Note: This is a paper I wrote for the Strategy Implementation class in my Global MBA.

Edwin Land was a prototypical inventor whose 535 patents are only outnumbered by Thomas Edison’s 1093. Land’s expertise in chemistry led him to devote himself to research and development at Harvard University, although he never earned a degree. His knack for making technological innovation into compelling products and then selling them served as a source of inspiration for Steve Jobs. He founded Land-Wheelright Laboratories in 1932 with his partner George Wheelwright in order to commercialize Land’s invention of polarizing films. Their first products would be sunglasses and scientific instruments. The company was renamed to Polaroid in 1937, and continued to develop polarized films for use in products, including stereoscopic 3D glasses, LCDs and many military applications during Word War II.

Polaroid’s breakout success came in 1947 with the instant camera. The patents for the instant camera demonstrate that development on the product begin 4 years earlier. As with startups today, years of R&D and attempts were boiled down to a simple origin story in which Edwin Land’s daughter asked why the photos they were taking on a family vacation weren’t visible immediately. Whatever its origins, the instant camera put an entire photographic darkroom into the body of the camera itself. The cameras required a single card of film which was inserted into the camera and exposed directly. After exposure the chemistry in the film would develop the film quickly before being removed from the camera. Initially the film needed to have a plastic sheet removed after exposure, but in future models the film’s plastic would be peeled and the card ejected mechanically. After a few moments the chemistry would do its work and the image would be revealed.

The name Polaroid would become synonymous with instant cameras, despite strong competition from the likes of Kodak. Instantly available photography is rather pedestrian in today’s world of smart phones and ubiquitous high resolution screens, but in heyday of Polaroid, taking a picture of friends or family and then being able to show them the image within moments was a revelation. The immediacy of capturing a moment gained friends in the artistic and pop culture world and spread throughout society. Polaroid would ride the success of instant photography for 3 decades. In one 3 year span from 1976 to 1978, Polaroid and Kodak fought for control of the total instant camera market which would grow from 10.3 million cameras sold to 14.3 million. Polaroid attempted to leverage their instant camera experience into video and then digital, but ultimately sputtered, declining until declaring bankruptcy in September 2011. Today Polaroid’s brand and intellectual property has been bought and sold and is struggling to find a place in a world where photography is ubiquitous and in every pocket.

Instant Camera

The photography market in 1947 had progressed little since Eastman introduced film in 1888. Camera and film makers had grown on sustaining innovation. Cameras became smaller and more portable, color film was beginning to become common, but one thing had not changed, the darkroom. In order to develop film a photographer had to build their own darkroom and keep it stocked with chemicals and supplies or send their undeveloped film to laboratories and wait days or weeks for the results. When Land demonstrated the instant camera he would set a timer and fifty one seconds after pressing the shutter would peel away the film’s encasing plastic and demonstrate a portrait of his own face. This was a technological breakthrough and lent itself to a highly differentiated strategy in the photography market.

Like other disruptive products, the instant camera was better than the competition along a previously ignored axis. The instant camera didn’t satisfy the professional photographer’s need for negatives that could be reprinted, each image was a one off. Neither would it allow for enlarging prints. There were initial problems with fading images, but Polaroid worked quickly to address the issue. While not initially enough to satisfy the most demanding customers, professionals, the instant camera opened photography to a whole new market, every day consumers and enthusiasts. What the instant camera lacked in professional niceties, it made up for in delighting people who wanted to capture a moment and enjoy it later.

In 1947, the first Polaroid camera was priced at $89.95 ($953.80 in current pricing, adjusted for inflation) and the iconic SX-70 was priced at $180 ($1100 today) in 1972. Film packs in the 70s were sold at $6.90 ($42.18 today) for a 10 pack with a profit margin of around 60%. These were priced for enthusiasts, relatively high, but reachable for many families if the expense was planned. Similar to Apple today, Polaroid priced its products following a differentiation strategy as opposed to a cost strategy. While the market penetration was not as high as it could have been with a cost strategy, Polaroid succeed in creating an aspirational product with high margins and huge brand appeal. It was an event in family gatherings for a dad or uncle to pull out a Polaroid camera, take some shots and pass around the image.

The instant camera propelled Polaroid’s share price, against analyst expectations. The year after the Land Camera (the first instant camera was named after the inventor) was introduced, 1948, saw Polaroid collecting revenues of $1.48 million. Within a decade revenues reached $89 million, and by 1969 revenues were at half a billion dollars a year. Share price rose continuously, splitting in 1964 and 1968. In these two decades Polaroid iterated on their product, releasing smaller versions that suited family photos and higher end versions aimed at cracking the professional market. The biggest innovation for Polaroid was Polacolor, introduced in 1963. Now, Polaroid customers, could see their pictures in color. The professional photography community reacted to color with suspicion, as black and white seemed more serious, but consumers loved it.

In the 1960s Polaroid began to attract the attention of the artistic community. Polaroid would capitalize on the enthusiasm for instant photography from widely respected luminaries like Ansel Adams and counter culture creative figures like Andy Warhol. Artists began using the immediacy of Polaroid in new and sometimes shocking ways. Meanwhile the market was expanding.

Land’s Leadership & Polaroid’s Culture

Land imbued his company with a sense of purpose and mission that would seem right at home in the mythology-rich culture of Silicon Valley today. For example, after the launch of a collapsable instant camera, called the SX-70, in 1973 he wrote:

We would not have known and have only just learned—perhaps mostly from children from two to five—that a new kind of relationship between people in groups is brought into being by SX-70 when the members of a group are photographing and being photographed and sharing the photographs: it turns out that buried within us—God knows beneath how many pregenital and Freudian and Calvanistic strata—there is a latent interest in each other; there is tenderness, curiosity, excitement, affection, companionability and humor; it turns out, this cold world where man grows distant from man, and even lovers can reach each other only briefly, that we have a yen for and a primordial competence for a quiet good-humored delight in each other: we have a prehistoric tribal competence for a non-physical, non-emotional, non-sexual satisfaction in being partners in the lonely exploration of a once-empty planet.

Land encouraged a culture of innovation throughout the company. He spent a great deal of time in the labs himself and his example spurred on everyone to develop new technologies. He established the company’s headquarters in Cambridge where Land was able to recruit young scientists from local Ivy League schools, in much the same way that Stanford serves as a feeder for Silicon Valley today. His labs were staffed with a noticeably higher ratio of women than was typical in middle of the 20th century. He demonstrated by example the work ethic he expected, coming in early and staying late.

Land encouraged experimentation and extended research. Because of strong patents locking out competition for the first 3 decades at Polaroid, there was little commercial competition. The resulting high profits allowed for pet projects and R&D that would have seemed overly-indulgent in other organizations. One department was named “Miscellaneous Research” and was exemplary of the academic focus the company took to product development. Despite his gifts for marketing and business acumen, Land was a scientist at heart and Polaroid’s high profits gave him the largesse to make the company in that image. He demonstrated his values and the vision for the company in the things he focused on, research and product development.

The ideas that came out of these research projects did not always lend themselves to mass market success, but Polaroid was good at making use of them to strengthen the company’s brand. For example, large format polaroid film was impractical for most potential customers, however Ansel Adams, the iconic photographer of American landscapes, fell in love with them and used them prolifically. It would be hard to imagine a better case study for the quality and prestige of Polaroid products than Ansel Adams.


Polaroid did not have serious direct competitors in the instant camera market for 3 decades. However, in the wider photography US market, Eastman Kodak reigned supreme, with 80% marketshare. Polaroid felt confident enough in its niche status to contract with Kodak to supply the film portion of their film sheets. Polaroid had sunk tremendous capital into the development of their SX-70 camera and begin to speak with Kodak about extending their agreement to the film for the new camera. Kodak’s new CEO, Louis Eilers, didn’t like the idea of supplying a possible competitor and talks failed.

Now Polaroid had to invest heavily into producing their own film and Kodak began development of their own instant camera. When Kodak’s cameras came to market, Polaroid was dismayed to see what they considered blatant patent infringement and litigation quickly began. Land was on the warpath. The legal battle lasted from 1981 to 1990, in which time Kodak was found to have violated patents, was forced to pull its film from the shelves and eventually had to pay Polaroid a judgement of $909,457,567. But the victory was hollow. Polaroid had wanted $12 billion, Wall Street had expected $1.5 billion. Kodak paid the bill easily and the markets reacted to the end of litigation by rewarding Kodak and punishing Polaroid with a 20% fall in stock price.

Reflecting on the legal dispute between Polaroid and Kodak, it is hard to say it was a worthwhile effort. A few lessons seem clear:

  1. Polaroid should not have been complacent in the contracting its film production to a much larger potential competitor. The more Polaroid succeeds, the more their “friend” has reasons to try to circumvent agreements and enter into direct competition with them. The expertise and markets of the two firms were too close to assume that Kodak would stay disinterested in perpetuity.
  2. Polaroid had invested a lot of capital from their organic growth during three decades without direct competitors, and yet had not invested in the development of their own film. Today Apple likes to talk about how they control all the primary technologies they use in their products and are on the verge of a breakup with Intel over processor timelines, because they have built expertise in their ARM chip design in the last decade. Polaroid should have used their windfall to do the same with film well before 1968.
  3. Legal agreements between large organizations are binding until they are not. Polaroid felt they had been wronged by Kodak’s patent infringement and even received a judgement justifying their confidence, but it did little more than serve as a decade long distraction with far less payoff than they hoped. Legal agreements are necessary, but scenario planning how to respond when they’re not honored would have been a fruitful exercise for Polaroid.


Edwin Land retired in 1980, eager to pursue continued laboratory experiments without having to justify expenses to other executives. His successor, William McCune, began to tighten things up at Polaroid. At the same time the wider photography market began to change. Kodak reworked its film processing technology which led to the opening of one-hour photo stores, where you could have film developed in an hour. Now the choice was not send film to a lab and wait a week or use an instant camera and see the results right away. The new choice was to see the results of a photo session within an hour using a a wide range of cameras or components (typically at higher quality) or use an instant camera and see the results right away. For many people the instant camera choice became less compelling.

Polaroid’s strategy in the new environment was the introduction of lower cost cameras. Unfortunately this shift from a differentiation to cost strategy was ill timed. They had learned the lesson from their Kodak legal dispute too late and had brought most manufacturing in-house, building expensive factories in the United States and Scotland. From 1978 to 1982 Polaroid’s share of the U.S. photo market fell from 27.1% to 17.4%. The new factories became albatrosses around their neck. Polaroid began to suffer and it dragged on into the 1990s. These missteps were indicative of Polaroid’s new breed of reactionary leadership, where firefighting took the place of strategic thinking.

In 1987 Polaroid had begun anticipating, too soon as it would turn out, that digital cameras might be the next wave in photography. They began to work on digital cameras in their R&D department, but the technology wasn’t ready and many inside the company resisted any suggestion that the future would not involve recurring film sales. Due to the state of digital imaging at the time it likely would have been impossible to force a digital camera through at this time. However, in a hypothetical world a decade later, Polaroid would have been well placed to develop digital cameras if they were willing to invest in a digital camera team isolated from the politics and economic concerns in the company’s mainstream.


Edwin Land’s company was a fascinating innovation machine that would serve as an inspiration to entrepreneurs for over half a century. They are an instructive study in innovation, product development, culture, strategy, and disruption. They demonstrate how today’s innovators can rise and how they can fall.