Description:
This field-based case uses Leica Camera, the famed German manufacturer of high-end cameras, to unfold circumstances that allow for an analysis of the firm's competitive position. Having moved the well-loved German company from near bankruptcy during the digital revolution to a digital disrupter, Andreas Kaufmann, chairman and principal owner, had amassed an unblemished record in strategic decisions that turned the company around. The case open allows students to explore the uncertainty over the future direction under the guidance of a new CEO. Did Leica want to remain a business-to-consumer (B2C) company and a consumer brand in the premium luxury segment? Or did it want to be a B2B supplier for optical and auto-electronic components?The case provides an overview of the competitive style of the major manufacturers, and allows a discussion of core capabilities of these competitors. This offers an opportunity to explore if Leica had the right portfolio of products. Should it focus on a few, well-chosen products where it could win, or should Leica cover the full spectrum of camera products? How would the new CEO get a company that had built all this for over 100 years to leverage opportunities opening up?ExcerptUVA-S-0312Rev. Nov. 11, 2019Leica Camera: The Zeitgeist of PhotographyAndreas Kaufmann, Leica Camera AG (Leica) chairman and principal owner, had just hired a new CEO, Matthias Harsch, in the fall of 2017. Having moved the well-loved German company from near bankruptcy during the digital revolution to a digital disrupter, Kaufmann had amassed an unblemished record in strategic decisions that turned the company around.Leica was a small-scale camera producer among big-scale manufacturers such as Sony, Nikon, and Canon. Kaufmann's restructuring plan focused first on recapitalizing the company. The once publicly offered company returned to being privately held (and family-owned) in 2012. While Leica had been mostly a B2B company, that changed with a new retail strategy and repositioning of the Leica brand when Leica stores and galleries rolled out internationally. Kaufmann also reorganized the product portfolio, including his difficult decision to end a beloved camera line and creating instead several niche products (such as a monochrome camera). In 2014, he returned the Leica factory and corporate headquarters to Wetzlar, Germany, where it had originated, to a new visually interesting complex called Leitz Park. And in 2016, through a partnership with cell phone giant Huawei, Leica introduced its first lens in a smartphone device (see Exhibit 1).As an ambassador for the Leica brand, Kaufmann was special and found the work interesting. He was a gifted public speaker and was passionate about photography, people, and the company. He helped spread confidence among employees and executives alike. His intensely personalized and self-effacing approach was in sharp contrast to the celebrity style of many investors and iconic company owners. None of these characteristics, however, got in the way of making difficult decisions and searching for the right management talent to lead Leica. Since Kaufmann's purchase of 27.4% of Leica in 2004 and the majority of shares in 2006, Leica had had five CEOs. Harsch was the sixth, and Kaufmann had expectations around top management that were uncompromising—management was about people