Kodak was a household name back in the days when laying your hands on a photograph meant taking out the roll of film in your camera and having it developed. Kodak attained a powerful market position in the 70s, accounting for 85% of the camera and 90% of film sales in the US. However, the firm’s failure to capitalize on digital photography, which was one of its many inventions, led to a downward spiral trend. So devastating were the effects of the digital era on Kodak that the company declared bankruptcy in 2012. However, the COVID-19 pandemic has saved Kodak as President Trump’s Government promised to loan the company capital to venture into the production of pharmaceutical ingredients for combating the virus.
Kodak’s Jump From a Fallen Photography Giant to a Pharmaceutical Producer
Kodak’s fear of hurting their film sales, if they capitalized on the newly invented digital camera, was a fatal mistake that came with adverse repercussions – the company exited the digital camera industry in 2012.
Over the last several years, Kodak has focused on the production of advanced chemicals. However, there has not been much to show for the effort. Until a few days ago, Kodak was another household name heading down the drain.
In an unexpected turn of events, the Trump administration has summoned Kodak and awarded the organization a contract to make ingredients for the production of generic drugs for COVID-19. The firm is a beneficiary of a government program to reduce the country’s foreign dependence on medical supplies. Nothing has made the implications of this foreign dependency clearer than the COVID-19 pandemic.
Kodak’s Failure to Adapt to the Digital Era Made It a Relic; Will the COVID-19 Pandemic Change That
Trump’s administration has given Kodak $765 million to produce ingredients for COVID-19 drugs. Many are heralding this as a big comeback by Kodak. However, some critics think that Kodak will be hard-pressed to manufacture these ingredients at a price that will compete with the offshore supplies. Only time will tell whether this is a comeback for Kodak or another opportunity to continue ‘surviving.’ Nevertheless if the immediate response to this news is anything to go by, better days lie ahead for Kodak.
Kodak Gains From COVID
Since winning a government loan to produce pharmaceutical ingredients, Kodak’s market valuation and the share price has risen consistently. In just a few days, the firm’s shares had more than tripled.
Kodak began the production of drug ingredients about four years ago. With the recent government loan, the firm is set to expand the production of medical elements in their facilities.