Technological change - Kodak’s big strategic mistake
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I highly recommend that A2 business students read Tom White’s excellent blog about the demise of Kodak. I came across a couple of useful video clips which help explain the strategic mistakes made by Kodak and also suggest that the corporate culture at Kodak was a significant part in the failure of the business to adapt and change.
You may have read recently that Kodak filed for bankruptcy protection, obtaining protection from its creditors for a short-while whilst it attempts to restructure the business. The problem for Kodak,as this video explains, is that the firm has $7 billion of liabilities (amounts owed by the firm) compared with just $5 billion of assets.
Kodak has been struggling for a long time after failing to get to grips with the significant change created by the switch to digital imagery.
Kodak has lots of patents for digital technology, but are these worth much? The problems with patents is that they expire!
Kodak was one of the first to look at digital technology, but missed the opportunity and has now paid a high price. A great example of a business outflanked by technological change.
This second video has some interesting insights about the corporate culture at Kodak. Did management at Kodak really believe that they believed they had the “divine right” to provide film?
Why was the business so slow and reluctant to embrace digital technology?
The video highlights some other large corporate examples where the people at the top failed to spot changes in their markets. Senior management were out of touch; not close enough to the customer.
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