse per il tesoro di Kodak. Domani inizia l'asta. Apple e Microsoft contro Google e Samsung - Il Sole 24 ORE. 2014. Offerte basse per il tesoro di Kodak. Domani inizia l'asta. Apple e Microsoft contro Google e Samsung - Il Sole 24 ORE. [ONLINE] Available at: http://www.ilsole24ore.com/art/tecnologie/2012-08-07/offerte-basse-tesoro-kodak-102820.shtml?uuid=AbKISnKG
Kodak, l'azienda che invent� la fotografia per tutti - Il Sole 24 ORE. 2014. Kodak, l'azienda che invent� la fotografia per tutti - Il Sole 24 ORE. [ONLINE] Available at: http://www.ilsole24ore.com/art/economia/2012-01-19/luomo-invento-fotografia-tutti-133604.shtml?uuid=AaLmq2fE.
Kodak risorge: fuori dal Chapter 11 entro l'estate (senza pi� le pellicole) - Il Sole 24 ORE. 2014. Kodak risorge: fuori dal Chapter 11 entro l'estate (senza pi� le pellicole) - Il Sole 24 ORE. [ONLINE] Available at: http://www.ilsole24ore.com/art/finanza-e-mercati/2013-05-02/kodak-risorge-fuori-chapter-161019.shtml?uuid=AbxbRSsH.
Kodak stoppa la produzione di fotocamere e apparecchi digitali - Il Sole 24 ORE. 2014. Kodak stoppa la produzione di fotocamere e apparecchi digitali - Il Sole 24 ORE. [ONLINE] Available at: http://www.ilsole24ore.com/art/tecnologie/2012-02-10/kodak-stoppa-produzione-fotocamere-165329.shtml?uuid=Aax37upE
Lucas, H.C and Gh, J.M (2009) Disruptive technology: How Kodak missed the digital Photography Revolution. Journal of Strategic Information Systems 18. pp. 46 - 55.
Gavetti, G. Kodak: Interview with Dr. George Fisher (DVD). HBS publishing.
Christensen, C. (1997) The Innovators Dilemma: When New Technologies Cause Great Firms to Fail. Harvard Business School Press.
Mui, C. (2012) How Kodak failed. Forbes. http://www.forbes.com/sites/chunkamui/2012/01/18/how-kodak-failed/
Carruthers, I, 2007. The domestic engineer: how Dyson changed the meaning of cleaning, Cyan Communications
(2014)
Vacuum Cleaners in the United Kingdom
[online], Available: http://www.euromonitor.com/vacuum-cleaners-in-the-united-kingdom/report [29th Oct 2014]
Burn- Callender, R. (2012)
Dyson hoovers up £1bn in revenue
[online].Available: http://www.managementtoday.co.uk/news/1148936/ [29th Oct 2014]
Finch, J (2010)
Dyson's profits rise to £190m
[online]. Available: http://www.theguardian.com/business/2010/may/26/dyson-profits-rise [30th Oct 2014]
Arnott, S (2010)
Dyson's profits double thanks to R&D investment
[online]. Available: http://www.independent.co.uk/news/business/news/dyson-profits-double-thanks-to-rd-investment-1983841.html [30th Oct 2014]
Wallop, H. (2009)
James Dyson's latest invention: bladeless fan
[online]. Available: http://www.telegraph.co.uk/technology/news/6306352/James-Dysons-latest-invention-bladeless-fan.html [30th Oct 2014]
Kelion, L (2014)
Dyson robot vacuum cleaner revealed in Japan
[online] Available: http://www.bbc.co.uk/news/technology-29055181 [21st Oct 2014]
Dowling, S (2013)
Frustration and failure fuel Dyson's success
[online] Available: http://www.bbc.com/future/story/20130312-failure-is-the-best-medicine [22nd Oct 2014]
Goodman, N (2012)
James Dyson on using failure to drive success
[online] Available: http://www.entrepreneur.com/blog/224855 [19th Oct 2014]
BBC (2012)
Dyson sales and profits boosted by US and Japan
[online] Available: http://www.bbc.co.uk/news/business-19515485 [20th Oct 2014]
Priced at £1,000 but production was stopped in 2005
Businessman v's The Engineer
800 Job Losses in the UK
Dyson management style
Flat organizational structure
- the one with few or no levels of middle management between staff and executives

Sir James Dyson prefers
direct communication
with his employees

He is a very
democratic
manager.
"We don’t have technicians, so engineers go and make their own prototypes and rigs. Letting people try out their ideas, getting them totally involved, that’s really important"
By capitalising on the
Christmas holiday
Kodak used
emotional marketing techniques
and celebrity endorsement to attract consumers.
Two different management styles:
Kodak:
machine metaphor
Dyson:
garden metaphor
Full transcript