Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging Harvard Case Solution & Analysis

Some technology transitions are extremely difficult for incumbent firms to execute. The bankruptcy filing by the Eastman Kodak Company emphasized the difficulty businesses face when their core business transitioned from an analog to a digital world. Kodak's company was built on the sale of a sophisticated manufactured merchandise - color photographic film which was exceptionally difficult to make - with correspondingly high barriers to entry. Its colour film and paper products comprise the Kodachrome and Kodacolor maintained a number of the iconic pictures of the past century.

Starting in the 1990s, the company established a digital photography business, yet by 2012 the firm was in reorganization and its prognosis was guarded. Why was an analog to digital transition in the core technology of a company especially challenging? This note reviews a number of the direction research on how firms have to do with technology transitions, and then describes the conversion of a technology from analog to digital is uniquely problematic. Is the same challenge facing companies like Panasonic and Sony, telecom equipment companies, and other businesses now the underlying technology through which products and services are assembled has altered. This note describes why such issues are experienced by incumbent companies like Kodak, Sony, and Panasonic, and discusses technical details of the transition from analog to digital technology.

PUBLICATION DATE: August 13, 2012 PRODUCT #: 613024-PDF-ENG

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