Skip to main content
Select Source:

Eastman Kodak Company

Eastman Kodak Company

343 State Street
Rochester, New York 14650
U.S.A.
Telephone: (716) 724-4000
Fax: (716) 724-1089
Web site: http://www.kodak.com

Public Company
Incorporated:
1901
Employees: 80,650
Sales: $14.09 billion (1999)
Stock Exchanges: New York Pacific Boston Cincinnati Detroit Midwest Philadelphia
Ticker Symbol: EK
NAIC: 325992 Photographic Film, Paper, Plate, and Chemical Manufacturing; 333315 Photographic and Photocopying Equipment Manufacturing; 325411 Medicinal and Botanical Manufacturing; 325414 Biological Product (Except Diagnostic) Manufacturing; 334119 Other Computer Peripheral Equipment Manufacturing; 334510 Electromedical and Electrotherapeutic Apparatus Manufacturing; 511210 Software Publishers

A multinational corporation whose name and film products are familiar to photographers around the world, Eastman Kodak Company is a diversified manufacturer of equipment, supplies, and systems in consumer and professional imaging, including films, photographic papers, one-time-use and digital cameras, printers and scanners, photoprocessing services, photofinishing equipment, and photographic chemicals. The companys health imaging unit specializes in products and services for radiography, cardiology, dental, mammography, oncology, and ultra-sound imaging. Other Kodak products include motion picture films, audiovisual equipment, microfilm products, and optics and optical systems.

Late 19th-Century Origins: Photography for the Masses

The company bears the name of its founder, George Eastman, who became interested in photography during the late 1870s while planning a vacation from his job as a bank clerk in Rochester, New York. Taking a coworkers suggestion to make a photographic record of his intended trip to Santo Domingo, the 24-year-old Eastman soon found that the camera, film, and wet-plate-developing chemicals and equipment he had purchased were far too bulky. Instead of following through with his original vacation plans, Eastman spent the time studying how to make photography more convenient. He discovered a description of a dry-plate process that was being used by British photographers. He tried to replicate this process in his mothers kitchen at night after work.

After three years Eastman produced a dry glass plate with which he was satisfied. In 1880 he obtained a U.S. patent for the dry plate and for a machine for preparing many plates at one time, and he started manufacturing dry plates for sale to photographers. Henry A. Strong, a local businessman impressed by Eastmans work, joined him on January 1, 1881, to form the Eastman Dry Plate Company. Eastman left his position at the bank later that year to give his complete attention to the new company.

The new venture almost collapsed several times during its early years because the quality of the dry plates was inconsistent and Eastman insisted that the defective plates be replaced at no charge to the customer. Despite these setbacks, he was deter-mined to make the camera as convenient as the pencil.

As his business grew, Eastman experimented to find a lighter and more flexible substitute for the glass plate. In 1884 he introduced a new film system using gelatin-coated paper packed in a roll holder that could be used in almost every plate camera available at that time. Also that year, the company was reorganized as Eastman Dry Plate and Film Company. Strong was president and Eastman treasurer and general manager of the 14-shareholder corporation. The company also opened a sales office in London in 1885 to take advantage of the growing European photography market.

In 1888 Eastmans company introduced its first portable camera. Priced at $25, it included enough film for 100 pictures. After shooting the roll of film, the owner sent both the film and the camera to Rochester for processing. For $10, the company sent back the developed prints and the camera loaded with a new roll of film. This breakthrough is considered to be the birth of snapshot photography. It was also at this time that Eastman trademarked Kodak, which he invented by experimenting with words that began and ended with his favorite letter, K. The company advertised its new camera extensively using the slogan, You push the button, we do the rest.

The following year, the Eastman Photographic Materials Company was incorporated in the United Kingdom to distribute Kodak products outside the United States from its headquarters in London. The company built a manufacturing plant in 1891 outside London to accommodate the growing product demand overseas and set up additional distribution sites in France, Ger-many, and Italy by 1900. In 1889 the firms name was changed to Eastman Company and in 1892 to Eastman Kodak Company of New York.

Eastman was committed to bringing photography to the greatest number of people at the lowest possible price. As his company grew and production of both the camera and film increased, manufacturing costs decreased significantly. This allowed the firm to introduce a number of new cameras, including the Folding Pocket Kodak Camera, the precursor of all modern roll-film cameras, in 1898. It also brought out the first of a complete line of Brownie cameras, an easy-to-operate model that sold for $1 and used film that sold at 15 cents per roll, in 1900. The following year, the company was reorganized and incorporated in New Jersey as Eastman Kodak Company.

1900s Through 1960s: Continuing New Product Success

Over the next 20 years, the company continued to introduce photographic innovations. In 1902 Kodak brought to market a new developing machine that allowed film processing without benefit of a darkroom. The 1913 introduction of Eastman Portrait Film provided professional photographers with a sheet film alternative to glass plates.

In 1912 George Eastman hired Dr. C.E. Kenneth Mees, a British scientist, to head one of the first U.S. industrial research centers. Based in Rochester, New York, this lab was where various tools and manufacturing processes that provided the company with a continuing stream of new products in the 1920s were invented. These new productswhich included 16-millimeter Kodacolor motion picture film, the 16-millimeter Cine-Kodak motion picture camera, and the Kodascope projector (all of which debuted in 1923)were targeted at the mass market and priced appropriately.

Kodak developed other new products to support the countrys involvement in World War I. In 1917 the company developed aerial cameras and trained U.S. Signal Corps photographers in their use. It also supplied the U.S. Navy with cellulose acetate, a film product, for coating airplane wings, and produced the unbreakable lenses used on gas masks. Following the war, Eastman became president of the company upon Strongs death in 1919.

George Eastman had always been civic-minded; even as a struggling bank clerk he donated money to the Mechanics Institute of Rochester. As Kodak grew, his philanthropy extended to such institutions as the Massachusetts Institute of Technology, the Hampton and Tuskegee Institutes, and the University of Rochester. He was instrumental in starting numerous dental clinics around the world, and he enjoyed a reputation as a paternalistic employer because of his profit-sharing programs and insurance benefits for workers. In 1932 George Eastman committed suicide at the age of 77, leaving a note that read, To my friends. My work is done. Why wait? G.E.

That same year, the company introduced the first eight-millimeter motion picture system for the amateur photographer, consisting of film, cameras, and projectors. Three years later, it made available 16-millimeter Kodachrome film, the first amateur color film to gain commercial success. Similar film products for 35-millimeter slides and eight-millimeter home movies were introduced in 1936.

New photographic products continued to be introduced over the next decade, even as the company devoted a portion of its manufacturing capability to the production of equipment and film for the military during World War II. Following the war, Kodak focused its total attention once again on amateur photography with the introduction of a low-priced Brownie eight-millimeter movie camera in 1951 and the accompanying projector one year later.

In 1953 the company formed Eastman Chemical Products, Inc. to market alcohols, plastics, and fibers for industrial use. These substances were manufactured by Tennessee Eastman Company and Texas Eastman Company, two subsidiaries that had been formed in 1920 and 1952, respectively. The company had begun to manufacture these items because of its own use of chemicals in film manufacturing and processing.

Until this point, the company had always included the cost of film processing in the cost of film. A consent decree filed in 1954 forced Eastman Kodak to abandon this practice, but it also provided an opportunity for the company to serve a new market, independent photofinishers, with its film developing products. Kodak acquired several photofinishing laboratories, including Fox Photo and American Photographic Group, to form an independent joint venture known as Qualex with Colorcraft Corp., owned by Fuqua Industries.

By 1958 the company had made significant advances in 35-millimeter color slide technology and introduced the first completely automatic projector, called the Kodak Cavalcade. A line of Kodak Carousel projectors introduced three years later be-came highly successful.

Company Perspectives

On February 2, 2000, exactly 100 years from the day George Eastman introduced the Brownie camera, a group of Kodak researchers, inventors and business strategists met at the companys Rochester headquarters to speculate on what the next 100 years might bring to their industry. All agreed that the true power of imaging has barely been tappedand that the advances of this century will vindicate Eastmans dream of making communicating with pictures as easy as using a pencil.

In 1963, one year after astronaut John Glenn had used Kodak film to record his orbit of the earth, the company introduced the Instamatic camera. Using a film cartridge instead of film roll, the Instamatic revolutionized amateur photography and became a commercial success because it was easy to use. Two years later, Kodak brought out a similar cartridge system for super-eight format Instamatic movie cameras and projectors. In 1972 five different models of a pocket version of the Instamatic camera were launched and proved immediately popular. The following year, the company acquired Spin Physics, a San Diego, California-based producer of magnetic heads used in recording equipment.

1970s Through Early 1990s: Diversifying and Losing Ground Amid Increasing Competition

In the early 1970s, Eastman Kodak became the defendant in a series of antitrust suits filed by several smaller film, camera, and processing companies. These legal actions alleged that Kodak illegally monopolized the photographic market. The most widely publicized suit, filed by Berkey Photo, charged that Kodak had violated the Sherman Anti-Trust Act by conspiring with two other companies, Sylvania Companies, a subsidiary of GTE Products Corporation, and General Electric Company, to develop two photographic flash devices. Berkey requested that Eastman Kodak be divided into ten separate companies and asked for $300 million in damages. The case was settled in 1981 for $6.8 million.

In 1975 Kodak introduced the Ektaprint 100 Copier-Duplicator, putting itself into direct competition with two firmly entrenched rivals, Xerox Corporation and International Business Machines Corporation. Kodak considered this market to be a good fit with its existing microfilm business. In addition, the company had already established a foothold with a similar product, the Verifax machine, which had been introduced in 1953. This copier used a wet process like that used in photography, but it had become obsolete when Xerox introduced a technological advancement called xerography, which was less messy and produced better quality copies than previous systems. After careful research and planning, the Ektaprint copier was developed to serve businesses with large-scale duplicating needs. Not only could the Ektaprint produce numerous copies at high speed, but it could also collate them while duplicating, a unique feature at the time.

Key Dates

1880:
George Eastman begins manufacturing dry plates for sale to photographers.
1881:
Eastman and Henry A. Strong form partnership, Eastman Dry Plate Company.
1884:
Company is reorganized as a corporation under the name Eastman Dry Plate and Film Company.
1888:
Snapshot photography is born through the introduction of the Kodak portable camera.
1889:
Name changes to Eastman Company.
1892:
Name changes to Eastman Kodak Company of New York.
1898:
The Folding Pocket Kodak Camera is introduced.
1900:
The Brownie camera makes its debut.
1901:
Company is reorganized and incorporated in New Jersey as Eastman Kodak Company.
1912:
One of the first U.S. industrial research centers is set up in Rochester, New York.
1920:
Tennessee Eastman Company, forerunner of Eastman Chemical, is created.
1923:
Company introduces motion picture camera, film, and projector for the consumer market.
1932:
George Eastman commits suicide at the age of 77.
1935:
Kodachrome film, the first commercially successful color film for amateurs, debuts.
1951:
Low-priced Brownie eight-millimeter movie camera is introduced.
1953:
Eastman Chemical Products, Inc. is created as a new subsidiary.
1961:
Highly successful line of Kodak Carousel slide projectors is introduced.
1963:
The revolutionary Instamatic camera makes its debut.
1965:
Company introduces the super-eight format Instamatic movie camera.
1972:
The pocket Instamatic camera is launched.
1975:
Company enters the copier market with the debut of the Kodak Ektaprint 100 Copier-Duplicator.
1976:
Kodak enters the market for instant cameras; Polaroid files patent-infringement suit against Kodak.
1980:
Company expands its health imaging operations with the launch of the Ektachem 400 blood analyzer.
1982:
Company launches disc photography, an ultimately unsuccessful innovation.
1984:
Lines of videotapes and floppy discs are introduced.
1985:
Floppy disc maker Verbatim Corporation is acquired.
1986:
A federal appeals court orders Kodaks exit from the instant camera market; a line of alkaline batteries under the Supralife brand is launched; Eastman Pharmaceuticals Division is established.
1988:
Sterling Drug Inc., maker of prescription and OTC drugs, is acquired.
1990:
Verbatim is sold to Mitsubishi Kasei Corporation.
1991:
Polaroids suit against Kodak is settled, with the latter paying the former $925 million.
1992:
The Kodak Photo CD player hits the market.
1993:
George Fisher becomes the first outsider to head the company; Eastman Chemical is spun off to shareholders.
1994:
The companys pharmaceutical arm, Sterling Winthrop, its diagnostics products division, and several other nonimaging units are divested.
1997:
The WTO rules against Kodak in its dispute with Fuji Photo Film over access to the Japanese market; major restructuring is initiated.
1998:
Kodak Picture Maker debuts; company acquires the DryView laser imaging system from Imation.
1999:
The office imaging unit is sold.

In 1976 Kodak took on another well-established firm when it challenged Polaroid Corporations 30-year lock on instant photography with a new line of instant cameras and film that developed pictures outside the camera within a few minutes. Kodak had missed an opportunity to get in on the ground floor of this technology in the 1940s when it declined an offer to market an instant camera invented by Polaroid founder Edwin Land. The general feeling among Kodaks management at the time had been that Lands camera was a toy and the quality of its pictures not up to the companys accepted standards. Kodak had, however, also gained from Polaroids success. It had become the exclusive supplier of negatives for Polaroids instant, pull-apart color film in 1963. In 1969 Polaroid elected to take over this part of its film manufacturing itself. At the same time Polaroid cut prices drastically to bring its instant cameras more in line with the Kodak Instamatics. Kodak was convinced that Polaroids instant photography products posed a threat to the companys market leadership. But the companys methodical product-development process, which emphasized long-term product quality over quick market entry, as well as Polaroids ownership of hundreds of related patents, proved to be major obstacles to an immediate competitive response. When Kodak finally introduced its own instant camera four years after the decision was made to develop it, the company was plagued by production problems and a near-instant Polaroid lawsuit alleging patent infringement. Although the company captured about 25 percent of the U.S. instant camera market within its first year, reports of quality flaws with the cameras instant photographs and Polaroids response with another new instant camera stifled sales. Polaroid successfully exploited the business applications of instant photographyidentity cards, for exampleand retained its strong position in the market.

During this period, Kodaks president and CEO, Walter A. Fallon, and chairman, Gerald B. Zomow, oversaw product development. When Zomow retired in 1977, Fallon assumed the chairmanship and was succeeded as president by Colby H. Chandler. Employed with Kodak since 1941, Fallon had worked his way up from production to direct the U.S. and Canadian photographic division. He had been responsible for the launch of the pocket Instamatic camera line. Chandler had joined the company in 1951 and, as Fallons successor in the U.S. and Canadian photographic division, he was directly responsible for both the instant camera and the Ektaprint copier.

Upon becoming president, Chandler faced a challenge to Eastman Kodaks dominance in the photographic paper market from several Japanese competitors and U.S. suppliers, including Fuji Photo Film Co., Ltd. and 3M Company. These firms undercut Kodaks prices for a paper product of similar quality. Fuji also had the advantage of competing against a strong U.S. dollar, a factor that conversely reduced Kodaks profits significantly in foreign markets. The company responded with price reductions of its own, but suffered lower earnings and a decreasing level of investor confidence. Losing the title of official film of the 1984 Summer Olympics to Fuji added further insult to injury.

As the U.S. economy entered a recession in the late 1970s and sales growth in the companys consumer photographic products slowed, higher sales in other areas such as chemicals, business systems, and professional photofinishing pushed pro-fits upward once again. Several prior years of flat earnings across product areas were attributed in large part to a lack of strategic planning. At the end of 1978 company operations were reorganized to consolidate the U.S., Canadian, and international photographic areas into one division. The companys first director of corporate planning also was hired to speed the product development process and institute the controls needed to enable new products to become profitable more quickly.

The year 1980 marked the companys 100th anniversary. That year Kodak introduced the Ektachem 400 blood analyzer. This entry into the health sciences field represented a natural application of the companys film manufacturing technology and reinforced its already strong presence as a supplier of X-ray film to hospitals and other healthcare facilities.

During the 1980s the company faced intensifying Japanese competition in photography and a continuing decline in product demand. Rapid technological breakthroughs by other firms threatened to replace Kodaks core product line with more advanced equipment. The company instituted several measures to improve its performance. These included a stronger emphasis on nonphotographic products with high profit potential, a more aggressive approach to protecting its chemical imaging capabilities, a broader international marketing strategy, and a sharper focus on making acquisitions to bring the company up to speed technologically, particularly in electronics.

In 1981 the company purchased Atex, Inc., a major supplier of electronic text editing systems used by publishers. Formed as an entrepreneurial venture in 1972 and the leader in its field at the time of the acquisition, Atex later lost ground to fast-changing computer technology as Kodaks traditionally slow-moving product development process was unable to keep pace with the industry.

Despite its shift in priorities to other areas, Kodak continued to support its bread-and-butter line of photographic products. In 1982 it introduced a line of small cameras that used film discs instead of cartridges and was considered a replacement for the pocket Instamatic camera.

Since the companys founding, Kodak had maintained a policy of treating its employees fairly and with respect, earning the nickname of the Great Yellow Father. It was George Eastmans belief that an organizations prosperity was not necessarily due to its technological achievements, but more to its workers goodwill and loyalty. As a result, company benefits were well above average, morale had always remained high, and employees never felt the need to unionize. This protective culture came to an end in 1983, however, when the company was forced to reduce its workforce by five percent to cut costs. Competitive pressures from the Japanese and domestic and international economic problems had slowed product demand. Even the widely publicized disc camera failed to sustain its initial hot sales rate.

Upon Fallons retirement in 1983, Colby Chandler took over as chairman and, in an attempt to keep up with the pace of change, pointed Kodak toward the electronics and video areas in earnest. During the 1970s the company had brought out products that either lacked quality or important features, or arrived too late on the scene to capitalize on new opportunities. Of all the products introduced during Fallons tenure, only the Ektaprint copier was considered a success, although it gradually lost its marketing advantage to competitive offerings with greater speed and more features. Neither the instant nor the disc cameras had met original expectations. The companys X-ray film business also took a beating as hospital admissions dropped and attempts by medical institutions to control costs increased.

The companys new electronics division consisted of its Spin Physics subsidiary, a solid-state research laboratory, and another facility dedicated to the production of integrated circuits. Many of the products later introduced by the division, however, resulted from acquisitions or joint ventures with other companies. For example, in 1984 Kodak launched its first electronic product, a camcorder that combined an eight-millimeter video camera and recorder, in conjunction with Matsushita Electric Industrial Co., Ltd. of Japan. This represented a major departure for Kodak, which historically had been self-reliant in everything from manufacturing cardboard boxes to maintaining its own fire department.

Also in 1984 Kodak introduced complete lines of videotape cassettes for all video formats and floppy discs for use in personal computers. It bolstered the latter area in 1985 with the purchase of Verbatim Corporation, a floppy disc manufacturer. After five years of disappointing sales, Verbatim was sold to Mitsubishi Kasei Corporation of Japan.

Kodak underwent another major reorganization at the beginning of 1985 to capitalize more quickly on growth opportuni-ties. Seventeen business units and a new Life Sciences Group were formed, the latter division to be involved in developing biomedical technology. Each of the 17 operating units, which had previously existed as a centralized group under the photo-graphic division, were given more autonomy and flexibility to run their businesses as independent profit centers.

The company reentered the 35-millimeter camera market in 1985 with a product made by Chinon Industries of Japan. Fifteen years earlier, it had withdrawn from the market because of doubts about the 35-millimeter cameras mass appeal.

In 1986, ten years after Polaroid filed its patent-infringement suit over Kodaks instant camera, a federal appeals court upheld a lower court ruling and ordered Kodak to leave the instant camera business. Kodak voluntarily offered its customers trade-in options for their obsolete cameras but was forced to make a somewhat different offer as a result of a class-action lawsuit. The financial implications of this development and the continuing struggle to boost earnings led the company to institute another workforce reduction in 1986, this time by ten percent. Although the domestic picture was somewhat grim, the fact that nearly 40 percent of the companys sales came from overseas helped produce strong bottom-line gains over the previous year. A weakening U.S. dollar blunted the impact of foreign competition and allowed Kodak to reclaim lost ground in its core businesses while also entering new ones. An employees suggestion to apply the companys manufacturing capabilities to the production of lithium batteries resulted in the successful introduction of a complete line of alkaline battery products under the Supralife brand in 1986.

That same year, Kodak also formed the Eastman Pharmaceuticals Division to establish an even stronger presence in healthcare. Joint venture agreements and licensing arrangements with existing pharmaceutical companies initially occupied division managements attention. In 1988 Kodak acquired Sterling Drug Inc., a manufacturer of prescription drugs and such consumer products as Bayer aspirin and Lysol cleaner, to make the company more competitive in the pharmaceutical industry. The $5.1 billion acquisition, however, was viewed unfavorably by the companys shareholders, in part because Sterling had a second-rate reputation as a pharmaceutical manufacturer. One year later, this negative perception seemed correct. Intense competition had reduced the sales of Sterlings existing Pharmaceuticals while new products under development showed questionable effectiveness during testing.

In 1988 evidence came to light indicating that toxic chemicals from the companys Rochester plant had leaked into the areas groundwater, posing a possible health hazard to local residents. In April 1990 the company admitted that it had violated New Yorks environmental regulations and was fined $1 million. It also agreed to clean up the site of its Kodak Park manufacturing facility and reduce chemical emissions from the plant.

Under the direction of Mr. Kay Whitmore, who became chairman and CEO in 1990, profits of the goliath company grew steadily. The positive results that emerged from the companys restructuring of 1985, however, were eroded by the recession of the early 1990s. Coupled with the recession came the Persian Gulf War, which seriously dampened the tourist and travel industry and hurt sales of photographic equipment. The year 1991 also finally saw the culmination of the Polaroid suit against Kodak, with the latter agreeing to pay the former a settlement of $925 million.

Once again, Kodak embarked on a path of restructuring and cost cutting. As a cost-cutting incentive, management in 1990 devised an early retirement plan that would trim approximately 5,800 people from the workforce. One year later, however, the plan backfired somewhat when 6,600 decided to retire early. With a shortfall of employees, the company was forced to hire 1,600 new workers. Management also was trimmed. Only three managers were replaced out of the 12 who retired in 1991.

Of the four business segments that had been in place since the previous restructuringphotographic, information, health, and chemicalsmanagement merged photographic and information into a single group named Imaging. Three group presidents were appointed to head the three divisions. Downsizing, cost cutting, restructuring, and a suspicion of red tape, as one market analyst described it, injected new growth into Kodak and returned the company slowly to profitability.

The Imaging Division, the largest unit, focused on Kodaks core business of photography and photofinishing, as well as copying machines, computer printers, and software. As part of its exploration of various new technologies, including digital photography, the division in 1992 developed a camera able to store photographic shots on a compact disc that could be dis-played on a CD player. Such advances, including Kodaks introduction in the fall of 1992 of a writable compact disc publishing system (enabling the consumer to write, store, and retrieve information on a CD), enabled Kodak to retain its position as the world leader in electronic imaging. To maintain this lead, the company established a small Center for Creative Imaging in Camden, Maine, an artistic haven, to encourage imaging innovations in a creative atmosphere. Meantime, one piece of the former information business segment, Atex, was sold off in 1992 following the dwindling away of its market position because of its outmoded technology.

Kodaks Health Product Division also was restructured with the 1991 merger of two pharmaceutical companies into one entity, Sterling Winthrop, which manufactured both pharmaceuticals and nonpharmaceutical consumer products. Sterling Winthrop in turn formed a joint venture with the French firm Sanofi in 1991, enabling it to penetrate the European pharmaceutical market more easily than before. The joint venture placed Kodaks Health Division among the top 20 pharmaceutical concerns in the world. Included within Kodaks Health Division was the Clinical Products Division, which originated in 1980 when Kodak introduced its Ektachem blood analyzer. Other businesses within the health group included X-ray machines and electronic health imaging products.

The third division of Kodak, the Chemical Product Division, manufactured and marketed chemicals, fibers, and plastics. As of the early 1990s Eastman Chemical Company was the 15th largest chemical firm in the United States. The focus of the Chemical Division was on expansion and overseas sales. As a result, the Chemical Division became a global enterprise, with joint ventures in many foreign countries. In 1991 Eastman Chemical entered the propylene business with the purchase of propylene interests as well as the urethane polyols business of ARCO Chemical Company. In the early 1990s, the Tenite Plastics division of Eastman Chemical was the largest plastic bottle and container supplier in the world.

1993 into the 21st Century: Refocusing on Imaging, with an Emphasis on Digital

Despite the restructuring efforts, Kodak remained, according to Peter Nulty writing in Fortune magazine in early 1994, one of the most bureaucratic, wasteful, paternalistic, slow-moving, isolated, and beloved companies in America. The company continued to lose market share in its core film and photographic paper operations; not only was Kodak reluctant to fully embrace the digital future out of fear of undermining its chemical photography business, it also had been slow to recognize huge opportunities in that chemical core, such as the explosive growth of 35-millimeter film sales following the debut of point-and-shoot 35-millimeter cameras. The moves to diversify outside imaging, most notably the move into pharmaceuticals, proved ill-advised and saddled the company with more than $7 billion in debt. With earnings stagnating and no turnaround in sight, the board of directors, under pressure from outside investors, fired Whitmore in late 1993. Replacing him as chairman and CEO was George Fisher, who left the top spot at Motorola, Inc. to join Kodak, thereby becoming the first outsider to head the company.

Fisher almost immediately moved to refocus the company on its imaging core. Fisher and a newly installed top financial team went ahead with the spinoff to shareholders of Eastman Chemical at year-end 1993; this divestment had already been in the works under Whitmore. The following year, Kodak sold Sterling Winthrop to SmithKline Beecham plc for $4.6 billion, its diagnostics products division to Johnson & Johnson for $1 billion, and several other nonimaging units for about another $2.4 billion. These businesses had together accounted for $7.4 billion in revenues in 1993 but only $46 million in pretax profit. The asset sales reduced the debt load to a manageable $1.5 billion and returned the company to its roots.

Next, Fisher moved to transform Kodak into a digital company for the 21st century. Rather than viewing the digital future as a threat to the chemical photography past, Fisher saw digital photography as a great opportunity to revitalize Kodaks core, as he related to Forbes in early 1997: I think there was a fear of what digital was all about, whereas I was coming here because I believed digital imaging and the core photography business had a symbiotic relationship, which was, in fact, exciting. During 1994 Fisher created a new division called Digital and Applied Imaging, and hired Carl Gustin, a marketing executive who had previously worked at Digital Equipment Corporation and Apple Computer, Inc., as its head. Among the early developments of the new division was the 1995 relaunch of the Kodak Photo CD with a new design aimed at desktop personal computer users and the introduction that year of a full-featured digital camera priced at less than $1,000.

Back on the chemical photography front, Kodak under Fishers leadership took a more aggressive approach to trade disputes with its archrival Fuji Photo Film. In 1995 Kodak accused the Japanese government and Fuji of illegally restricting access to the Japanese market for film and photographic paper. The U.S. government took the case to the newly formed World Trade Organization (WTO) in 1996, with the European Union soon joining the Kodak side. Fuji contended that Kodaks policies in pricing and marketing its products in Japan were to blame for the companys low market share, and that Kodak faced an environment in Japan similar to what Fuji faced in the United States. In fact, both companies held about 70 percent of their respective home markets, while Kodak held about 12 percent of the Japanese market and Fuji still only ten percent of the U.S. market. In 1997 the WTO rejected Kodaks claims, ruling in Fujis favor.

Ironically in the midst of this legal battle, a Kodak-led consortium that included Fuji (as well as Canon Inc., Minolta Co., Ltd., and Nikon Corporation) developed the Advanced Photo System (APS), an effort to revitalize the stagnant still photography market. APS, which was a hybrid between conventional and digital photography technology, offered drop-in film loading and the ability to select from three photo sizes (four by six-inch, four by seven-inch, and a panoramic four by ten-inch) as photos were taken. In February 1996 Kodak unveiled the Advantix brand, which it used for its APS film, cameras, and related equipment and services. APS proved to be an instant success, and Kodak quickly captured 85 percent of the U.S. market for APS film.

In December 1996 Daniel A. Carp was named president and chief operating officer of Eastman Kodak. One month later Kodak completed the sale to Danka Business Systems PLC of its loss-making imaging services unit, which sold and serviced copiers and provided document management services. Later in 1997 Kodak acquired Wang Laboratories software business unit, which focused on imaging and work management soft-ware. The following year Kodak beefed up its health imaging division through the $530 million purchase of the bulk of Imation Corporations medical imaging business, including the Dry View laser imaging system. Divestments in 1998 included the Fox Photo, Inc. photofinishing chain, which was sold to Wolf Camera. Also in 1998 the company introduced the Kodak Picture Maker, a digital imaging kiosk through which consumers could manipulate, enlarge, and/or crop and then reprint an existing photograph.

Despite all of Fishers maneuvering, Kodak was still vulnerable. In the summer of 1997 the seeming turnaround turned sour when Fuji Photo initiated a brutal price war in the U.S. market at the same time that a strong U.S. dollar and the emerging Asian economic crisis wreaked additional havoc overseas. The na-scent digital division, for all its innovative new products, was on its way to losing $440 million for the year. In late 1997 Fisher announced a major restructuring, involving a workforce reduction of 20,000, a shakeup of top management, and a goal to cut more than $1 billion from annual costs. After having nearly all of its profits wiped out by a $1.46 billion restructuring charge in 1997, Kodak returned to post net income of $1.39 billion in both 1998 and 1999, on revenues of $13.41 billion and $14.09 billion, respectively.

During 1999 Kodak continued its drive to divest underper-forming units through the sale of its office imaging unitwhich included digital printers, copiers, and roller assembliesto Heidelberger Druckmaschinen AG of Germany. In January 2000 Fisher stepped down as CEO, remaining chairman until the end of that year; Carp was named his successor. Although Kodak had managed to make a profit of $20 million from its digital businesses in 1999, it was far from clear whether Kodak would be a major player in the digital world of the new millennium. For his part, Carp announced in mid-2000 that the company expected 45 percent of revenue to be generated from digital imaging in 2005, which would be a huge increase from the 17 percent of 1999. Eastman Kodaks progress toward this predicted level, or lack thereof, was likely to be highly indicative of the overall direction of the company in the early 21st century.

Principal Subsidiaries

Eastman Kodak International Sales Corporation (Barbados); Torrey Pines Realty Company, Inc.; Cinesite, Inc.; FPC Inc.; Qualex Inc.; Qualex Canada Photofinishing Inc.; Eastman Soft-ware Inc.; PictureVision Inc.; Eastman Gelatine Corporation; Eastman Canada Inc.; Kodak Canada Inc.; Kodak (Export Sales) Ltd. (Hong Kong); Kodak Argentina S.A.I.C.; Kodak Chilena S.A.F. (Chile); Kodak Caceo Ltd.; Kodak Panama, Ltd.; Kodak Americas, Ltd.; Kodak Venezuela, S.A.; Kodak (Near East), Inc.; Kodak (Singapore) Pte. Limited; Kodak Philippines, Ltd.; Kodak Limited (U.K.); Cinesite (Europe) Limited (U.K.); Kodak India Limited; Kodak International Finance Ltd. (U.K.); Kodak Polska Sp.zo.o (Poland); Kodak AO (Russia); Kodak (Ireland) Manufacturing Limited; Kodak Ireland Limited; Kodak-Pathe SA (France); Kodak A.G. (Germany); E.K. Holdings, B.V. (Netherlands); Kodak Brasileira C.I.L. (Brazil); Kodak Korea Limited; Kodak Far East Purchasing, Inc.; Kodak New Zealand Limited; Kodak (Australasia) Pty. Ltd. (Australia); Kodak (Kenya) Limited; Kodak (Egypt) S.A.E.; Kodak (Malaysia) S.B.; Kodak Taiwan Limited; Eastman Kodak International Capital Company, Inc.; Kodak de Mexico S.A. de C.V.; Kodak Export de Mexico, S. de R.L. de C.V.; Kodak Mexicana S.A. de C.V. (Mexico); N.V. Kodak S.A. (Belgium); Kodak a.s. (Denmark); Kodak Norge A/S (Norway); Kodak SA (Switzerland); Kodak (Far East) Limited (Hong Kong); Kodak (Thailand) Limited; Kodak G.m.b.H. (Austria); Kodak Kft. (Hungary); Kodak Oy (Finland); Kodak Nederland B.V. (Netherlands); Kodak S.p.A. (Italy); Kodak Portuguesa Limited; Kodak S.A. (Spain); Kodak AB (Sweden); Eastman Kodak (Japan) Ltd.; Kodak Japan Ltd.; Kodak Imagex K.K. (Japan); K.K. Kodak Information Systems (Japan); Kodak Japan Industries Ltd.; Kodak (China) Limited (Hong Kong); Kodak Electronic Products (Shanghai) Co., Ltd. (China); BASO Precision Optics, Ltd. (Taiwan); K.H. Optical Company Limited (Hong Kong); Kodak Photographic Equipment (Shanghai) Co., Ltd. (China); Kodak (China) Co. Ltd.; Kodak (WUXI) Co. Ltd. (China).

Principal Operating Units

Document Imaging; Eastman Software; Consumer Imaging; Commercial and Government Systems; Global Customer Service and Support; Digital and Applied Imaging; Health Imaging; Entertainment Imaging; KODAK Professional.

Principal Competitors

Agfa-Gevaert Group; Canon Inc.; Casio Computer Co., Ltd.; Fuji Photo Film Co., Ltd.; Hewlett-Packard Company; Leica Camera AG; Matsushita Electric Industrial Co., Ltd.; Minnesota Mining and Manufacturing Company; Minolta Co., Ltd.; Nikon Corporation; Olympus Optical Co., Ltd.; Koninklijke Philips Electronics N.V.; PhotoWorks, Inc.; Polaroid Corporation; Ricoh Company, Ltd.; Sharp Corporation; Sony Corporation; Xerox Corporation.

Further Reading

Astor, Will, Huge Pioneer-Kodak Project Marks Progress, Rochester Business Journal, September 25, 1992.

Bounds, Wendy, George Fisher Pushes Kodak into Digital Era, Wall Street Journal, June 9, 1995, p. B1.

Brayer, Elizabeth, George Eastman: A Biography, Baltimore: Johns Hopkins University Press, 1996.

Buell, Barbara, and Rebecca Aikman, Kodak Is Trying to Break Out of Its Shell, Business Week, June 10, 1985, pp. 92 +.

Burgess, John, Firms Plan Multimedia Consortium, Washington Post, October 1, 1992.

Chakravarty, Subrata N., How an Outsiders Vision Saved Kodak, Forbes, January 13, 1997, pp. 4547.

Chakravarty, Subrata N., and Ruth Simon, Has the World Passed Kodak By?, Forbes, November 5, 1984.

Collins, Douglas, The Story of Kodak, New York: Abrams, 1990.

Desmond, Edward W., Whats Ailing Kodak? Fuji, Fortune, October 27, 1997, pp. 185 +.

Deutsch, Claudia H., More Paths to Profits: Kodak Hopes Demand for Digital Images Will Sell Film, New York Times, December 2, 1996, p. D1.

Dvorak, John C, Razors with No Blades, Forbes, October 18, 1999, p. 168.

Grant, Linda, Can Fisher Focus Kodak?, Fortune, January 13, 1997, pp. 76 +.

______, A New Picture at Kodak, U.S. News and World Report, September 19, 1994, pp. 5860.

______, Why Kodak Still Isnt Fixed, Fortune, May 11, 1998, pp. 17981.

Hammonds, Keith H., Kodak May Wish It Never Went to the Drug-store, Business Week December 4, 1989, pp. 72 +.

Helm, Leslie, Has Kodak Set Itself Up for a Fall?, Business Week, February 22, 1988, pp. 134+.

______, Why Kodak Is Starting to Click Again, Business Week, February 23, 1987, pp. 134+.

Johnson, Greg, Kodak Device Places Images of Film on Disc, Los Angeles Times, July 31, 1992.

Journey into Imagination: The Kodak Story, Rochester, N.Y.: Eastman Kodak Company, 1988.

Klein, Alec, Kodak Expects Digital Imaging to Be 45% of Revenue by 2005, Wall Street Journal, June 15, 2000, p. B14.

______, Kodak Losing U.S. Market Share to Fuji, Wall Street Journal, May 28, 1999, p. A3.

______, Shutter Snaps on Fishers Leadership at Kodak, Wall Street Journal, June 10, 1999, p. B1.

Kodak Fights Back: Everybody Wants a Piece of Its Markets, Business Week, February 1, 1982, pp. 48 +.

Leib, Jeffrey, Kodak Colorado Peddles Injection-Molding Expertise, Denver Post, March 6, 1992.

Maremont, Mark, Kodaks New Focus: An Inside Look at George Fishers Strategy, Business Week, January 30, 1995, pp. 6268.

Maremont, Mark, and Elizabeth Lesly, Getting the Picture: Kodak Finally Heeds the Shareholders, Business Week, February 1,1993, pp. 2426.

______, The Revolution That Wasnt at Eastman Kodak, Business Week, May 10, 1993, pp. 2425.

Maremont, Mark, and Gary Me Williams, Kodak: Shoot the Works, Business Week, November 15, 1993, pp. 3032.

McGinn, Daniel, A Star Image Blurs, Newsweek, April 6, 1998, pp. 3638.

Moore, Thomas, and Lee Smith, Embattled Kodak Enters the Electronic Age, Fortune, August 22, 1983, pp. 120+.

Nulty, Peter, Digital Imaging Had Better Boom Before Kodak Film Busts, Fortune, May 1, 1995, pp. 8083.

______, Kodak Grabs for Growth Again, Fortune, May 16, 1994, pp. 7678.

Perdue, Wes, Eastman Kodak and BioScan Inc. Form Alliance, Business Wire, August 10, 1992.

Santoli, Michael, Kodaks New Colors, Barrons, August 24, 1998, pp. 2526, 2829.

Smith, Emily T., Picture This: Kodak Wants to Be a Biotech Giant, Too, Business Week, May 26, 1986, pp. 88 +.

Smith, Geoffrey, Film Vs. Digital: Can Kodak Build a Bridge?, Business Week, August 2, 1999, p. 66.

Smith, Geoffrey, et al., Can George Fisher Fix Kodak?, Business Week, October 20, 1997, pp. 11620, 124, 128.

Smith, Geoffrey, Brad Wolverton, and Ann Therese Palmer, A Dark Kodak Moment, Business Week, August 4, 1997, pp. 3031.

Swasy, Alecia, Changing Focus: Kodak and the Battle to Save a Great American Company, New York: Times Business, 1997.

Taylor, Alex, III, Kodak Scrambles to Refocus, Fortune, March 3, 1986, pp. 113 +.

Treece, James B., Barbara Buell, and Jane Sasseen, How Kodak Is Trying to Move Mount Fuji, Business Week, December 2, 1985, pp. 62 +.

Webb, Chanoine, The Picture Just Keeps Getting Darker at Kodak, Fortune, June 21, 1999, p. 206.

Weber, Jonathan, Top High-Tech Firms Team Up on Multimedia, Los Angeles Times, October 7, 1992.

Sandy Schusteff and Sina Dubovoj

updated by David E. Salamie

Cite this article
Pick a style below, and copy the text for your bibliography.

  • MLA
  • Chicago
  • APA

"Eastman Kodak Company." International Directory of Company Histories. . Encyclopedia.com. 26 Jul. 2017 <http://www.encyclopedia.com>.

"Eastman Kodak Company." International Directory of Company Histories. . Encyclopedia.com. (July 26, 2017). http://www.encyclopedia.com/books/politics-and-business-magazines/eastman-kodak-company-1

"Eastman Kodak Company." International Directory of Company Histories. . Retrieved July 26, 2017 from Encyclopedia.com: http://www.encyclopedia.com/books/politics-and-business-magazines/eastman-kodak-company-1

Eastman Kodak Company

Eastman Kodak Company

343 State Street
Rochester, New York 14650
U.S.A.
(716) 724-4000
Fax: (716) 724-0663

Public Company
Incorporated: 1901
Employees: 132,600
Sales: $20.18 billion
Stock Exchange: New York
SICs: 3861 Photographic Equipment and Supplies; 5043 Photographic Equipment & Supplies; 2869 Industrial Organic Chemicals; 2899 Chemical Preparations; 2865 Cyclic Crudes & Intermediates; 3572 Computer Storage Devices; 3577 Computer Peripheral Equipment; 7372 Prepackaged Software; 7373 Computer Integrated Systems Design; 2796 Platemaking Services; 2833 Medicinals & Botanicals; 2821 Plastics Materials & Resins; 2823 Cellulosic Man-Made Fibers

A multinational corporation whose name and film products are familiar to photographers around the world, Eastman Kodak Company is a diversified manufacturer of photographic imaging equipment and supplies, chemicals, health-care products, and information systems. Kodak is recognized widely as a tightly managed company with superior international marketing.

The company bears the name of its founder, George Eastman, who became interested in photography during the late 1870s while planning a vacation from his job as a bank clerk in Rochester, New York. Taking a coworkers suggestion to make a photographic record of his intended trip to Santo Domingo, the 24-year-old Eastman soon discovered that the camera, film, and wet-plate-developing chemicals and equipment he had purchased were far too bulky. Instead of following through with his original vacation plans, Eastman spent the time studying how to make photography more convenient. He discovered a description of a dry-plate process that was being used by British photographers. He tried to replicate this process in his mothers kitchen at night after work.

After three years Eastman produced a dry glass plate with which he was satisfied. He obtained a U.S. patent for the dry plate and for a machine for preparing many plates at one time, and started manufacturing dry plates for sale to photographers. Henry A. Strong, a local businessman impressed by Eastmans work, joined him on January 1, 1881, to form the Eastman Dry Plate Company. Eastman left his position at the bank later that year to give his complete attention to the new company.

The new venture almost collapsed several times during its early years because the quality of the dry plates was inconsistent and Eastman insisted that the defective plates be replaced at no charge to the customer. Despite these setbacks, he was determined to make the camera as convenient as the pencil.

As his business grew, Eastman experimented to find a lighter and more flexible substitute for the glass plate. In 1884 he introduced a new film system using gelatin-coated paper packed in a roll holder that could be used in almost every plate camera available at that time. The company was recognized as Eastman Dry Plate and Film Company. Strong was president and Eastman treasurer and general manager of the 14-shareholder corporation. The company also opened a sales office in London in 1885 to take advantage of the growing European photography market.

In 1888 Eastmans company introduced its first portable camera. Priced at $25, it included enough film for 100 pictures. After shooting the roll of film, the owner sent both the film and the camera to Rochester for processing. For $10, the company sent back the developed prints and the camera loaded with a new roll of film. This breakthrough is considered to be the birth of snapshot photography. It was also at this time that Eastman trademarked Kodak, which he invented by experimenting with words that began and ended with his favorite letter, K. The company advertised its new camera extensively using the slogan, You push the button, we do the rest.

The following year, the Eastman Photographic Materials Company was incorporated in the United Kingdom to distribute Kodak products outside the United States from its headquarters in London. The company built a manufacturing plant in 1891 outside London to accommodate the growing product demand overseas, and set up additional distribution sites in France, Germany, and Italy by 1900.

In 1889 the firms name was changed to Eastman Company and in 1892 to Eastman Kodak Company. Eastman became president of the company upon Strongs death in 1919.

Eastman was committed to bringing photography to the greatest number of people at the lowest possible price. As his company grew and production of both the camera and film increased, manufacturing costs decreased significantly. This allowed the firm to introduce a number of new cameras, including the Folding Pocket Kodak Camera in 1898. It also brought out the first of a complete line of Brownie cameras, an easy-to-operate model that sold for $1 and used film that sold at 15 cents per roll, in 1900.

Over the next 20 years, the company continued to introduce photographic innovations. In 1902 Kodak brought to market a new developing machine that allowed film processing without benefit of a darkroom. The 1913 introduction of Eastman Portrait Film provided professional photographers with a sheet film alternative to glass plates.

In 1912 George Eastman hired Dr. C. E. Kenneth Mees, a British scientist, to head one of the first U.S. industrial research centers. Based in Rochester, this lab was where various tools and manufacturing processes that provided the company with a continuing stream of new products in the 1920s were invented. These new products, which included 16-millimeter Kodacolor motion picture film, the 16-millimeter Cine-Kodak motion picture camera, and the Kodascope projector, were targeted at the mass market and priced appropriately.

Kodak developed other new products to support the countrys involvement in World War I. In 1917 the company developed aerial cameras and trained U.S. Signal Corps photographers in their use. It also supplied the U.S. Navy with cellulose acetate, a film product, for coating airplane wings, and produced the unbreakable lenses used on gas masks.

George Eastman had always been civic-minded; even as a struggling bank clerk he donated money to the Mechanics Institute of Rochester. As Kodak grew, his philanthropy extended to such institutions as the Massachusetts Institute of Technology, the Hampton and Tuskegee institutes, and the University of Rochester. He was instrumental in starting numerous dental clinics around the world, and he enjoyed a reputation as a paternalistic employer because of his profit-sharing programs and insurance benefits for workers. In 1932 George Eastman committed suicide at the age of 77, leaving a note that read, To my friends. My work is done. Why wait? G.E.

That same year, the company introduced the first eight-millimeter motion picture system for the amateur photographer, consisting of film, cameras, and projectors. Three years later, it made available 16-millimeter Kodachrome film, the first amateur color film to gain commercial success. Similar film products for 35-millimeter slides and eight-millimeter home movies were introduced in 1936.

New photographic products continued to be introduced over the next decade, even as the company devoted a portion of its manufacturing capability to the production of equipment and film for the military during World War II. Following the war, Kodak focused its total attention once again on amateur photography with the introduction of a low-priced Brownie eight-millimeter movie camera in 1951 and the accompanying projector one year later.

In 1953 the company formed Eastman Chemical Products, Inc. to market alcohols, plastics, and fibers for industrial use. These substances were manufactured by Tennessee Eastman and Texas Eastman, two subsidiaries that had been formed in 1920 and 1952, respectively. The company had begun to manufacture these items because of its own use of chemicals in film manufacturing and processing.

Until this point, the company had always included the cost of film processing in the cost of film. A consent decree filed in 1954 forced Eastman Kodak to abandon this practice, but it also provided an opportunity for the company to serve a new market, independent photo finishers, with its film-developing products. Kodak acquired several photo finishing laboratories, including Fox Photo and American Photographic Group, to form an independent joint venture known as Qualex with Colorcraft Corp., owned by Fuqua Industries.

By 1958 the company had made significant advances in 35-millimeter color slide technology and introduced the first completely automatic projector, called the Kodak Calvalcade. A line of Kodak Carousel projectors introduced three years later became highly successful.

In 1963, one year after astronaut John Glenn had used Kodak film to record his orbit of the earth, the company introduced the Instamatic camera. Using a film cartridge instead of film roll, the Instamatic revolutionized amateur photography and became a commercial success because it was easy to use. Two years later, Kodak brought out a similar cartridge system for super-eight format Instamatic movie cameras and projectors. In 1972 five different models of a pocket version of the Instamatic camera were launched and proved immediately popular.

That same year, the company acquired Spin Physics, a San Diego, California-based producer of magnetic heads used in recording equipment. This purchase was completed in 1973.

In the early 1970s, Eastman Kodak became the defendant in a series of antitrust suits filed by several smaller film, camera, and processing companies. These legal actions alleged that Kodak illegally monopolized the photographic market. The most widely publicized suit, filed by Berkey Photo, charged that Kodak had violated the Sherman Antitrust Act by conspiring with two other companies, Sylvania Companiesa subsidiary of GTE Products Corporationand General Electric Company, to develop two photographic flash devices. Berkey requested that Eastman Kodak be divided into ten separate companies and asked for $300 million in damages. The case was settled in 1981 for $6.8 million.

In 1975 Kodak introduced the Ektaprint Copier-Duplicator, putting itself into direct competition with two firmly entrenched rivals, Xerox and IBM. Kodak considered this market to be a good fit with its existing microfilm business. In addition, the company had already established a foothold with a similar product, the Verifax machine, which had been introduced in 1953. This copier used a wet process like that used in photography, but it had become obsolete when Xerox introduced a technological advancement called xerography, which was less messy and produced better-quality copies than previous systems. After careful research and planning, the Ektaprint copier was developed to serve businesses with large-scale duplicating needs. Not only could the Ektaprint produce numerous copies at high speed, but it could also collate them while duplicating, a unique feature at the time.

In 1976 Kodak took on another well-established firm when it challenged Polaroid Corporations 30-year lock on instant photography with a new line of instant cameras and film that developed pictures outside the camera within a few minutes. Kodak had missed an opportunity to get in on the ground floor of this technology in the 1940s when it declined an offer to market an instant camera invented by Polaroid founder Edwin Land. The general feeling among Kodaks management at the time had been that Lands camera was a toy and the quality of its pictures not up to the companys accepted standards. Kodak had, however, also gained from Polaroids success. It had become the exclusive supplier of negatives for Polaroids instant, pull-apart color film in 1963. In 1969 Polaroid elected to take over this part of its film manufacturing itself. At the same time Polaroid cut prices drastically to bring its instant cameras more in line with the Kodak Instamatics. Kodak was convinced that Polaroids instant photography products posed a threat to the companys market leadership. However, the companys methodical product-development process, which emphasized long-term product quality over quick market entry, as well as Polaroids ownership of hundreds of related patents, proved to be major obstacles to an immediate competitive response. When Kodak finally introduced its own instant camera four years after the decision was made to develop it, the company was plagued by production problems and a Polaroid lawsuit alleging patent infringement. Although the company captured about 25 percent of the U.S. instant camera market within its first year, reports of quality flaws with the cameras instant photographs and Polaroids response with another new instant camera stifled sales. Polaroid successfully exploited the business applications of instant photographyidentity cards, for exampleand retained its strong position in the market.

During this period, Kodaks President and Chief Executive Officer Walter A. Fallon and Chairman Gerald B. Zornow oversaw product development. When Zornow retired in 1977, Fallón assumed the chairmanship and was succeeded as president by Colby H. Chandler. Employed with Kodak since 1941, Fallon had worked his way up from production to direct the U.S. and Canadian photographic division. He had been responsible for the launch of the pocket Instamatic camera line. Chandler had joined the company in 1951 and, as Fallens successor in the U.S. and Canadian photographic division, he was directly responsible for both the instant camera and the Ektaprint copier.

Upon becoming president, Chandler faced a challenge to Eastman Kodaks dominance in the photographic paper market by several Japanese competitors and U.S. suppliers, including Fuji Photo Film Company and 3M Company. These firms undercut Kodaks prices for a paper product of similar quality. Fuji also had the advantage of competing against a strong U.S. dollar, a factor that conversely reduced Kodaks profits significantly in foreign markets. The company responded with price reductions of its own, but suffered lower earnings and a decreasing level of investor confidence. Losing the title of official film of the 1984 Summer Olympics to Fuji added further insult to injury.

As the U.S. economy entered a recession in the late 1970s and sales growth in the companys consumer photographic products slowed, higher sales in other areas such as chemicals, business systems, and professional photo finishing pushed profits back on an upward trend. Several prior years of flat earnings across product areas were attributed largely to a lack of strategic planning. At the end of 1978 company operations were reorganized to consolidate the U.S., Canadian, and international photographic areas into one division. The companys first director of corporate planning was also hired to speed the product-development process and institute the controls needed to enable new products to become profitable more quickly.

The year 1980 marked the companys 100th anniversary. That year Kodak introduced the Ektachem 400 blood analyzer. This entry into the health sciences field represented a natural application of the companys film-manufacturing technology and reinforced its already strong presence as a supplier of x-ray film to hospitals and other health-care facilities.

During the 1980s the company faced intensifying Japanese competition in photography and a continuing decline in product demand. Rapid technological breakthroughs by other firms threatened to replace Kodaks core product line with more advanced equipment. The company instituted several measures to improve its performance. These included a stronger emphasis on nonphotographic products with high profit potential, a more aggressive approach to protecting its chemical imaging capabilities, a broader international marketing strategy, and a sharper focus on making acquisitions to bring the company up to speed technologically, particularly in electronics.

In 1981 the company purchased Atex, a major supplier of electronic text-editing systems used by publishers. Formed as an entrepreneurial venture in 1972 and the leader in its field at the time of the acquisition, Atex later lost ground to fast-changing computer technology as Kodaks traditionally slow-moving product development process was unable to keep pace with the industry.

Despite its shift in priorities to other areas, Kodak continued to support its bread-and-butter line of photographic products. In 1982 it introduced a line of small cameras that used film discs instead of cartridges and was considered a replacement for the pocket Instamatic camera.

Since the companys founding, Kodak had maintained a policy of treating its employees fairly and with respect, earning the nickname of the Great Yellow Father. It was George Eastmans belief that an organizations prosperity was not necessarily due to its technological achievements, but more to its workers goodwill and loyalty. As a result, company benefits were well above average, morale had always remained high, and employees never felt the need to unionize. This protective culture came to an end in 1983, however, when the company was forced to reduce its work force by 5 percent to cut costs. Competitive pressures from the Japanese and domestic and international economic problems had slowed product demand. Even the widely publicized disc camera failed to sustain its initial hot sales rate.

Upon Fallóns retirement in 1983, Colby Chandler took over as chairman and, in an attempt to keep up with the pace of change, pointed Kodak toward the electronics and video areas in earnest. During the 1970s the company had brought out products that either lacked quality or important features, or arrived too late on the scene to capitalize on new opportunities. Of all the products introduced during Fallóns tenure, only the Ektaprint copier was considered a success, although it gradually lost its marketing advantage to competitive offerings with greater speed and more features. Neither the instant nor the disc cameras had met original expectations. The companys x-ray film business also took a beating as hospital admissions dropped and attempts by medical institutions to control costs increased.

The companys new electronics division consisted of its Spin Physics subsidiary, a solid-state research laboratory, and another facility dedicated to the production of integrated circuits. Many of the products later introduced by the division, however, resulted from acquisitions or joint ventures with other companies. For example, in 1984 Kodak launched its first electronic product, a camcorder that combined an eight-millimeter video camera and recorder, in conjunction with Matsushita Electric Industrial Company of Japan. This represented a major departure for Kodak, which historically had been self-reliant in everything from manufacturing cardboard boxes to maintaining its own fire department.

Also in 1984 Kodak introduced complete lines of videotape cassettes for all video formats and floppy discs for use in personal computers. It bolstered the latter area in 1985 with the purchase of Verbatim Corporation, a floppy disc manufacturer. After five years of disappointing sales, Verbatim was sold to Mitsubishi Kasei Corporation of Japan.

Kodak underwent another major reorganization at the beginning of 1985 to capitalize more quickly on growth opportunities. Seventeen business units and a new Life Sciences Group were formed, the latter division to be involved in developing biomedical technology. Each of the 17 operating units, which had previously existed as a centralized group under the photographic division, were given more autonomy and flexibility to run their businesses as independent profit centers.

The company re-entered the 35-millimeter camera market in 1985 with a product made by Chinon Industries of Japan. Fifteen years earlier, it had withdrawn from the market because of doubts about the 35-millimeter cameras mass appeal.

In 1986, ten years after Polaroid filed its patent-infringement suit over Kodaks instant camera, a federal appeals court upheld a lower court ruling and ordered the company to leave the instant camera business. Kodak voluntarily offered its customers trade-in options for their obsolete cameras and was forced to make a somewhat different offer as a result of a class action lawsuit. The financial implications of this development and the continuing struggle to boost earnings led the company to institute another work force reduction in 1986, this time by 10 percent. Although the domestic picture was somewhat grim, the fact that nearly 40 percent of the companys sales came from overseas helped produce strong bottom-line gains over the previous year. A weakening U.S. dollar blunted the impact of foreign competition and allowed Kodak to reclaim lost ground in its core businesses while also entering new ones. An employees suggestion to apply the companys manufacturing capabilities to the production of lithium batteries resulted in the successful introduction of a complete line of alkaline battery products under the Supralife brand.

Kodak also formed the Eastman Pharmaceuticals Division to establish an even stronger presence in health care. Joint venture agreements and licensing arrangements with existing pharmaceutical companies initially occupied division managements attention. In 1988 Kodak acquired Sterling Drug Inc., a manufacturer of prescription drugs and such consumer products as Bayer aspirin and Lysol cleaners, to make the company more competitive in the pharmaceutical industry. The acquisition, however, was viewed unfavorably by the companys shareholders, in part because Sterling had a second-rate reputation as a pharmaceutical manufacturer. One year later, this negative perception seemed correct. Intense competition had reduced the sales of Sterlings existing pharmaceuticals while new products under development showed questionable effectiveness during testing.

In 1988 evidence came to light indicating that toxic chemicals from the companys Rochester plant had leaked into the areas groundwater, posing a possible health hazard to local residents. In April 1990 the company admitted that it had violated New Yorks environmental regulations and was fined $1 million. It also agreed to clean up the site of its Kodak Park manufacturing facility and reduce chemical emissions from the plant.

Under the direction of Mr. Kay Whitmore, who became chairman and CEO in 1990, profits of the goliath company grew steadily. However, the positive results that emerged from the companys restructuring of 1985 were eroded by the recession of the early 1990s. Coupled with the recession came the Persian Gulf War, which seriously dampened the tourist and travel industry and hurt sales of photographic equipment.

Once again, Kodak embarked on a path of restructuring and cost cutting. As a cost cutting incentive, management in 1990 devised an early retirement plan that would trim approximately 5,800 from the work force. One year later, however, the plan backfired somewhat when 6,600 decided to retire early. With a shortfall of employees, the company was forced to hire 1600 new workers. Management also was trimmed. Only three managers were replaced out of the 12 who retired in 1991.

Of the four business segments that had been in place since the previous restructuringphotographic, information, health, and chemicalsmanagement merged photographic and information into a single group named Imaging. Three group presidents were appointed to head the three divisions. Downsizing, cost cutting, restructuring, and a suspicion of red tape, as one market analyst described it, injected new growth into Kodak and returned the company slowly to profitability.

The largest business segment and the one generating the most sales (approximately 57 percent) is Imaging. This division includes Kodaks core business of photography and photo-finishing, as well as copying machines, computer printers, and software. The division is also exploring the various possibilities of new technologies, including digital photography. In 1992 the division developed a camera able to store photographic shots on a compact disc that can be displayed on a CD player. Such advances, including Kodaks introduction in the fall of 1992 of a writable compact disc publishing system (enabling the consumer to write, store, and retrieve information on a CD), have enabled Kodak to retain its position as the world leader in electronic imaging. To maintain this lead, the company established a small Center for Creative Imaging in Camden, Maine, an artistic haven, to encourage imaging innovations in a creative atmosphere.

Kodaks Health Product Division achieved record profits in 1991, accounting for approximately 24 percent of the companys sales. This testifies to the wisdom of broadening the companys scope beyond its traditional core business. Within this segment, restructuring has also taken place with the 1991 merger of two pharmaceutical companies into one entity, Sterling Winthrop, which manufactures not only pharmaceuticals but non-pharmaceutical consumer products. Sterling Winthrop in turn formed a joint venture with the French firm Sanofi in 1991, enabling it to penetrate the European pharmaceutical market more easily than before. The joint venture places Kodaks Health Division among the top twenty pharmaceutical concerns in the world. European customers will be serviced in turn by a new manufacturing plant in Strasbourg, France, that will also provide customer support.

Included within Kodaks Health Division is the Clinical Products Division, which originated in 1984 when Kodak introduced its Ektachem blood analyzer machine. Generating no sales when it first came out, by the early 1990s sales of the Clinical Products Division had topped a half billion dollars and were growing at a rate of 20 percent, twice the growth rate of Kodak overall. Other businesses within the Health group include x-ray machines and electronic imaging, sales of which contributed to making the Health Division Kodaks most promising and profitable in recession-plagued 1991.

The third division of Kodak, Chemical Product, generated approximately 18 percent of company sales in 1991. This group manufactures and markets chemicals, fibers, and plastics. In the 1990s Eastman Chemical Company has become the 15th largest chemical firm in the United States. The new focus of the Chemical Division has been on expansion and overseas sales. As a result, the Chemical Division has become a global enterprise, with joint ventures in many foreign countries. In 1991 Eastman Chemical entered the propylene business with the purchase of propylene interests as well as the urethane polyols business of ARCO Chemical Company. The Tenite Plastics division of Eastman Chemical is the largest plastic bottle and container supplier in the world.

Kodak has weathered many difficult economic times. In reasonable financial health at this time, the company is increasingly concerned with establishing an important presence in the global marketplace. Approximately 45 percent of the companys annual sales are generated overseas. Kodak was one of the first U.S. companies to take advantage of the fall of communism in Eastern Europe, setting up subsidiaries in Hungary and Poland and planning further penetration of that long deprived, but eager market. The company also has established a subsidiary in Turkey, numerous joint ventures with European firms, and a new headquarters in The Hague (Eastman Chemical).

Principal Subsidiaries

Eastman Kodak International Finance B.V. (Netherlands); Eastman Kodak International Sales Corporation (U.S. Virgin Islands); Eastman Technology, Inc.; Torrey Pines Realty Company, Inc.; Cyclotomics, Inc.; Datatape Incorporated; Electronic Pre-Press Systems, Inc.; Interactive Systems Corp.; Northfield Pharmaceuticals Limited; Ultra Technologies, Inc.; Eastman Chemical Products, Inc.; Holston Defense Corporation; Eastman Gelatine Corporation; Mustang Pipeline Company; Pinto Pipeline Company of Texas; Eastman Chemical International Ltd.; Eastman Chemical International, A.G. (Switzerland); Eastmanchem, Inc. (Canada); Eastman Canada, Inc.; Kodak Argentina, Ltd.; Kodak Brasileira C.I.L. (Brazil); Kodak Chilena S.A.F. (Chile); Kodak Colombiana, Ltd.; Kodak Mexicana, Ltd.; Kodak Panama, Ltd.; Kodak Export Limited; Laboratorios Kodak Limitada; Foto Interamericana de Peru, Ltd.; Kodak Caribbean, Limited; Kodak Uruguaya, Ltd. (Uruguay); Kodak Venezuela, S.A.; Kodak (Near East), Inc.; Kodak (Singapore) Pte. Limited; Kodak Philippines, Ltd.; Kodak Limited (U.K.); Kodak Ireland Limited (U.K.); Kodak Pathe (France); Kodak A.G. (Germany); Eastman Kodak International Capital Company, Inc.; Kodak Ges. m.b.h. (Austria); Kodak Oy (Finland); Kodak Nederland B.V. (Netherlands); Kodak S.p.A. (Italy); Kodak Portuguesa Limited; Kodak S.A. (Spain); Kodak AB (Sweden); Eastman Kodak (Japan) Ltd.; K.K. Kodak Information Systems (Japan); Kodak Japan Ltd.; Kodak Imagica K.K. (Japan); Kodak Far East Purchasing, Inc.; Kodak New Zealand Limited; Kodak (Australasia) Proprietary Limited; Kodak (Kenya) Limited; International Biotechnologies Inc.; Kodak (Egypt) S.A.; Komal S.B. (Malaysia); Kodak (Export Sales) Ltd. (Hong Kong); Kodak Taiwan Limited Inc.; Kodak Korea Ltd.; Sterling Drug Inc.

Further Reading

Chakravarty, Subrata N., and Ruth Simon, Has the World Passed Kodak By?, Forbes, November 5, 1984; Journey into Imagination: The Kodak Story, Rochester, New York, Eastman Kodak Company, 1988; Annual Report: Eastman Kodak Company, 1991; Leib, Jeffrey, Kodak Colorado Peddles Injection-Molding Expertise, Denver Post, March 6, 1992; Johnson, Greg, Kodak Device Places Images of Film on Disc, Los Angeles Times, July 31, 1992; Perdue, Wes, Eastman Kodak and BioScan Inc. Form Alliance, Business Wire, August 10, 1992; Astor, Will, Huge Pioneer-Kodak Project Marks Progress, Rochester Business Journal, September 25, 1992; Burgess, John, Firms Plan Multimedia Consortium, Washington Post, October 1, 1992; Weber, Jonathan, Top High-Tech Firms Team Up on Multimedia, Los Angeles Times, October 7, 1992.

Sandy Schusteff

updated by Sina Dubovoj

Cite this article
Pick a style below, and copy the text for your bibliography.

  • MLA
  • Chicago
  • APA

"Eastman Kodak Company." International Directory of Company Histories. . Encyclopedia.com. 26 Jul. 2017 <http://www.encyclopedia.com>.

"Eastman Kodak Company." International Directory of Company Histories. . Encyclopedia.com. (July 26, 2017). http://www.encyclopedia.com/books/politics-and-business-magazines/eastman-kodak-company-0

"Eastman Kodak Company." International Directory of Company Histories. . Retrieved July 26, 2017 from Encyclopedia.com: http://www.encyclopedia.com/books/politics-and-business-magazines/eastman-kodak-company-0

Eastman Kodak Company

Eastman Kodak Company

343 State Street
Rochester, New York 14650
U.S.A.
(716) 724-4000
Fax: (716) 724-0663

Public Company
Incorporated: 1889 as Eastman Company
Employees: 137,750
Sales: $18.40 billion
Stock Exchange: New York

A multinational corporation whose name and film are familiar to photographers around the world, Eastman Kodak Company is a diversified manufacturer of photographic imaging equipment and supplies, chemicals, health-care products, and information systems. It is recognized widely as a tightly managed company with superior international marketing.

The company bears the name of its founder, George Eastman, who became interested in photography during the late 1870s while planning a vacation from his job as a bank clerk in Rochester, New York. Taking a co-workers suggestion to make a photographic record of his intended trip to Santo Domingo, the 24-year-old Eastman soon discovered that the camera, film, and wet-plate-developing chemicals and equipment he had purchased were far too bulky. Instead of following through with his original vacation plans, Eastman spent the time studying how to make photography more convenient. He discovered a description of a dry-plate process that was being used by British photographers. He tried to replicate this process in his mothers kitchen at night after work.

After three years Eastman produced a dry glass plate with which he was satisfied. He obtained a U.S. patent for the dry plate and for a machine for preparing many plates at one time, and started manufacturing dry plates for sale to photographers. Henry A. Strong, a local businessman impressed by Eastmans work, joined him on January 1, 1881, to form the Eastman Dry Plate Company. Eastman left his position at the bank later that year to give his complete attention to the new company.

The new venture almost collapsed several times during its early years because the quality of the dry plates was inconsistent and Eastman insisted that the defective plates be replaced at no charge to the customer. Despite these setbacks, he was determined to make the camera as convenient as the pencil.

As his business grew, Eastman experimented to find a lighter and more flexible substitute for the glass plate. In 1883 he introduced a new film system using gelatin-coated paper packed in a roll holder which could be used in almost every plate camera available at that time. The company was recognized the following year as Eastman Dry Plate and Film Company. Strong was president and Eastman treasurer and general manager of the 14-shareholder corporation. The company also opened a sales office in London in 1885 to take advantage of the growing European photography market.

In 1888 Eastmans company introduced its first portable camera. Priced at $5.00, it included enough film for 100 pictures. After shooting the roll of film, the owner sent both the film and the camera to Rochester for processing. For $10.00, the company sent back the developed prints and the camera loaded with a new roll of film. This breakthrough is considered to be the birth of snapshot photography. It was also at this time that Eastman trademarked Kodak, which he invented by experimenting with words that began and ended with his favorite letter, K. The company advertised its new camera extensively using the slogan, You push the button, we do the rest.

The following year, the Eastman Photographic Materials Company was incorporated in the United Kingdom, to distribute Kodak products outside the United States from its headquarters in London. The company built a manufacturing plant in 1891 outside London to accommodate the growing product demand overseas, and set up additional distribution sites in France, Germany, and Italy by 1900.

In 1889, the firms name was changed to Eastman Company and then again in 1892 to Eastman Kodak Company. Eastman became president of the company upon Strongs death in 1919.

Eastman was committed to bringing photography to the greatest number of people at the lowest possible price. As his company grew and production of both the camera and film increased, manufacturing costs decreased significantly and allowed the firm to introduce a number of new cameras, including the Folding Pocket Kodak Camera in 1897. It also brought out the first of a complete line of Brownie cameras, an easy-to-operate model that sold for $1.00 and used film that sold at 150 per roll, in 1900.

Over the next 20 years, the company continued to introduce photographic innovations. In 1902 Kodak brought to market a new developing machine that allowed film processing without a darkroom. The 1913 introduction of Eastman Portrait Film provided professional photographers with a sheet film alternative to glass plates.

In 1912 George Eastman hired Dr. C.E. Kenneth Mees, a British scientist, to head up one of the first U.S. industrial research centers. Based in Rochester, this lab was where various tools and manufacturing processes that provided the company with a continuing stream of new products in the 1920s were invented. These new products, including 16-millimeter Kodacolor motion picture film, the 16-millimeter Cine-Kodak motion picture camera, and the Koda-scope projector, were targeted at the mass market and priced appropriately.

Kodak developed other new products to support the countrys involvement in World War I. In 1917 the company developed aerial cameras and trained U.S. Signal Corps photographers in their use. It also supplied the U.S. Navy with cellulose acetate, a film product, for coating airplane wings, and produced the unbreakable lenses used on gas masks.

George Eastman had always been civic-minded; even as a struggling bank clerk he donated money to the Mechanics Institute of Rochester. As Eastman Kodak grew, his philanthropy extended to such institutions as the Massachusetts Institute of Technology, the Hampton and Tuskegee institutes, and the University of Rochester. He was instrumental in starting numerous dental clinics around the world, and he enjoyed a reputation as a paternalistic employer for his profit-sharing programs and insurance benefits for workers.

In 1932 George Eastman committed suicide at the age of 77, leaving a note that read, To my friends. My work is done. Why wait? G.E.

That same year, the company introduced the first eight-millimeter motion picture system for the amateur photographer, consisting of film, cameras, and projectors. Three years later, it made available 16-millimeter Kodachrome film, the first amateur color film to gain commercial success. Similar film products for 35-millimeter slides and 8-millimeter home movies were introduced in 1936.

New photographic products continued to be introduced over the next decade, even as the company devoted part of its manufacturing capability to the production of equipment and film for the military during World War II. Following the war, Kodak focused its total attention once again on amateur photography with the introduction of a low-priced Brownie 8-millimeter movie camera in 1951 and the accompanying projector one year later.

In 1953, the company formed Eastman Chemical Products to market alcohols, plastics, and fibers for industrial use. These substances were manufactured by Tennessee Eastman and Texas Eastman, two subsidiaries that had been formed in 1920 and 1952, respectively. The company had begun to manufacture these items because of its own use of chemicals in film manufacturing and processing.

Until this point, the company had always included the cost of film processing in the cost of film. A consent decree filed in 1954 forced Eastman Kodak to abandon this practice, but it also provided an opportunity for the company to serve a new market, independent photofinishers, with its film-developing products. Beginning in 1986 Kodak acquired several photofinishing laboratories, including Fox Photo and American Photographic Group, to further solidify its relationships with photographic consumers and professionals.

By 1958 the company had made significant advances in 35-millimeter color slide technology and introduced the first completely automatic projector called the Kodak Calvalcade. A line of Kodak Carousel projectors introduced three years later became highly successful.

In 1963, one year after astronaut John Glenn had used Kodak film to record his orbit of the earth, the company introduced the Instamatic camera. Using a film cartridge instead of film roll, the Instamatic revolutionized amateur photography and became a commercial success because it was easy to use. Two years later, Kodak brought out a similar cartridge system for super-8 format Instamatic movie cameras and projectors. In 1972 five different models of a pocket version of the Instamatic camera were launched and became immediately popular.

That same year, the company formed Eastman Technology to develop new produces in areas unrelated to its traditional businesses. Its first acquisition was Spin Physics, a San Diego, California-based producer of magnetic heads used in recording equipment. This purchase was completed in 1973.

In the early 1970s, Eastman Kodak became the defendant in a series of antitrust suits filed by several smaller film, camera, and processing companies. These legal actions alleged that Kodak illegally monopolized the photographic market. The most widely publicized suit, filed by Berkey Photo, charged that Kodak had violated the Sherman Antitrust Act by conspiring with two other companies, Sylvania Companiesa subsidiary of GTE Products Corporation and General Electric Company, to develop two photographic flash devices. Berkey requested that Eastman Kodak be divided into ten separate companies and asked for $300 million in damages. The case was settled in 1981 for $6.8 million.

In 1975, Kodak introduced the Ektaprint Copier-Duplicator, putting itself into direct competition with two firmly entrenched rivals, Xerox and IBM. Kodak considered this market to be a good fit with its existing microfilm business and already had established a foothold with a similar product, the Verifax machine, which had been introduced in 1953. This copier used a wet process like that used in photography, but it had become obsolete when Xerox introduced a technological advancement called xerography, which was less messy and produced better-quality copies than previous systems. After careful research and planning, the Ektaprint copier was developed to serve businesses with large-scale duplicating needs. Not only could the Ektaprint produce numerous copies at high speed, but it could also collate them while duplicating, a unique feature at the time. Despite its innovative attributes and high-quality image production, however, Ektaprint lost about $150 million over its first five years, due primarily to the companys slow entry into the market.

In 1976 Eastman Kodak took on another well-established firm when it challenged Polaroid Corporations 30-year lock on instant photography with a new line of instant cameras and film that developed pictures outside the camera within a few minutes. The company had missed an opportunity to get in on the ground floor of this technology in the 1940s when it declined an offer to market an instant camera invented by Polaroid founder Edwin Land. The general feeling among Kodaks management had been that Lands camera was a toy and the quality of its pictures was not up to the companys accepted standards. Eastman Kodak had also gained from Polaroids success. It had become the exclusive supplier of negatives for Polaroids instant, pull-apart color film in 1963. In 1969, however, Polaroid elected to take over this part of its film manufacturing itself. At the same time Polaroid cut prices drastically to bring its instant cameras more in line with the Kodak Instamatics. Kodak was convinced that Polaroids instant photography products posed a threat to the companys market leadership. However, the companys methodical product-development process, which emphasized long-term product quality over quick market entry, as well as Polaroids ownership of hundreds of related patents, proved to be major obstacles to an immediate competitive response. When Kodak finally introduced its own instant camera four years after the decision was made to develop it, the company was plagued by production problems and a Polaroid lawsuit alleging patent infringement. Although the company captured about 25% of the U.S. instant camera market within its first year, reports of quality flaws with the cameras instant photographs and Polaroids response with another new instant camera stifled sales. Polaroid successfully exploited the business applications of instant photographyfor identity cards, for exampleand retained its strong position in the market.

During this period, Eastman Kodaks President and Chief Executive Officer Walter A. Fallón and Chairman Gerald B. Zornow oversaw product development. When Zornow retired in 1977, Fallón assumed the chairmanship and was succeeded as president by Colby H. Chandler. With Eastman Kodak since 1941, Fallón had worked his way up from production to direct the U.S. and Canadian photographic division. He had been responsible for the launch of the pocket Instamatic camera line. Chandler had joined the company in 1951, and as Fallóns successor in the U.S. and Canadian photographic division he was directly responsible for both the instant camera and the Ektaprint copier.

Upon becoming president, Chandler faced a challenge to Eastman Kodaks dominance in the photographic paper market by several Japanese competitors and U.S. suppliers, including Fuji Photo Film Company and 3M Company. These firms undercut Kodaks prices for a paper product of similar quality. Fuji also had the advantage of competing against a strong U.S. dollar, which reduced Eastman Kodaks profits significantly in foreign markets. The company responded with price reductions of its own but suffered lower earnings and a decreasing level of investor confidence. Losing the title of official film of the 1984 Summer Olympics to Fuji added further insult to injury.

As the U.S. economy entered a recession in the late 1970s and sales of the companys consumer photographic products declined, higher sales in other areas, such as chemicals, business systems, and professional photofinishing, set profits back on an upward trend. Several prior years of flat earnings across product areas were attributed largely to a lack of strategic planning. At the end of 1978 company operations were reorganized to consolidate the U.S., Canadian, and international photographic areas into one division. The companys first director of corporate planning was also hired to speed the product-development process and institute the controls needed for new products to become profitable more quickly.

The year 1980 marked the companys 100th anniversary. That year Kodak introduced the Ektachem 400 blood analyzer. This entry into the health sciences field represented a natural application of the companys film-manufacturing technology and reinforced its already strong presence as a supplier of x-ray film to hospitals and other health-care facilities.

During the 1980s the company faced intensifying Japanese competition in photography and a continuing decline in product demand. Rapid technological breakthroughs by other firms threatened to replace Eastman Kodaks core product line with more advanced equipment. The company instituted several measures to improve its performance. These included a stronger emphasis on nonphotographic products with high profit potential, a more aggressive approach to protecting its chemical imaging capabilities, a broader international marketing strategy, and a sharper focus on making acquisitions to bring the company up to speed technologically, particularly in electronics.

In 1982 the company purchased Atex, a major supplier of electronic text-editing systems used by publishers. Formed as an entrepreneurial venture in 1972 and leading its field at the time of the acquisition, Atex later lost ground to fast-changing computer technology as Kodaks traditionally slow-moving product-development process was unable to keep pace with the industry.

Despite its shift in priorities to other areas, Eastman Kodak continued to support its bread-and-butter line of photographic products. In 1982 it introduced a line of small cameras that used film discs instead of cartridges and was considered a replacement for the pocket Instamatic camera.

Since the companys founding, Kodak had maintained a policy of treating its employees fairly and with respect, earning the nickname of the Great Yellow Father. It was George Eastmans belief that an organizations prosperity was not necessarily due to its technological achievements, but more to its workers goodwill and loyalty. As a result, company benefits were well above average, morale had always remained high, and employees never felt the need to unionize. This protective culture came to an end in 1983, however, when the company was forced to reduce its workforce by 5% in order to cut costs. Competitive pressures from the Japanese and both domestic and international economic problems had slowed product demand. Even the widely publicized disc camera failed to sustain its initial, hot sales rate.

Upon Fallens retirement in 1983, Colby Chandler took over as chairman and, in an attempt to keep up with the pace of change, pointed Eastman Kodak toward the electronics and video areas in earnest. During the 1970s, the company had brought out products that either lacked quality or important features, or arrived too late on the scene to capitalize on new opportunities. Of all the products introduced during Fallons tenure, only the Ektaprint copier was considered a success, although it gradually lost its marketing advantage to competitive offerings with greater speed and more features. Neither the instant nor the disc cameras had met original expectations and the Ektachem 400 blood analyzer was unable to match the number of tests performed or the reliability of competing products. Two improved versions of the blood analyzer were subsequently introduced in 1984. The companys x-ray film business also took a beating as hospital admissions dropped and attempts by medical institutions to control costs increased.

The companys new electronics division consisted of its Spin Physics subsidiary, a solid-state research laboratory, and another facility dedicated to the production of integrated circuits. Many of the products later introduced by the division, however, resulted from acquisitions or joint ventures with other companies. For example, in 1984 Kodak launched its first electronic product, a camcorder combining an eight-millimeter video camera and recorder, which was developed jointly with Matsushita Electric Industrial Company of Japan. This represented a major departure for Kodak, which historically had been self-reliant in everything from manufacturing cardboard boxes to maintaining its own fire department. It was not the first time that Eastman Kodak had considered marketing a video product. In the mid-1970s the company had elected not to market a videocassette recorder it had developed internally because it would have been priced much higher than its cameras; Kodak believed that consumers would be resistant to the cost.

Also in 1984 Kodak introduced complete lines of videotape cassettes for all video formats and floppy discs for use in personal computers. It bolstered the latter area in 1985 with the purchase of Verbatim Corporation, a floppy disc manufacturer. After five years of disappointing sales, Verbatim was sold to Mitsubishi Kasei Corporation of Japan.

Kodak underwent another major reorganization at the beginning of 1985 in order to capitalize more quickly on growth opportunities. Seventeen business units and a new Life Sciences Group were formed, the latter division to be involved in developing biomedical technology. Each of the 17 operating units, which had previously existed as a centralized group under the photographic division, were given more autonomy and flexibility to run their businesses as independent profit centers.

The company re-entered the 35-millimeter camera market in 1985 with a product made by Chinon Industries of Japan. Fifteen years earlier, it had withdrawn from the market because it was not convinced of the 35-millimeter cameras mass appeal.

In 1986, ten years after Polaroid filed its patent-infringement suit over Eastman Kodaks instant camera, a federal appeals court upheld a lower court ruling and ordered the company to leave the instant camera business. Eastman Kodak was forced to offer its customers trade-in options for their obsolete cameras. The financial implications of this development and the continuing struggle to boost earnings led the company to institute another work force reduction in 1986, this time by 10%. Although the domestic picture was somewhat grim, the fact that nearly 40% of the companys sales came from overseas helped produce strong bottom-line gains over the previous year. A weakening U.S. dollar blunted the impact of foreign competition and allowed Eastman Kodak to reclaim lost ground in its core businesses while also entering new ones. An employees suggestion to apply the companys manufacturing capabilities to the production of lithium batteries resulted in the successful introduction of a complete line of alkaline battery products under the Supralife brand.

Kodak also formed the Eastman Pharmaceuticals Division to establish an even stronger presence in health care. Joint-venture agreements and licensing arrangements with existing pharmaceutical companies initially occupied division managements attention. In 1988 Eastman Kodak acquired Sterling Drug, a manufacturer of prescription drugs and such consumer products as Bayer aspirin and Lysol cleaners, to make the company more competitive in the pharmaceutical industry. The acquisition, however, was viewed unfavorably by the companys shareholders because Sterling had a second-rate reputation as a pharmaceutical manufacturer and had no blockbuster drugs in its product line. One year later, this negative perception seemed correct. Intense competition had reduced the sales of Sterlings existing pharmaceuticals while new products under development showed questionable effectiveness during testing.

In 1988 evidence came to light indicating that toxic chemicals from the companys Rochester plant had leached into the areas groundwater, posing a possible health hazard to local residents. In April 1990, the company admitted that it had violated New Yorks environmental law and was fined $2 million. It also agreed to clean up the site of its Kodak Park manufacturing facility and reduce chemical emissions from the plant by 1992.

Eastman Kodak continues its founders legacy of providing customers with quality products and services. Chaired by Kay R. Whitmore, who served as president under Colby Chandler until Chandlers retirement in 1990, Eastman Kodak is exploring various ways to integrate electronics with its conventional silver halide imaging technology.

Vulnerable to economic peaks and valleys and fluctuating currency exchange rates, the companys global initiatives will require a stronger presence in European and Asian markets as trade relations between East and West grow closer. Eastman Kodak possesses a solid foundation of innovation, technology, and material science upon which to build.

Principal Subsidiaries

Eastman Kodak Credit Corporation; Eastman Kodak International Finance B.V. (Netherlands); Eastman Kodak International Sales Corporation (U.S. Virgin Islands); Eastman Technology, Inc.; Torrey Pines Realty Company, Inc.; Cyclotomics, Inc.; Datatape Incorporated; Electronic Pre-Press Systems, Inc.; Interactive Systems Corp.; Northfield Pharmaceuticals Limited; Ultra Technologies, Inc.; Verbatim Corporation; Eastman Chemical Products, Inc.; Holston Defense Corporation; Eastman Gelatine Corporation; Mustang Pipeline Company; Pinto Pipeline Company of Texas; Eastman Chemical International Ltd.; Eastman Chemical International, A.G. (Switzerland); East-manchem, Inc. (Canada); Eastman Canada, Inc.; Kodak Argentina, Ltd.; Kodak Brasileira C.I.L. (Brazil); Kodak Chilena S.A.F. (Chile); Kodak Colombiana, Ltd.; Kodak Mexicana, Ltd.; Kodak Panama, Ltd.; Kodak Export Limited; Laboratorios Kodak Limitada; Foto Interamericana de Peru, Ltd.; Kodak Caribbean, Limited; Kodak Uruguaya, Ltd. (Uruguay); Kodak Venezuela, S.A.; Kodak (Near East), Inc.; Kodak (Singapore) Pte. Limited; Kodak Phillippines, Ltd.; Kodak Limited (U.K.); Kodak Ireland Limited (U.K.); Kodak Pathe (France); Kodak A.G. (Germany); Eastman Kodak International Capital Company, Inc.; Kodak Ges. m.b.h. (Austria); Kodak Oy (Finland); Kodak Nederland B.V. (Netherlands); Kodak S.p.A. (Italy); Kodak Portuguesa Limited; Kodak S.A. (Spain); Kodak AB (Sweden); Eastman Kodak (Japan) Ltd.; K.K. Kodak Information Systems (Japan); Kodak Japan Ltd.; Kodak Imagica K.K. (Japan); Kodak Far East Purchasing, Inc.; Kodak New Zealand Limited; Kodak (Australasia) Proprietary Limited; Kodak (Kenya) Limited; International Biotechnologies Inc.; Kodak (Egypt) S.A.; Komal S.B. (Malaysia); Kodak (Export Sales) Ltd. (Hong Kong); Kodak Taiwan Limited Inc.; Kodak Korea Ltd.; Sterling Drug Inc.

Further Reading

Chakravarty, Subrata N., and Ruth Simon, Has the world passed Kodak by?, Forbes, November 5, 1984; Journey Into Imagination: The Kodak Story, Rochester, New York, Eastman Kodak Company, 1988.

Sandy Schusteff

Cite this article
Pick a style below, and copy the text for your bibliography.

  • MLA
  • Chicago
  • APA

"Eastman Kodak Company." International Directory of Company Histories. . Encyclopedia.com. 26 Jul. 2017 <http://www.encyclopedia.com>.

"Eastman Kodak Company." International Directory of Company Histories. . Encyclopedia.com. (July 26, 2017). http://www.encyclopedia.com/books/politics-and-business-magazines/eastman-kodak-company

"Eastman Kodak Company." International Directory of Company Histories. . Retrieved July 26, 2017 from Encyclopedia.com: http://www.encyclopedia.com/books/politics-and-business-magazines/eastman-kodak-company

Eastman Kodak Company

Eastman Kodak
Company

343 State Street
Rochester, NY 14650
(716) 724-4000
www.kodak.com

For more than 120 years, Eastman Kodak has helped people around the world capture their most memorable occasions on film. The company began in the late 1800s, when Kodak founder George Eastman almost single-handedly took photography from a science practiced by a few professionals and dedicated amateurs to a hobby anyone could enjoy. Kodak sold easy-to-use cameras and film, then developed its customers' pictures.

Photography, however, would not be Eastman Kodak's only business. It provided film and equipment to Hollywood moviemakers and hospitals. Eventually, however, the company's products touched on anything that could record an imagefrom copying machines to videotape. Now, in the twenty-first century, Kodak plays a major role in digital imaging, using the power of computers to capture, store, and display pictures and other information.

From Dry Plates to Roll Film

When George Eastman of Rochester, New York, bought his first camera in 1877, taking and developing a picture was time-consuming, awkward, and messy. Photographers used a "wet-plate" process featuring heavy glass plates covered with a mixture of silver and other chemicals. After a picture was taken, it took an entire day for it to develop. This method was gradually replaced by a system that used a glass plate treated first with gelatin. The "dry-plate" process, first developed in Great Britain, required fewer chemicals to produce a picture.

Eastman perfected his own dry-plate method, including a machine that put the chemicals on the plates. He received a patent on the process in April 1880 and set up a small factorya one-room operation above a Rochester music store. Before the end of the year, he had a local investor, Henry Strong, interested in his business. On January 1, 1881, Eastman and Strong became partners in the Eastman Dry Plate Company.

Film was soon added to the company's product line, as Eastman perfected a way of putting the gelatin-and-chemical mixture on rolls of paper. The paper rolls reduced the weight of cameras and the time it took to take pictures. Eastman also designed a special roll-holder so the film could be used in existing plate cameras. Eastman won international praise for the new system, and he set up a London branch of the company to handle worldwide sales. Eastman also began making cameras. The company's first camera was created in 1887, but only a few were made. The next camera, however, changed photography forever.

Eastman Kodak at a Glance

  • Employees: 78,400
  • CEO: Daniel A. Carp
  • Subsidiaries: BASO Precision Optics, Ltd.; Cinesite, Inc.; E. K. Holdings B.V.; PictureVision, Inc.; Qualex, Inc.,
  • Major Competitors: Canon U.S.A., Inc.; Fuji Photo Film Company; Nikon Inc.; Polaroid Corporation; Panavision, Inc.; CPI Corporation
  • Notable Products: Digital Science digital cameras; EasyShare digital cameras; Advantix cameras; Max one-time use cameras; Elite film; Gold film; Kodachrome film; Ektachrome film; Photo CD; ImageSource copier

Kodak Does the Rest

Built in a small wooden box, the new Eastman camera cost $25. It contained the patented Eastman roll-holder and was sold with a roll of film that took one hundred pictures. After finishing the roll, the photographer sent the entire camera back to Eastman. The company developed the negatives and returned the camera with a fresh roll of film. Eastman called his new camera the Kodak.

The Kodak camera was an instant success. For the first time, anyone could easily take their own pictures. Eastman sold five thousand Kodaks in just six months and began developing new models. A smart businessman as well as an inventor, Eastman immediately put money into promoting his new product. Eastman wrote what became one of the first great advertising slogans: "You push the button, we do the rest."

Timeline

1881:
George Eastman and partner Henry Strong form the Eastman Dry Plate Company.
1888:
The first successful Kodak camera appears on the market.
1892:
Eastman renames his business the Eastman Kodak Company.
1900:
The Brownie camera, priced at $1, makes photography affordable.
1912:
Eastman Kodak opens its research laboratory.
1923:
Kodak introduces home movie-making equipment.
1950:
An improved film for motion pictures earns Eastman Kodak an Academy Award.
1962:
The Instamatic, Kodak's most popular camera ever, appears in stores.
1984:
Kodak begins selling videotape and computer floppy discs.
2002:
Company creates Appairent Technologies to focus on digital technology.

In 1889, a Kodak chemist created a new roll of film made out of celluloid, the first plastic. The new film was transparent and flexible. Sales of the new film took off; all along, Eastman knew that making film and developing would be his true moneymaker. People loved the idea of taking their own pictures, especially on vacations and at family gatherings. The Kodak name was soon known around the world, and it was featured in songs and books. Eastman eventually changed the name of his business to the Eastman Kodak Company.

Controlling the Market

Almost from the beginning, Eastman wanted to dominate the new market he created. He bought photographic patents held by others and introduced innovative new products. Kodak sold a pocket camera in 1895 and the inexpensive Brownie camera appeared five years later. Eastman Kodak opened its first overseas plant in London in 1891, and by 1900 it had distribution sites in other European countries. Going into the twentieth century, Kodak controlled about 90 percent of the photography market.

The Eastman Kodak empire went beyond snapshots and simple cameras. Eastman provided cameras and film to the new motion picture industry, first located in the East and then transplanted to California. Kodak also provided film for X-ray machines, which first appeared in 1896. The company's other innovations included a machine that did not require a dark room to develop negatives, "safety film," which was less flammable than the original celluloid film, and a new film for professional photographers.

By 1907, Kodak had more than five thousand employees worldwide, and in 1912, the company opened its own research-and-development (R&D) lab, making it one of the first companies in the world with this kind of facility. One of its greatest developments was Kodachrome, Kodak's name for color film, which was used for the first time during the 1930s.

George Eastman gave several explanations about the origins of the name "Kodak." According to Eastman biographer Elizabeth Brayer, the inventor liked the letter K because it was "strong and incisive firm and unyielding." It was also the first letter of his mother's maiden name. Eastman thought Kodak was easy to say and easy to rememberimportant qualities for a new product.

Success, however, brought legal problems. A New Jersey minister, Hannibal Goodwin, had filed a patent for celluloid roll film just before Eastman did. A long legal battle over who had claim to the patent ended in 1914, when Kodak paid a $5 million settlement. The next year, a federal judge ruled that Eastman Kodak was an illegal monopoly, which means it controlled too much of the photography industry. The company challenged the decision, but in 1921, Kodak agreed to sell several plants that produced paper and dry-plate technologynot its most important products. Eastman Kodak continued to be the major power in the photography industry, expanding into the new field of home movies and constantly upgrading its film.

Kodak after Eastman

In 1932, George Eastman tragically committed suicide, leaving behind a legacy that would endure for generations. His company expanded to become Rochester's major industry; the complex known as Kodak Park eventually covered several thousand acres; and Eastman had become a leader known for treating his workers fairly. He offered a form of profit-sharing as early as 1899, and added other benefits over the years. In profit-sharing, each worker is given a bonus based on how well the company's sales are going. Eastman's style continued under his successors.

After providing film and cameras to the U.S. government during World War II (1939-45), Kodak returned to amateur and professional photography and filmmaking. New products included a cheaper home-movie camera, improved motion picture film, and better equipment for developing film. In 1953, Kodak formed Eastman Chemical Products to market industrial materials, including plastics and fibers.

By 1962, Kodak's annual sales in the United States alone were $1 billion. The company had just introduced the Carousel, a popular automatic slide projector, and in 1962 it began selling the Instamatic camera. Its film came in a small cartridge that was easy to handle. The Instamatic introduced a new age of simple amateur photography, just as the first Kodak had seventy-five years before. By 1970, the company sold fifty million Instamatics. During that decade, Eastman Kodak also entered into the copier business with its Ektaprint machine. The copier, however, did not gain much ground in the market, facing tough competition from industry leaders Xerox and IBM.

A Cloudier Picture

The Ektaprint experience reflected a growing problem within Kodak. As new technologies emerged, the company was often slow to adapt them, or to take risks with new products it developed. Kodak built a video recorder and camera system before such equipment was common, but it feared customers would not accept the high cost. In 1984, Forbes quoted an unnamed industry analyst looking back at that time: "They were so used to selling $20 cameras, they couldn't believe there was a mass market for $500 machines." In the late 1970s, when VCRs became popular, Kodak did not have a product to sell.

Kodak repeated its copier experience with instant cameras. It waited until 1976 to compete with Polaroid, the pioneer of instant photography. The Kodak camera did not sell well, and the company was sued for violating some of Polaroid's patents. Kodak lost its court battle in 1986, stopped selling instant cameras, and paid Polaroid almost $1 billion in damages.

The Polaroid settlement was part of a string of setbacks during the 1970s and 1980s. In the film market, Kodak lost ground to Fuji, a Japanese company. In cameras, cheaper 35 millimeter cameras competed against Kodak products. And when the company finally entered the video recorder business, it backed a format that was not compatible with the popular VHS system. Although sales were strongtopping $10 billion in 1983profits went down.

During this period, Kodak introduced its Disc camera, which took pictures on a small disc instead of a roll of film. Despite heavy advertising, the camera flopped. The company also entered new businesses, buying Atex, a computer publishing venture; Verbatim, a company that made floppy discs for computers; and Sterling, a drug manufacturer. Most of these new businesses were not successful, but the Atex and Verbatim deals showed that Kodak was preparing to expand even more into electronics and computers.

Entering the Digital Age

One of Kodak's first digital imaging products was the Photo CD. Released in 1991, the CD stored hundreds of photos taken on roll film. The company later introduced new digital cameras, but it faced tough competition from such Japanese companies as Sony and Canon. Through the 1990s, Kodak saw sales fall from $20 billion in 1992 to under $14 billion in 2000. During this time, the company went through several changes at the top. In 1993, George M. C. Fisher replaced Kay Whitmore as chief executive officer (CEO). At the beginning of 2000, Fisher was replaced by Daniel Carp. In a company statement issued when he took over, Carp said, "The picture business today is on the verge of the greatest breakthroughs since George Eastman put photography in the hands of consumers. We are changing the ways our customers and consumers can bring new uses and meaning to picturesno matter what the technology.

Fighting Pollution

From its founding, Eastman Kodak has been a chemical company, since photography depends on special light-sensitive chemicals to produce pictures. By the 1980s, Kodak Park in Rochester, New York, included about two hundred manufacturing buildings, many of which produced chemical waste. In 1988, New York officials learned that some chemicals had entered groundwater near Kodak Park, posing a possible health hazard to local residents. In 1990, Kodak admitted it had violated state environmental laws and paid $2 million in fines.

Kodak's environmental problems, however, were not over. Although the company pledged to cut its chemical emissions, it remained New York's largest polluter through most of the 1990s. Housing values fell because of the pollution, and Kodak offered to help pay relocation costs for people who wanted to move. In October 1994, Kodak was fined $5 million by the U.S. government for breaking federal pollution laws. That fine was reduced from $8 million, because Kodak promised to fix environmental problems. By 2000, Kodak reported it had reduced emissions at Kodak Park by almost 80 percent from 1987 levels.

The changing lineup of Kodak executives faced similar issues: keeping profits up in a traditional business while moving farther into digital imaging. In 2001, Marty Coyne, head of Kodak's commercial business group, told Ziff Davis reporter Michael Ryan, "It's going to cost money to get the digital pieces in place. We have to invest in our future." By then, Kodak had several successful digital products on the market, including the best-selling digital camera and a device that takes digital pictures and plays music recorded in the MP3 format. In 2002, the company created a new firm, Appairent Technologies, out of its R & D lab. Appairent focuses on the wireless transmission of digital information.

Cite this article
Pick a style below, and copy the text for your bibliography.

  • MLA
  • Chicago
  • APA

"Eastman Kodak Company." Leading American Businesses. . Encyclopedia.com. 26 Jul. 2017 <http://www.encyclopedia.com>.

"Eastman Kodak Company." Leading American Businesses. . Encyclopedia.com. (July 26, 2017). http://www.encyclopedia.com/reference/trade-magazines/eastman-kodak-company

"Eastman Kodak Company." Leading American Businesses. . Retrieved July 26, 2017 from Encyclopedia.com: http://www.encyclopedia.com/reference/trade-magazines/eastman-kodak-company

Eastman Kodak

EASTMAN KODAK


Headquartered in Rochester, New York, the Eastman Kodak Company was one of the leading image photography businesses in the United States. The company had eight major divisions: Consumer Imaging; Kodak Professional, Digital and Applied Imaging; Entertainment Imaging; Health Imaging; Commercial and Governmental Systems; Business Imaging Systems; Office Imaging; and Global Customer Service and Support. Kodak was the top U.S. manufacturer of 35-millimeter (mm) film, capturing close to 75 percent of the market at the end of 1998 and 70 percent at the beginning of 1999. But Kodak shared the lead with Fuji Photo in worldwide film sales. Kodak also manufactured cameras, information systems (including writable CDs and software), and medical imaging technology.

The Eastman Kodak Company traces its origins to 1881 when George Eastman (18541932) founded the Eastman Dry Plate Company. A bank clerk from Rochester, New York, Eastman had spent three years developing the dry-plate photography process, which was a vast improvement over the sloppy and awkward wet-plate process in use at the time. Determined to develop a camera that was as easy to work as a pencil, Eastman next produced a film consisting of gelatin coated paper packed in a roll that could be used in any dry-plate camera. In 1884 the company changed its name to Eastman Dry Plate and Film Company.

In 1888 the company introduced the first readily portable camera. Selling for $25, the camera held enough rolled film for 100 photographs. Customers developed the film by sending it back to Rochester, where the company printed the photographs and refilled the camera with a new roll. The product was advertised with the slogan, "You push the button, we do the rest." The small sized, easy to use camera revolutionized photography by opening it up as a hobby to thousands of people.

In 1892 Eastman renamed his business again, calling it the Eastman Kodak Company. Eastman chose the name "Kodak" after experimenting with combinations of letters starting and ending with the letter "k," which the founder thought was a "strong, incisive sort of letter." In addition, to register his cameras for trademark protection in Britain, Eastman needed to use a word that did not already exist in the English language. By 1897 Eastman Kodak had manufactured 100,000 cameras, but Eastman wanted to make photography more convenient and less expensive. In 1900 he did so, introducing the first Brownie Camera. It sold for $1 and used a 15-cent roll of film.

During the next two decades Eastman Kodak continued introducing new products and technologies. In 1902 it offered a machine that developed film without a dark room. During World War I (19141918) Eastman Kodak developed products to help U.S. troops fighting in Europe, including aerial cameras and an unbreakable lens for gas masks. In the 1920s Eastman Kodak rolled out 16-mm motion picture film, a 16-mm motion picture camera, and the Kodascope projector. Despite George Eastman's death by suicide in 1932, Kodak continued to thrive. In 1935 the company introduced Kodachrome film, the first commercially successful amateur color film.

Kodak's success, however, was not without some mistakes in judgment. During the 1940s the company rejected Edwin Land's offer to have Kodak market the instant camera he had invented. Land later went on to found a firm that competed with Kodak, the Polaroid Corporation. Bouncing back in the 1950s, Kodak brought out the inexpensive Brownie hand-held movie camera and the Brownie projector. In 1953 Kodak formed the Eastman Chemical Products Company to produce chemicals, plastics, and fibers used in film production, poising itself to serve the burgeoning new market of photofinishing. Five years later Kodak unveiled the first fully automated slide projector.

In 1963 Kodak again revolutionized amateur photography with its introduction of the Instamatic camera that used a film cartridge instead of a roll, eliminating the need to load film in the dark. Within ten years Kodak had launched five different, immediately successful pocket models of the Instamatic. By 1976 the company had sold about 60 million such cameras, 50 million more than the nearest competitor.

Kodak's commercial success was tempered by its legal setbacks. In the early 1970s several smaller companies filed a series of antitrust lawsuits, alleging that Kodak had illegally monopolized the photography industry. The most famous of these cases involved Berky Photo, which accused Kodak of conspiring with Sylvania Companies and the General Electric Company in developing two photographic flash products. The case was settled for $6.8 million in 1981. Kodak also lost a patent infringement suit instituted by Polaroid during the 1980s. As a result, Kodak was forced to pay $925 million in damages, cease production of instant cameras, and recall all instant cameras that had been sold to customers. In 1997 the World Trade Organization (WTO) denied Kodak's claim that it had been refused fair access to Japanese markets.

As its market share began dwindling in the 1990s, Kodak took several actions to reverse its fortunes. The company first began selling its peripheral businesses in chemicals, pharmaceuticals, and household products. Kodak then refocused its energies on its core imaging business, investing heavily in digital photography. In 1992 Kodak introduced the Photo CD system, allowing photofinishers to record 35-mm images on compact discs, and enabling customers to view the images on their televisions and personal computers.

Kodak also formed a strategic research alliance with some of its competitors, including Fuji Photo, Canon, Inc., Nikkon Corporation, and Minolta, Co., Ltd. This endeavor resulted in the 1996 release of the Kodak's Advanced Photo System (APS), featuring a drop-in film cassette, a choice of print formats, and improved picture quality. But sales continued to decline, and in 1997 Kodak announced a restructuring program whereby it would reduce the company's workforce by 20 percent before the end of the century. By 1999 Kodak could boast that it manufactured a line of digital cameras among the best in the world. But the cost of such cameras, between $700 and $1000, was too high for most consumers.

See also: George Eastman


FURTHER READING

"Pretty Picture." Discount Merchandiser, February 1, 1999.

Dickinson, Mike. "RPD's focus on combating crime turning digital." Rochester Business Journal, November 6, 1998.

Garfinkle, Simson L. "Not Exactly Picture Perfect, Kodak Digital Cameras Among Best Around But Very Expensive." The Boston Globe, April 8, 1999.

"Eastman Kodak Company," [cited April 10, 1999] available from the World Wide Web @ http://www.hoovers.com/.

Cite this article
Pick a style below, and copy the text for your bibliography.

  • MLA
  • Chicago
  • APA

"Eastman Kodak." Gale Encyclopedia of U.S. Economic History. . Encyclopedia.com. 26 Jul. 2017 <http://www.encyclopedia.com>.

"Eastman Kodak." Gale Encyclopedia of U.S. Economic History. . Encyclopedia.com. (July 26, 2017). http://www.encyclopedia.com/history/encyclopedias-almanacs-transcripts-and-maps/eastman-kodak

"Eastman Kodak." Gale Encyclopedia of U.S. Economic History. . Retrieved July 26, 2017 from Encyclopedia.com: http://www.encyclopedia.com/history/encyclopedias-almanacs-transcripts-and-maps/eastman-kodak