Polaroid Disruptive Innovation

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Group 8

POLAROID- Family ImagingMarket

SUBMITTED BY:

ArpitaBahadurGauravKumarManish GuptaPavan KumarRanjini Ballal

Submitted To:

Prof. Rahul GuptaChowdary

Disruptive Innovation and the Bankruptcy of Polaroid:

In 2001, Polaroid declared bankruptcy. The disruptive shift from analog todigital photography put this industrial giant out of business.

The beauty of Polaroid cameras was that photos could be viewed instantly. When digitalimaging enabled this to be done in a much cheaper way the competitiveadvantage of Polaroid was destroyed within only a few years.Polaroid made their money by selling cheap cameras and then charge a lot of money for the Polaroid film. Since film is used continuously this turned out tobe a fantastic business model with fantastic profits. Just like Gillette makesgreat money by selling razor blades, Polaroid made great money by sellingfilm. The main source of profit is not the razor or the camera; it’s thecontinuous consumption of blades and film. The firm made improvements to this technology over the decades. Polaroidexperienced a remarkable growth and soon became ahouseholdname.Between1948 and 1978 sales grew 23 percent and profitsgrew 17 percent, both annually.

This remarkable success was based upontechnological innovation. Hence, Polaroid became a technology-drivencompany which always looked for new challenges. Edwin Land himself heldover 500 patents.Polaroid believed firmly in innovation: ‘Do not undertake the program unlessthe goal is manifestly important and its achievement nearly impossible. Donot do anything that anyone else can do readily.’ The firm was so successful and profitable that Kodak just couldn’t keep awayfrom the instant photography business. Kodak made its own version, wassued by Polaroid for huge patent infringements and had to leave the marketin 1986.

Launch of Digital Photography:

Sony launched the first digital camera, the Mavicain 1981. The photos werestored on a floppy disk and had a photo quality of 0.3 Megapixel. During the1980’s digital imaging was still in its infancy. The different ’Mavicas’ thatwere launched by other firms did not turn into any commercial successes.

In 1986 Polaroid invested 30 million USD in a new unit called”TheMicroelectronics Laboratory”.

In 1989, more than 40 percent of Polaroid’sR&D budget was spent on exploring various digital imaging technologies.However, being a technology-driven company, Polaroid always regarded theshift to digital imaging as a technological challenge, not as a marketchallenge. It was assumed that once the technology is ready, it will becomeprofitable, somehow.

Therefore, Polaroid never developed any marketingcapabilities for digital imaging, or a new business model. It was assumedthat the firm should stick to its fantastic razor blade business model, since itwas so profitable.So technologically speaking, Polaroid was well prepared for the shift to digitalimaging. It even had a sensor of 1.9 megapixels in 1989. Butin terms of marketing and business models, it was never prepared. And as we know,disruptive innovation is mainly a business model challenge.

Polaroid’s mistakes:

Mistake1: Poor Promotional/Ad CampaignsSolution: Market Penetration

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Polaroid’s marketing strategy proved to be a failure as a result of “MARKETING MYOPIA”. The failure is at the top. The executivesresponsible for it, in the last analysis, are those who deal with broadaims and policies. The company has to do what survival demands. Ithas to adapt to the requirements of the market, and it has to do itsooner rather than later. But mere survival is a so-so aspiration.Anybody can survive in some way or other, even the skid-row bum. The trick is to survive gallantly, to feel the surging impulse of commercial mastery, not just to experience the sweet smell of success,but also to have the visceral feel of entrepreneurial greatness.

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The PUBLIC RELATIONS campaign of Polaroid was unsatisfactory. Theadvertising campaigns didn’t suit the requirements of mass public.Slowly Polaroid was creating a niche for itself due its high prices andexpensive films.Although Polaroid associated itself with Nascar racing competition, itcouldn’t create a successful impact with the mass. Polaroid’s efforts to

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