Kodak Struggles With Innovating Its Business Model.

Bruce Nussbaum

Of all the forms of innovation out there, surely business model innovation is the most difficult and Kodak's travails show why. The old fllm maker has been trying to make a transition to the future for the past decade, yet every time it gets close, that future changes.

The first shift was to digital cameras from film. The truth is that Kodak makes some of the best digital cameras in the world just won product design awards from the IDSA for them. Kodak innovated in the digital camera space by making it super easy for average consumers to download their digital images.

But the future changed on Kodak. The commoditization of digital cameras went so fast, it couldn't make much money on its cameras. The money was in the service side of imaging and the holy grail now is to create for photos what Apple created for music. A new ecosystem for taking, storing, sharing and managing images. That's the game and Kodak realized that this morning and got out of the product business by outsourcing its great cameras to Flextronics in Singapore.

Kodak isn't alone in striving to build an image ecosystem. HP is moving fast in that direction. So is Apple. Sometimes the future happens slow. Sometimes the future happens fast. Kodak is finding out how fast is fast. You need a corporate culture of innovation to prosper these days. Building one out of an old manufacturing/product culture is really hard.

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