Kodak and Facit

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Kodak and Rochester had a Swedish counterpart in Facit and Åtvidaberg.

Transcript of Kodak and Facit

  • 1.There are many striking similarities between Kodak and Facit, a former Swedish manufacturer of mechanical calculators.

2. This presentationwill put the two companies next toeach other, illustrate and seek to explain those similarities. 3. Facit prospered in a kingdom called Sweden. 4. The company was founded in a smalltown calledtvidaberg. 5. Kodak was founded in Rochester, NY. 6. Along the Genesee river in Rochester 7. The visionary George Eastman built the Eastman Kodak company. 8. Along the river in tvidaberg 9. A man named Elof Ericsson foundedtvidaberg Industries (which was named Facit later on). 10. The successes of these companies were basedupon two major product innovations. 11. In the Kodak case it was the Roll film 12. a product that empowered people to take pictures on their own. 13. In the Facit case it was the worldsfirst ten-digit calculatingmachine 14. A masterpiece of mechanical engineering. 15. Both companies grew rapidly 16. And became sources of national pride. 17. As Kodak grew, Rochester grew. More and more people moved here from the countryside in order to get a job at the company. 18. In Sweden, people moved to the smalltown tvidaberg. Here, there were plenty of jobs at Facit. 19. A lot of people travel to Facit for work. 20. Basically, these two cities wouldnt have grown intowhat they were without Kodak and Facit. 21. The two companies provided their populations with well paid jobs 22. from the cradle 23. to the grave 24. A job was a job for life 25. And it gave a stable income for a good family life. 26. Those who didnt work for the company, either worked for suppliers, or the local government, whichobtained its tax revenues from the firm. 27. Willing to cross party boundaries for the company. 28. Mr. Eastman made a huge fortunefrom his success with Kodak 29. He lived here 30. Mr. Ericsson lived here 31. down by the lake 32. ministers and directors came from all over theworld in order to meet here and build networks. 33. These two men alsomade sure to take care of the local community. 34. Elof renovated the soccer stadium and donated vast amounts of money to the local team. 35. Mr. Ericsson also re-built the local churchwhere he currently rests in peace. 36. There are at least 30 organizations that wereeither created or partly funded by Eastman. 37. The University of Rochester 38. The EastmanSchool of MusicStudent LivingCenter 39. The Eastman Dental Center 40. In Rochester, people refer to Kodak asThe Great Yellow Father 41. Both men are remembered more than half a century after their death. 42. This statue of Elof Ericsson was raised by the company and its employees in 1963. 43. When Elofs son Gunnar took over as CEO, he managed the company in a similar way 44. To sum it up: Rochester became a Kodak town 45. And tvidaberg became a Facit town. 46. But the companies had much more in common 47. They both enjoyed a considerable global expansion. 48. Both companies were very vertically integrated owning and controlling the entire value chain 49. Kodak signs can still be found everywhere throughout the world. 50. Just like Kodak, Facit controlled theentire value chain 51. From the production of special components that were needed in the products 52. To the close relationship with the end customer. 53. Both these companies were turned upside down by the electronic revolution 54. In 1971-72, Facits coggwheels were substituted by integrated circuits 55. The same thing happened to Kodakabout 30 years later. 56. Both companies lost their technological leadership 57. for the simple reason that the technology was now all about electronics. 58. The value ofproducing specializedparts was renderedobsolete 59. Since those parts werent needed anymore. 60. Controlling theend of the value chain was also an asset that lost its value for bothcompanies. 61. People were not consuming film anymore 62. And they stopped buying calculators from a specialcompany with a huge sales organization. 63. Both companies went through some tough times 64. And so did their respective societies. 65. Rochester and tvidaberg had become very dependent upon their respective companies 66. and this started to become painfully obvious. 67. A job at Kodak or Facit used to be a job for life. Not anymore. 68. Tax revenues decreased at a furious pace when all those jobs were lost. 69. While both cities have undergone some major changes, they havent ended up as ghost towns. 70. Summing up once again, the Kodak and Facit storiesare strikingly similar, even though the companieswere in different industries, in different countries and at different points in time. Why? 71. Industries tend to grow and prosper in certain ways. 72. Theyre founded around a product innovation, which is then further developed andintroduced throughout the world 73. This is often done by an entrepreneur who spots the new opportunity. 74. As industries grow and prosper they become increasingly vulnerable to technological change. 75. The vertical integration was necessary in order to handle a complex product. 76. When the technology changed and the product became much simpler, it did not require the same dominance of the value chain. 77. And since the companies once upon a time made their cities grow, those towns will go through somestructural changes when the firm declines. 78. Image attributions 79. Thanks to Brukskultur tvidaberg och the municipal government of tvidaberg. The Facit archive is a fantastic source. 80. Christian Sandstrm is a PhD student at ChalmersUniversity of Technology inGothenburg, Sweden. He writes and speaks about disruptive innovation and technological change.www.christiansandstrom.org christian.sandstrom at chalmers.se