I did not have a camera when I went to Clark two weeks ago. Realizing what I would miss if I went home without a picture of the event I was attending and the development that was going on at Clark and the twin cities of Angeles and San Fernando in Pampanga, I decided to go to one of the two SM Malls in the area to buy a camera. I bought the cheapest unit displayed for the new line of cameras offered by Canon on sale. The unit I bought was indeed cheap at less than P4,000 compared to the other brands also offered on sale, including that of Kodak. Last Monday night I saw displayed and offered on sale at SM a Kodak camera that has better features but offered at about the same price that I paid for the one I bought in Pampanga. Sight!
Why do I talk of cameras this time. It stems from the Yahoo Internet article that I read yesterday: The picture for Kodak is not pretty?
What is not pretty in Kodak’s picture. With its advanced technology, nothing could be wrong with a picture that you take with a Kodak camera. What is wrong is the trouble that Kodak is facing these days with its finances. According to the author, Kodak, which invented the digital photography, failed to make a profit since 1997. With dwindling revenues, it was forced to lay off thousands of its workers. In 2004, the company was removed from the Dow Jones Industrial Average after 74 years on the blue chip index. Last year it was also removed from the S&P 500.
The author says that last Friday the Kodak stocks went down by 54 percent after news came out that it was hiring a law firm that happens to be an expert on bankruptcy and restructuring. The company denied it was filing for bankruptcy but, true or not, the damaged is already done.
In our school when I was young, we usually took pictures of our class before the end of the school year. In those days, we did not say, “Magpa (or) nagpa-picture mi.” We said, “Mag (or) nagpa-Kodak mi.” That is the strength of Kodak in the picture-taking business before. It is not so now. What is wrong with the Kodak camera now?
Again nothing is wrong with Kodak camera except that competition and rapid development in picture taking technology has rendered Kodak unprofitable these days. There was Fuji from Japan in the 1980s, the author says, that started to compete with Kodak strongly. Now I cannot count in my fingers anymore the number of companies producing and selling cameras globally which was once dominated by Kodak for up to 80 percent of the total market. Add to that the ease with which one can take a picture with a cell phone and one can see how much money is moved away from the Kodak today.
Ironically, according to the author, what killed Kodak was its own invention of the digital technology, which it failed to leverage to its own advantage for more revenues and profits. Kodak made a lot of money with the films that we used only once with an old camera. Now there is very little money that it can make from the memory card that we can use many times over before it is thrown away or lost.
Was there mismanagement and complacency at Kodak? The author said “probably” but that in the end the company was mainly a victim of what economists call “creative destruction.” The rapid change in technology was simply too much for Kodak to handle.
Remember the once-ubiquitous typewriter in the office? Maybe it is only the Philippine National Police in Cebu that is using it now. Where is the pager? Never see one now. In fact I have never used it. It went out of the market before I felt the need for it. The cell phone killed it. The same happened to so many products or business models before.
When I was small, my father would bring me to a tailor to have my polo or trouser made. There was no mall or department store like what we have now where all we have to do is chose the color, design, size and the material used when we buy new clothing. New business models wiped out the once-thriving tailoring shops. I can make an endless list of business or product that once were thriving before but are gone now. I can see a lot more of products sold or business models operating today. They too will be gone in time. Which is to say that no one product or business model is safe today. Rapid changes in the way business is done and development in technology make many business models or products of today disappear before we know it.
Thus, it is not easy to be in business unless you invest a lot of time watching what is going on and to make adjustments before business is lost. Yet I find that many of our business in Cebu are just doing what they had been used. They may still exist for a time but they would never reach their peak before they are swept away by the increased level of competition and rapid development in technology.
When our business in Cebu are less forward looking, we, too, will losr in the global fight for the market like what seems to be happening now to our much-vaunted locally crafted furniture and other export items.
In fact, as whole, Cebu must redesign itself and adopt a new strategy if it wants to take advantage of the new opportunities that comes with the new normal global economy where the emerging countries lead the advanced countries in investment and output growth. Failing to innovate and create a new image for Cebu, we can easily lose to Clark or even to Davao in our quest for investments and development. Unfortunately, this is what I see when we cannot even agree whether to widen our streets or put more flyovers on it.