Case Study: RISE and FALL of Polaroid Corporation.
Polaroid Corporation was an American manufacturer of cameras, film, and optical equipment founded by Edwin Herbert Land, the man who invented instant photography.
Land developed the first instant camera in 1948. From that time onwards the instant camera was the main product of the company. 90% of the company’s efforts were tied up to this product over the next decades. Within four decades, sales of the firm grew from $142000 to over $1 billion.
Polaroid’s strategy in the 1950s was driven by Edwin Land’s vision and his strong belief that technological innovation would drive the business in the market for photographic products. Polaroid continued to perfect their camera, releasing new models and inventing instant color photography.
Polaroid was operating in a fast-growing market. Total US domestic retail sales to amateurs grew from $1.4 billion in 1962 to $6.6 billion in 1975. At the same time, the number of snapshots being taken annually by amateur photographers increased rapidly from 2.2 billion to 7 billion.
Despite being a catalyst for innovation and successful business, polaroid became one of the companies plagued by modernity. Polaroid was a victim of patent violations and poor company policy and just couldn’t adapt fast enough. The business principles that kept them successful sstarted to fail right around the year 2000.
One of the most exciting products to come out of Polaroid was Polavision, a color home video system that took decades to develop. Unfortunately, by the time it hit the market in 1978, it wasn’t that innovative anymore.
Polavision resulted in a loss of around $15 million. The loss started a new trend within the company. The executives at Polaroid started to fear releasing innovative products and taking another hit.
Polaroid developed fully functional digital cameras as early as 1996, but these products never saw the light of day. Digital photo resolution wasn’t very good back then, and the company did not want its name associated with such low photographic quality.
Polaroid’s competitors capitalized on the growing demand for digital photography. Polaroid got left in the dust because it didn’t get there ahead of the competition.
By 2001, Polaroid finally declared bankruptcy, the company was then picked by Vultures and the last camera was produced in 2006. Though this wasn’t the complete end, as the iconic instant camera rose from ashes when Florian Kaps and Andre Borman partnered with Marwan Saba to acquire the Polaroid brand and IP through crowdfunding under the umbrella of Impossible Project, which brought the camera back to the shelves.
Polaroid collapsed because of two major reasons– a misguided business model and fear of being innovators in their field. Polaroid could have dominated today’s market, given all of their early research into digital photography.
But the fear of failure took root in the company very early on. One can’t be too fearful of business failure in order to stay successful.
Branching out, innovating, and reading the market are critically important skills.
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