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To: Jill who wrote (25864)	5/19/2004 6:23:55 AM
From: Road Walker	Respond to of 60323

Jill, re: the essence of Kodak was film I would argue the essence was photography. John

To: Jill who wrote (25864)	5/19/2004 9:19:47 AM
From: Art Bechhoefer	Read Replies (1) \| Respond to of 60323

>>the essence of Kodak was film, not digital<< Jill, the essence was imaging, not necessarily by film. The first mass production Kodak cameras used paper with a sensitized emulsion. The negative image was then turned into a positive contact print by shining a light through the paper containing the negative. The result was an image that lacked a lot of detail, as you can imagine, but that still fit in with the idea that this was something suitable for the average person. You could go to a photo studio for a better quality photo. I keep trying to find examples of companies that were able to transform themselves from outmoded technology to new technology. I must confess that they are few and far between. One of the few was Boeing, which found little demand for aircraft after World War I and converted a large part of its factory into making furniture, only to return to aircraft bodies as interest in commercial aircraft picked up in the 1930's, as the industry went from wood to aluminum. Larger, established companies, as you note, rarely are able to make major innovations or to implement innovations that they have developed through their own initiative. Kodak, for example, at one time was the most advanced company in sensors for digital imaging. But they limited their research to developing high resolution sensors for scientific use, rather than for a consumer based market. Smaller companies like SanDisk typically are the greatest repositories of innovation, though not necessarily the companies that get the greatest growth from the innovation. Larger companies like Samsung often become the most profitable because they concentrate on dominating a particular sector or market niche. But smaller companies often merge with larger companies, creating huge profits for shareholders who got in early and hung in there. Larger companies often innovate through acquisitions. General Electric, for example, has changed its focus from a company that originally concentrated on light bulbs and electric generating equipment. Idle capital often goes into new industries, as happened with forest product money in Finland reinvested in a company to make cell phones (Nokia). Art