Kodak, an iconic name in business filed bankruptcy recently. While their financial picture deteriorated over the past several years, the key reason for Kodak’s failure was a decision made in 1975.
For the first 100 years of the company, Kodak led the manufacture of cameras, film, and film processing with sales peaking at $10 billion in 1981. Unfortunately, digital cameras grabbed the market and the traditional film market is long gone.
Kodak invented the first digital camera, in 1975. Had they embraced the new technology, they would have been the long-term winners rather than losers. At the time, Kodak believed that if they marketed the digital technology, the marketplace change would be so profound that the company would lose its traditional film business within a few years.
True, digital technology would have transformed Kodak and would have required radical reorganization. While this would have been difficult and painful, it would have saved Kodak.
Instead, the traditional business model doomed Kodak to failure.
We may experience something similar on a smaller level. If we stay with status quo, fail to adapt, or hesitate to embrace new ideas and technology, others will leave us behind. Instead of remaining a leader, Kodak lost the entire company.
Others have fallen into the same trap. Swiss watch makers controlled 95% of the watch market in the early 1970’s. The inventor of the quartz watch went to the Swiss to pitch the idea.
Unfortunately, the Swiss company rejected it. The Swiss reasoned that if they adopted the new quartz technology, they would need to change everything about watch making, a move they didn’t want to take. When the Asian manufacturers picked up the opportunity, it cost the Swiss most of the market.
King Solomon wrote, Solomon said, “I went past the field of the sluggard, past the vineyard of the man who lacks judgment . . . and learned a lesson from what I saw.” (Proverbs 24:30, 32b) Sometimes you have to move past the safe or easy way to embrace strategic decisions that will give you viability in the long run.
Consider this example from Main Street. A baker created excellent baked goods and sold them through his storefront location. Several gas station stores offered to sell his goods, but he would have to sell them at a lower price. I advised him to take the offer. Unfortunately, he refused because he believed the discounted sales would reduce his retail profit. The gas stations located another source. The baker not only lost retail sales; he failed to gain in volume discounted sales.
Here’s the principle: If we fail to embrace change in our business, someone else will.
Steve Marr, Your Christian Business Coach
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