On January 19, 2012, Eastman Kodak Co. filed for bankruptcy. Kodak invented the portable camera. I recall how Kodak used to dominate the film and camera market. Kodak was everywhere around the world. Bankruptcy was unthinkable then as they were so dominant. There are many reasons for how this 131-year old company may cease to exist but lack of product innovation is not one of them as they invented the digital camera and have a library of 11,000 patents. Here is an excellent article with historical net sales charts of Kodak. Here are the pictures of Kodak in history.
I see two major reasons among many for Kodak’s demise:
1. Kodak has forgotten their Ideals, the essential reason for being, and what unique benefits they bring to the customers. Remember the Kodak moments? Kodak was in a story telling business and about sharing the special moments but they seem to have lost their way by defining the business as a film/camera business; they were busy protecting the cash cow rather than evolving to the future. Their failure was not because they were not innovative. They were inventing and spending on R&D. They just did not respond to the changes in customer expectations as digital technology changed customer experiences.
2. Marketing Failure: Kodak failed to recognize the threat, trends, as well as failure to commercialize and market the very invention they created in digital camera. And they failed to compete effectively as their points-of-differences eroded yet priced higher than Fuji. Here is an article from 1997 about Kodak losing shares to Fuji but that Kodak still had a dominant position. The signs of trouble have been there for a long time as evidenced by this 1997 Fortune Magazine article. Here is the recent article on where two competitors are in the Economist.
How are you defining your business? Do you know your essence and how will it translate to the new evolving world? Are you focused on protecting the cash cow or reassessing your unique selling position and creating new growth areas? If you do not ask the right questions, you will not be able to redefine the business and be prepared for the future.