Foundations of Business


Kodak UK sells digital cameras to UK customers through its website, as well as through traditional retail channels.

Recently, an incorrect price was displayed on the website, amounting to an unintended price reduction of hundreds of pounds for the camera in question. Someone posted a message on a newsgroup drawing attention to the error. This was on Friday. By the Monday morning, tens of thousands of customers had ordered the camera at the reduced price.

After some weeks of hesitation, Kodak announced that it would honour the orders, and ship the cameras at the agreed price.


Decision-Making -- Why do you think it was difficult for Kodak to decide what to do? What options might have been available to them? How can different types of consequence be compared (e.g. financial cost versus loss of reputation)? What do you suppose was the basis for the decision they eventually took?

Error-Tracking -- The incorrect price might have been the result of a clerical or technical error, or the price file might have been deliberately altered by a hacker. Do you think this would (or should) make any difference to Kodak's behaviour towards its customers? How could Kodak determine the root cause of the error, and how might it prevent such errors from recurring?

System Design -- What mechanisms could Kodak introduce, to be able to respond more quickly to such situations in future?

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This page last updated on March 28th, 2003
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