Wednesday, March 05, 2008

Forbes excerpts piece on Kodak from "Strategy and Innovation"

Scott D Anthony describes some of the key elements of "Kodak's Disruptive Bet" on Forbes Online, in a great excerpt from their "Strategy and Innovation" newsletter.

A few of the points should be very familiar to readers of this blog. Virtually the entireity of the Kodak (NYSE EK) marketing efforts for their EasyShare 5300 and related printers and all-in-ones have been literally "all about ink" (to borrow one of their taglines) and have been pushing their lower cost-per-print, while originally at least asking customers to pay more upfront for their printer. But, as I've forwarded in the past and Anthony states here:
Consumers definitely gripe about the high cost of inkjet cartridges. Yet it is unclear whether those high costs actually inhibit home printing, particularly of pictures. Perhaps the complexity of the picture printing process--not the cost of the inputs--stops home-based printing.

And he goes on, again with another argument I buy and have been known to advocate:
Also, Kodak's strategy assumes that consumers consider total ownership costs when making purchasing decisions: Kodak's printers actually cost more than comparable printers offered by HP, Lexmark (nyse: LXK - news - people ) and Canon (nyse: CAJ - news - people ). While corporate purchasers controlling large budgets carefully consider total cost of ownership, it is less clear that multi-year ink purchases factor into consumer purchase decisions.

Anthony continues by including non-printing photo sharing and viewing methods as substitutes to hard copy, including through popular Internet methods as well as photo frames. (See "Digital Photo Frames -- Printer friend or foe?")

Also put forth is the competitive response by HP (NYSE HPQ) to Kodak's "cheap ink" -- a lower-priced cartridge with a much lower quantity of ink -- effectively a price increase!

Great reading!

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