Kodak on the brink of bankruptcy?

Eve Troeh Jan 5, 2012

Steve Chiotakis: Shares of Eastman Kodak are down another 4 cents a share today — which doesn’t sound like much, but the stock is trading at under 50 cents a share. The one time photo-giant could file for bankruptcy soon.

Marketplace’s Eve Troeh gives us a business history lesson.

Eve Troeh: Eastman Kodak is an iconic brand, like General Motors or IBM. When people think about Kodak disappearing…

John Steele Gordon: There’ll be a certain degree of sadness. I mean all of us grew up with that orange and red K.

That’s business historian John Steele Gordon. He says while Kodak didn’t lose to direct competition — like GM — it is to blame for its own troubles.

Gordon: I think they suffered from monopoly disease because they had — for decades — they had about 90 percent of the American film market and 85 percent of the American camera market.

The company that invented modern photography woke up too late to the digital revolution. Steele sees parallels in IBM. When personal computers showed up on every desktop in the 1980s, IBM nearly died. It bounced back with a new business strategy. Kodak may try that with printers and photo software, but it can’t bring back film.

Gordon: I mean that’s like trying to revive the buggy whip industry. There’s not much we can do about that.

Ironically, while the name Kodak may fade to black, Eastman is doing great. It’s the chemical company Kodak spun off to process raw materials for its film. Eastman’s moved beyond film into niche chemicals for all kinds of industries. It’s expected to be around a long time.

I’m Eve Troeh for Marketplace.

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