I love business, so this article relates to current business affairs and lessons we can learn from the sad news of Kodak’s bankruptcy. I truly believe everyone should think about good business in general, so I hope this may be surprisingly interesting to many of you who do not usually real business related posts.Dee Kumar
Eastman Kodak Company Bankruptcy – 3 important reminders to prolong the life of your business
As an amateur photographer myself, it was sad to hear the news that the well loved ‘Kodak” had filled for bankruptcy protection.
It was not a surprise, as most business analysts had been predicting Kodak’s issues for over a year. Yet unfortunately, they were unable to turn things around and it looks even less likely that they will recover now they have filed bankruptcy.
Entrepreneurs and business persons alike should take heed of the example of Kodak and make changes to ensure we do not suffer the same fate.
In this article I will highlight the three main lessons we should remember with regards to Kodak’s demise. Before we go there however, here is a very brief trip down memory lane to highlight why Kodak is loved so dearly – especially for younger readers who may not know the brand well.
Who was Kodak?
Kodak is largely known for it photographic products, which they began producing in 1889. By 1970′s they had 90% of the USA camera market.
They were that dominant, everyone else was simply non existent. They produced affordable cameras that helped many people begin a career/hobby with photography, a pastime which is even enjoyed to this day.
However, even for such an old company, Kodak was not without its modern merits. They invented the very first megapixel camera and were the technology behind Apple’s first cameras too (although not many knew this as they bared the Apple name).
Business lessons from Kodak Bankruptcy
In 1999 they produced, what is largely regarded as the VERY FIRST DIGITAL CAMERA, the Kodak DC 290. It was a glimpse into the future from a company that pioneered the way cameras and computers would interact.
Some may say they were revolutionary and influenced much of what we take for granted today. So how did a company at the forefront of technology fall so far behind?
Here are three important lessons we can learn from Eastman Kodak company bankruptcy, which we can use to prolong the lives of our businesses.
Eastman Kodak company Bankruptcy Lesson 1: Being first does not mean squat
Eastman Kodak were the first to many technologies and one the most dominant brand in photography but it was perhaps arrogance that led to their downfall.
Kodak stopped pushing itself aggressively in the 1980′s, firmly believing that the American public would not leave their brand. Boy, how wrong they were.
They allowed a relatively unknown Fujifilm to enter the market. They allowed Fujifilm to become the main sponsor of the 1984 Los Angeles Olympics because they passed up the offer, a move which cemented Fujifilm’s long-term future in Northern America.
They knew the potential threat of letting a competitor have such a dominant position, however their history of successes blinded them and they clearly thought that people would never leave their brand. How wrong they were.
Then came along two very key innovations.The first megapixel camera and of course the first camera to interact with a computer ( DC 290). There is no argument that they were first with these innovations, however they still failed to make inroads because of one simple issue.
Being first does not mean squat – you still have to envisage where the market is going, create ways to leverage your products in line with these changes and encourage people to use your product.
The DC290 was created with Estate Agents in mind. They created them so that estate agents could label their picture with ’bathroom’, ‘kitchen’ and so on so customers could see things clearly! They failed to imagine how this same technology could be used to the advantage of every camera user.
They failed to envisage how this one idea could be expanded/moulded so that everyone could make use of it – so that everyone would want one. Being first does not mean squat unless you have a plan or strategy as to where you take the technology next.
Simply creating something wonderful will get you a round of applause, but that does not mean financial success. This error meant that others jumped on their missed opportunity, leaving Kodak to be left behind in a market segment which they created.
Key Lesson: Always have a plan as to how your business will attract customers. Being first simply means you attract competitors. Always try to envisage how you product could be useful to everyone and ensure you have plans to expand those uses for the betterment of your company. Kodak’s culture of arrogance gave then the feeling they were too big to have to worry about these things.
Eastman Kodak company Bankruptcy Lesson 2: Strive to lead or be left behind
I briefly mentioned this in lesson 1, but let me expand. I have a firm belief that business is either growing or dying, it can never stay in the same place.
Competitors and changing environments mean that your market share is always at risk of shrinking, so if you are not constantly working on growing you will soon see your market share eroded. Kodak forgot this principle completely.
They did what many big businesses do, they believed they had finally made it. Unfortunately nobody makes it for long anymore, especially when new information is so easily available (a non-existent competitor today, could be the main talking point tomorrow).
You should constantly be prepared for this and ensure that your company has new and exciting directions to explore which will increase your market share and of course your revenues. The moment you think you have ‘made it’ and stop doing the things that got you there…. then naturally things will start to unwind.
Good business and good strategic thinking got you to the top – so why o why would you stop doing all the good stuff that has been proven to work for you?
There is no real answer to this, as ego and a sense of satisfaction are just so easy to fester within our minds. It is something we will all face one day when we finally ‘make it’, yet we must remember the lesson of Kodak and others before us: the moment your ego outweighs your strategic business decisions is the moment your company begins to slide down a very dark slippery slope.
Key Lesson: Always strive to continue leading the market, never believe that you have made it. Apple is a great example of this belief, a belief that seems to have defined our generation. Decide if you want to be ‘Apple’ or ‘Kodak’ – it is that simple.
Eastman Kodak company Bankruptcy Lesson 3: Being loved is never enough
Kodak has much love and respect especially within the photographic community. Of course they have printers and other peripherals too, but photography was its core and where many people fell in love with the brand.
They were affordable yet offered us so much and for that reason the news of their bankruptcy has sparked a feeling of sorrow for a company that was so dominant when I was younger.
Yet, that love and respect for a company does not mean revenue, Kodak is pure proof of that. Besides the possible arrogant culture with Kodak, there is really not much negative from a customer viewpoint. Their products were of good quality and they did what we wanted.
This in itself is a big feat, but not one that can carry a company forward alone. Kodak was respected and still adored. Yet, they failed to engage us and convince us they were still relevant. They had their fans boys and girls, but were they really buying anything? The answer seems to be a very obvious no.
You see – being loved is never enough. You still need to work at ensuring that love converts to buying and thus revenues and profit – the blood supply of your business.
Key Learning: Being loved may be nice, but if you takes your eyes off the true meaning of business (selling products and generating revenue) then all the love in the world may not help your business survive.
I’m sure there are many other business lessons that we can learn from the Eastman Kodak company bankruptcy, however I tried to highlight the three core messages that will appeal to all businesses, especially those types that read my blog.
We should use the Kodak reminder to ensure we always strive to continuous improve our businesses, to ensure we focus on the true metric of our business (revenue) and not simply creating a well liked brand.
Too many businesses chase publicity and mass goodwill, but unless we have a detailed strategy as to how that will lead to sales, then there really is no business in it. Business is about making money. Even when doing good things, never ever forgot that.
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