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Leica Camera A Boutique Firm Faces A World Of Change Case Solution

Solution Id Length Case Author Case Publisher
1689 2492 Words (8 Pages) Bill Chapman, Gerry Yemen, S. Venkataraman Darden School of Business : UV6794
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The camera has been one of the more ingenious inventions of the past two centuries. It has allowed the development of many industries such as media, tourism and arts. It has crafted its place in documenting the history and enabled humankind to communicate on an ethereal level that was not thought humanly possible prior to its invention. Having been at the forefront of modern communication forms, the camera has attained for itself a certain unique position in the modern society, and its importance has amplified with the advent of globalization and the rise of the internet. Coupled with cheap communication avenues and fast-paced transmission across the globe, the camera has become a potent tool for change in modern times. This essay will attempt to document the evolution of the camera industry and also will analyze the forces, challenges, threats and disruptions that the market has faced since its inception.

Following questions are answered in this case study solution

  1. Introduction

  2. Evolution of Camera Industry

  3. How the Changes in Markets forced a change in Strategy?

  4. Illustrate how Strengths, Weaknesses, Opportunities, and Threats affected operations and forced changes.

  5. Discuss how technology forced changes in strategy and how leadership affected changes in the industry to address these changes.

  6. Conclusion

Case Analysis for Leica Camera A Boutique Firm Faces A World Of Change Case Solution

The case study will look at logarithmic factors that make up the calculus of a fast-evolving industry that is highly affected by the winds of change instigated by technological advancements. The case study will also develop a comprehensive discourse on the impact of leadership in this industry and use potent examples to construct an exposition on the impact such forces have had on the firms that compete in the camera industry. Undoubtedly, the camera acts as an agent of change in modern times; the question is – what changes the camera industry.

2. Evolution of Camera Industry

The camera was invented after the discovery of an optical phenomenon called camera obscura. In this case, an inverted image is formed on a screen after light travels through a narrow slit or a hole.

The first camera that actually produced a recognizable image was invented in 1816 by Niepce. It was an early model that barely registered a light image that darkened eventually with exposure to light (Newhall, 1982). Improvements were made on this version and images were begun to be developed using mercury vapor. It was Talbot who ultimately introduced a different process by using ground glass and capped lens. The lens was uncapped for as long a duration as was required under the prevailing lighting conditions (Wade, 1979).

To understand the evolution of camera, it is necessary to understand the importance of the various components that took to produce an actual image in the early days of the technology. It was through the invention of the gelatin dry plate in 1871 that the quality of images was drastically improved and allowed for better exposure adjustment. With this technology, various designs of the camera were introduced into the market. It was around this time that the shutter was introduced, initially as an accessory to the camera (Wade, 1979).

Kodak truly revolutionized the industry by introducing the photographic film. George Eastman introduced the usage of celluloid films and created cost-effective cameras that made a world of difference and allowed the proliferation of the camera in the markets. In the 1930s, Henri Cartier Bresson began using 35mm cameras to take instant candid shots. These images actually helped the development of an understanding of the war effort and galvanized support (Masoner, 2018).

In 1948, the classic Polaroid made its debut and became a hit. It was initially called a Land Camera, named after its inventor and it processed prints in under a minute (Love, 2012). It was until the 1980s that the cameras meant to be used as a portable device would become mainstream. This happened with Sony Mavica that was an analog camera in nature. The unique thing about this camera was that it recorded images continuously thus making it, in effect, a video camera. The signals were recorded on a video floppy (Toyoda, 2006).

Digital cameras began developing in the 1970s, but they were still quite obscure at that point in time. It was in 1991 that they were manufactured in the United States. Despite development, they were still quite expensive for the average consumer and thus remained limited to professional photographers. Eventually, when the pixel technology became cheaper, the camera prices went down (The People History, 2018).

3. How the Changes in Markets forced a change in Strategy?

The biggest challenge came from the change in the nature of demand. Whereas Leica was inclined towards producing cameras aimed primarily at collectors and professionals, the world was increasingly moving towards cheap, easy to maintain, no-frills type of cameras. This was a damaging situation, and Leica had little chance to foresee and prepare for such a drastic shift in consumer tastes.

Another crucial change in the market came in the supply chain section. It was noted that many firms in the industry were moving towards large distributor formats. Leica had not prepared for such an eventuality and needed to fix its miscalculations in this regard as well.

Leica attempted to salvage its reputation and its declining sales by attempting to emphasize the brand value. This was done in several ways; in-shop customer touch points were established. Furthermore, it began to produce collector items for some of its more valuable customers. Despite these value added services, the turnaround could not be achieved in ample time.

Another challenge to the company came in the form of powerful competitors that were catering to the market demand in a much better manner. One such competitor was Canon which was taking the maximum benefit from the rising popularity of the digital cameras. What Canon did really well was that it took charge of its product line by taking into account the changing consumer trends at an early stage. Therefore, by the time digital cameras reached peak popularity, not only was it offering new product launches, it had a comprehensive line of lenses to complement its SLR product line. Such was its profitability that it discontinued the production of film cameras in 2006. Furthermore, since the market was now dominated by average-joe consumers rather than rich patrons and professional photographers, it was employing an aggressive sales strategy to ensure that it achieved high volumes. This was particularly necessary given the fact that digital cameras often offered smaller margins. 

Added to this, other competitors such as Nikon and Hasselblad also appeared to be well-established to tackle the tide of changing consumer tastes, leaving Leica to suffer on its own. Nikon, in a bid to achieve higher profitability, developed a high-end line of DSLRs and also worked to minimize its cost levels. 

4. Illustrate how Strengths, Weaknesses, Opportunities, and Threats affected operations and forced changes.

i. Strengths

The strength of Leica lay in its mastery of the film camera and its brand image. Both of these were utilized well in order to salvage profits. Leica’s core strength was its R series which was a hot favorite among professional and hobby photographs who valued aesthetics and precision over everything else. The firm incurred considerable costs to keep this particular product line open, as it sold in smaller numbers. What made Leica such a strong brand was its strong commitment to quality. Not only was it a master in microscopy and hence in lens-making, but it was also great at manufacturing and quality control. Manufacturing of Leica's lenses required the highest form of craftsmanship, and each lens passed through the hands of a quality tester who manually checked it. Such was the power of the brand that any lens that Leica produced was deemed a collectors' item.

ii. Weaknesses

Leica's main weakness was its digital camera division. Not only did it lag behind in the relevant technology, but this brand was also so focused on the traditional camera segment that it failed to alter its brand or update its technological capabilities to keep up with the market. Leica was not prepared for high development costs and the fast succession of generations of cameras.

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