The founder of Eastman Kodak is sometimes called a technical genius, but that is not entirely true. His undoubted virtue was his talent as a manager, who could see the future, believe in his product, and promote it. George Eastman did the main thing that all businessmen who think big strive for – he brought his product closer to the consumer, made it inexpensive and accessible, easy to use, and attractive. Nevertheless, despite the genius of the initial idea, the company failed in 2012 due to managerial mistakes.
Kodak’s failure is primarily due to a failure to identify new areas of business. Companies often see disruptive trends affecting their business and attract enough resources to participate in emerging markets (Bolo, 2017). Their failure tends to be an inability to embrace new business models truly. Kodak created the digital camera, invested in the technology, and even realized that photos would be available online. However, it failed to understand that sharing photos online was a new business, not just a way to expand the printing business.
Another management mistake was the high self-confidence of the management. Having taken a firm place in its niche, the organization stopped evaluating itself critically. Kodak was no longer coping with the digital revolution when Fuji started to do better with the old technology, the film business. Finally, Kodak’s lack of strategic creativity led to a misinterpretation of the same field and type of industry in which it operated, which was subsequently destroyed by the fundamental shift toward the digital era.
Strategic problems were solved by tough means, and because mistakes in the production process were costly and high profitability, Kodak avoided risky decisions and instead developed procedures and policies to maintain the status quo. In analyzing Kodak’s experience, several pieces of advice could be given to its management. Approaches to strategy, business models, and innovation management should be constantly reviewed. Moreover, one should be prepared to move from protecting the company’s competitive advantages to radical and revolutionary changes. Besides, it is important to adopt flexibility as an organizational development strategy.
Reference
Bolo, B. (2017). Kodak Black: Flying High to Success, Weird and Interesting Facts on Dieuson Octave! CreateSpace Independent Publishing Platform.