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Polaroid's Unsustainable Pricing and its Fatal Consequences

Posted by PriceBeam on March 31, 2017

Remember Polaroid cameras? Best known for their instant cameras, Polaroid was actually one of the first companies to develop the technology behind digital imaging, a technology which is now a crucial part of all modern cameras. Yet, Polaroid saw its revenue peak in 1991, and in 2001 the company was declared bankrupt. Polaroid failed to take the digital imaging technology to the market due to one main reason: unsustainable pricing.

Throughout its history, Polaroid's price setting was suboptimal. The company brought state-of-the-art technology to the consumers, but exhibited insufficient confidence in their own products, and consequently, didn't charge very high prices. Margins were razor-thin, and so, once the company developed this revolutionary digital imaging technology, they didn't launch it. Revolutionary technology is expensive to produce, and with their poor pricing abilities, Polaroid did not see a market for this technology. They deemed they would be unable to make money from it, and failed to seize the opportunity for a first-mover advantage right in front of them.

Kodak thought otherwise, and today, they are credited with the launch of the first digital camera.

Written by PriceBeam

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