The Key Differences Between De Beers Old And New Business Model

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Kodak’s main strategy in this period was to avail to their customer’s high-margin film referred to as the razor blade strategy. This strategy involved Kodak’s development of inexpensive cameras as a way to an end: the company had the objective of facilitating lucrative film sales. In a heart shell, the invention of the digital camera was held back due to management’s worries about the negative effects on film sales. Nonetheless, the developmental dependencies on many other industries were extremely high as microprocessors, advances in electronic storage, and various communication soft wares for the camera and digital data transfer, soft wares for image processing, etc. Microelectronics was a problem for the company during the implementation of its strategy. However, the strategies that the company employed failed. Normally in a perfect market whenever disruptive technology exists, companies always fail to capitalize on the invention of the day for fearing cannibalizing current product sales. For instance, in 1981 when Sony introduced a filmless digital camera into the market, panic permeated Kodak company‘s executive suite. Explicitly, over the next years, the company invested about $5 billion in digital imaging. Through estimation, this was approximately 45% of the company’s Ramp.D budget. Sadly, with disruptive technologies like digital cameras, whenever a company becomes the first-mover it has a lot of advantages and others who follow suit find it very difficult to overcome the competition. The strategy failed since by the time the company realized that their razor-blade strategy was not workable. the lions were by now out of the barn. Kodak was not able to match the competition.