The Wharton School, U. of Pennsylvania, United States
Kodak’s failure to transition from film to digital photography has become a canonical example of a dominant incumbent failing in the face of an industry transition. We undertake a systematic examination of Kodak’s pursuit of digital photography from the 1970s to the 2000s. Contrary to popular accounts, Kodak made early and substantial investments in digital technology, pioneered advances, and commercialized multiple award-winning products that pushed the technological frontier. However, its technological and market leadership did not translate into commercial success because the value creation in digital photography was held back by the innovation challenges in the surrounding ecosystem. Accordingly, we offer an account of an incumbent during periods of technological change that goes beyond the internal inertia processes to consider external ecosystem challenges.
