Polaroid Case Study 365v3m

Polaroid Case Study

Objectives

A Case of Disruptive Innovation

Be able to briefly understand about the term: “Disruptive Technology/Disruptive Innovation” To learn some lessons on innovation management through Polaroid’s story 1-1

What is Disruptive Innovation?

History of Disruptive Innovation

A disruptive technology or disruptive innovation is an innovation that improves a product or service in ways that the market does not expect, expect, typically by being lower priced or designed for a different set of consumers. Disruptive innovations can be broadly classified into lowlow-end and newnew-market disruptive innovations. A lowerlower-end disruptive innovation is aimed at mainstream customers for whom price is more important than quality. quality. Whereas a newnew-market disruptive innovation is often aimed at nonnon-consumption (i.e., consumers who would not have used the products already on the market).

The term disruptive technology was coined by Clayton M. Christensen (Professor at Harvard Business School) and introduced in his 1995 article Disruptive Technologies: Catching the Wave. Wave. The article is aimed at managing executives who make the funding/purchasing decisions in companies rather than the research community. He describes the term further in his 1997 book The Innovator's Dilemma. Dilemma. In his sequel, The Innovator's Solution, Solution, Christensen replaced disruptive technology with the term disruptive innovation because he recognized that few technologies are intrinsically disruptive or sustaining in character.

1-2

Examples of disruptive innovations/ disruptive technology

Examples of disruptive innovations Disruptive Innovation/ Technology

Displaced or Marginalized technology

Desktop Publishing

Traditional Publishing

able Digital Media

CDs, CDs, DVDs

Mobile VoIP

GSM and Roaming

Word Processor

Typewriter

Plastic

Metal, Wood, Glass etc.

Minicomputers

Mainframes

Digital Photography

Increasingly all chemical photography, Instant photography (Ex: POLAROID)

1-3

(A graphic presentation) 1-4

1-5

Brief History of Polaroid

The Story of Polaroid • Even more than 3 decades old, the story still hold some very useful lessons to today’ today’s managers on how to manage innovation. • In 1972, 1972, Polaroid launched the SXSX70, the first fully integrated instant camera and film system, hailed by Fortune magazine as one of the greatest industrial inventions of the time. In achieving this amazing innovation, which made the cover of Life magazine, Polaroid also incurred a huge organisational and strategic cost.

Founded: Founded: 1937 (original company) Founder: Founder: Edwin H. Land Headquarters: Headquarters: Concord, Massachusetts, USA

June 1972: 1972: Launched the SXSX-70, the 1st fully integrated camera & film Oct 2001: 2001: Polaroid Corporation filed for bankruptcy. It’ It’s assets (including the "Polaroid" name) sold to a subsidiary of

1-6

Brief History of Polaroid (continue) April 2005: 2005: Petters Group Worldwide acquired Polaroid holding Company while Flextronics purchased Polaroid's manufacturing operations which is later sent its manufacturing to China. It stopped making Polaroid cameras in 2007 and will stop selling Polaroid film after 2009, 2009, to the consternation of some s. The renamed "old" Polaroid now exists solely as an istrative shell.

What had actually happened to the highly innovative company like

? 1-9

Before we begin the story let’s look at the video of Polaroid’s SX-70

The Story of Polaroid: Scene 1 Before innovation radically altered things, things, Polaroid are only:  A small component manufacturer.  Manufacture positive part of the instant film, the Pod.  Focus more towards product design only . The technology behind the SXSX70 was so new that Polaroid's previous production network would have to be shakenshaken-up. up.

This video is an ment of the late SXSX-70 model of Polaroid. Polaroid. It was hailed as the greatest industrial inventions of the time similar to the way Apple was seen in the 80s or even now. 1 - 10

Positive & Negative part of the instant film 1 - 11

The Story of Polaroid: Scene 2

The Story of Polaroid: Scene 3 No doubt, the innovation was groundgroundbreaking. The technology was considered "technologically impossible" at that time. Polaroid were pushing the boundaries of not only technology but of science itself. They needed a chemical compound they called the 'opacifier ', which would 'opacifier', cover the picture when the picture had developed. So they had to experiment, they didn't know if it was possible. But they decided to do it.

The rest was outsourced. outsourced. The manufacturing of the camera was contracted out to a number of companies such as Bell & Howell, Howell, and Kodak produced the colour negatives for which it received $1 for every film sold and reportedly made a prepre-tax profit of 80%. 80%. 1 - 12

1 - 13

The Story of Polaroid: Scene 4

The Story of Polaroid: Scene 5

Polaroid decided to do it by themselves even tough there are so many uncertainties. Their seemingly calm and successful relationship with Kodak was soon to be rocked by the new invention.

With the declaration of war, Polaroid decided to develop the new film ininhouse to outplay Kodak In addition to taking on all other negative production, saddling it with new and unwanted manufacturing expenses. Plus with the new pressure to compete with Kodak they decided to make the SXSX-70 more complex to beat Kodak and convince investor.

Rather than rere-negotiating their existing contract, contract, Kodak broke off all relations with Polaroid, Polaroid, essentially saying: "How dare you take us out of your production network.“ network.“ Later Kodak decided to compete with Polaroid. 1 - 14

The Story of Polaroid: Scene 6 Later they decided to fit battery to every film rather than to the camera! A decision out of its time. Try to outsource and negotiate with a battery manfacturer, manfacturer, ESB. ESB. ESB tried to take the challenge but later failed. Dispute with ESB. Later Polaroid decided to take battery manufacturing inin-house as well and became the biggest manufacturer of batteries in America that they never wanted to be.

1 - 15

The Story of Polaroid: Scene 7 By the end of this innovation, Polaroid had become a fullyfully-fledged verticallyvertically-integrated manufacturing company, which in the beginning they never intended to be. The advancement of digital photography made bad situation worse even tough they are among the early manufacturers of digital cameras. This is the point when Polaroid decline had started. Its highly revered, charismatic and brilliant President, Edwin Land became the first casualty of this affair. Polaroid never recovered, recovered, ultimately filing for Chapter 11 in October 2001.

1 - 16

1 - 17

Lesson Learnt

Reference

It is imperative for companies to foresee/predict disruptive technologies that will effect the survival of the organization in in the future. Seemingly small, technical decisions can have disproportionately large effects that "ripple" across the overall production system and supply chain network and beyond to vendor networks and the financial markets. Companies should have also curbed its creativity and innovativeness, not to “overover-innovate” innovate” Managers should make an effort to learn about the technologies embodied in their product. product. Tinkering with product architecture without realising how the production network works, competencies are arranged and modules are configured, can wreak havoc and lead lead to unexpected and undesirable consequences. Technical innovations have social analogues, analogues, implications for the network in which the firm is embedded. In Polaroid's case, technical technical decisions taken in the course of innovation ended up alienating important stakeholders, eventually leading to the fall of this highly highly creative company. 1 - 18

Garud, Garud, R, and K Munir. Munir. "From transaction to transformation costs: The case of Polaroid's SXSX-70 camera." Research Policy 37, no. 4 (2008): 690690-705. Carr, Kathleen. Polaroid Manipulations: A Complete Visual Guide to Creating SXSX-70, Transfer, and Digital Prints (Photography for All Levels: Intermediate). Intermediate). london: london: Amphoto Books, 2002. Coupland, Coupland, Douglas. Polaroids from the Dead. Dead. New York: Harper Perennial, 1997. Iizuka, Iizuka, Naomi. Polaroid Stories. Stories. Woodstock: Dramatic Pub Co, 1999. Nicholson, Brian. "Transaction Costs and Control of Outsourced ing: Case Evidence from Britain and India." Social Science Research Network Working Paper Series 37 (2006): 16. Other online references used: http://www.wikipedia.com http://www.wikipedia.com,, http://www.jbs.cam.ac.uk/interactive/expert_comment /, http://www.jbs.cam.ac.uk/interactive/expert_comment/, http://www.polaroid.com http://www.polaroid.com

1 - 19