Business Failure Free Essay

In the 21 century, the need to keep abreast of the new developments as a strategy for business success cannot be overstated. In the information age, the successful companies are those that are quick to identify the relevant information and use it to adapt to the disruptive forces or gain competitive advantage. Many American business entities have failed because they could not appreciate the value of the information they had or could not use it to their advantage. This paper explores the case of Kodak, it used to be one of the world’s most popular brands. We will interrogate how the company mismanaged the information it had, detailing how a better use of the information might have prevented the failure of the business. Through an extensive documentary review, this paper details the instances where useful and valuable information was mismanaged or otherwise misused and how these instances contributed towards the decline of one of the world’s most profitable and powerful enterprises. Lastly, we shall provide a few recommendations based on the lessons learned from the case under consideration.

Overview

The case of Kodak is one of the saddest stories of potential loss. The rate at which one of the American super brands was phased out is alarming to all business entities throughout the globe. In its heyday, Eastman Kodak was synonymous with taking pictures. The consumers virtually had no other option since Kodak had, practically, the monopoly of the camera film market. In 1996, at the height of its power, Kodak was one of the largest employers with 140,000 employees and also the fourth most valuable and recognizable American brand after Disney, Coca-Cola, and McDonald’s (Heckman, 2015). However, less than 16 years later, the company was filing for bankruptcy. By 2013, the company had the market capitalization of less than $1 billion (Goshidigian, 2014). To date, there are a few corporate blunders rooted on missed opportunities as staggering as Kodak’s, both in the past and present. The inability to evolve with the market and to embrace the disruption forces are some of the reasons that have been advanced to explain the failure (Mui, 2012).

Findings and Discussion

One of the core reasons why Kodak failed is its blatant disregard for useful information. The management of the company was so blinded by its success that they could not identify useful information when they had it (Anthony, 2016). As such, the company was completely blindsided by the rise of the digital technology. It is not that Kodak did not know that the future of photography is digital photography. In fact, Kodak was the first to invent the digital camera way back in 1975 (Anthony, 2016). S. Sasson, an engineer, credited with inventing the digital camera, was working for Kodak at the time. He then approached the management with this information on how digital photography will revolutionize the market, but the top management ignored the idea and, instead, shelved it. In an interview with the New York Times, Sasson explains that the executive management’s assessment of his finding indicated that it was attractive, but that he should not tell anyone about it (Shih, 2016). The management, blinded by the unrivaled market share and the profitability it enjoyed, disregarded the almost prophetic information on the market trend simply because they were not ready to change, and did not want others to change either.

Kodak also failed to make use of the research information it generated from its market research. Six years after inventing the digital camera, V. Barabba, the head of market intelligence at Kodak, researched at length the core technologies and possible adoption curves in the area, especially with regard to the expected tussle between halide film and digital photography. Around that time, Sony had introduced the first electronic camera, pointing towards the adoption of digital photography. The results of the study affirmed that digital photography had the potential capability to seize Kodak’s established business model that was film-based (Griffin, 2016). The reprieve, though, was that the digital revolution should not be expected to happen within the next decade. Kodak had roughly ten years to adapt its core competencies and prepare for the transition. However, with all that information in hand, Kodak did not. Even though companies such as Sony had shifted focus to digital photography and all the signs pointed towards the decline of the traditional form, Kodak still insisted on basing its model on the halide film (Randall, 2011). By the time it became clear that the firm’s profits were quickly dwindling, it was too late. Despite the market trend information predicting a gloomy future for Kodak if it does not conform, Kodak remained reluctant and unwilling to shift with the market, and this led it to mismanage its investment (Randall, 2011). It invested in the digital cameras but overshot the market trying to replicate the success of the traditional film and was on a downward trend ever since.

However, the most glaring mismanagement of information relates to the disruption caused by websites and mobile phones. On these, too, Kodak had the information but chose to disregard its value. Way before M. Zuckerberg coded Facebook, Kodak had conducted a market study and identified that there will be a massive photo sharing online (Shih, 2016). As such, Kodak acquired Ofoto, a photo-sharing site, in 2001 (Anthony, 2016). However, that is as far as they went in using the information they had unearthed. Instead of pioneering the unchartered yet promising area of digital photo-sharing, Kodak appropriated Ofoto for printing digital images: a gross misuse of the site and blatant disregard of the market trends (Randall, 2011). In 2012, as Kodak was selling Ofoto to Shutterfly as part of the bankruptcy arrangement, Facebook was acquiring Instagram, only invented 18 months earlier, but one which had appreciated the trends in digital photo-sharing to its benefit.

In light of the lessons learned from the tragic decline of one of the world’s most powerful companies, this paper recommends that businesses should put mechanisms in place to identify innovation and market trends information that could be vital in transitioning in the market. All businesses should have market intelligence units that monitor the market and make useful recommendations to the top management (Griffin, 2016). Secondly, firms should use market information to measure success objectively. Profitability does not paint the whole picture, the trends in market share, on the other hand, indicate quite objectively how the company is performing (Griffin, 2016). Lastly, all companies should establish the culture of information sharing in the organization. This will offer incentives to innovators in the organization to share their ideas and other bits of useful information (Randall, 2011). Being stuck in the “we’ve always done it this way” trance as Kodak did is one of the surest ways of gravitating towards business failure.

Conclusion

The case of Kodak’s downfall is one of the most astounding business failures in the world. It is rooted on the gross mismanagement of information. The company had all the information that it needed to make prudent business decisions; however, it did not. When it made the decisions, they were not warranted by the information at hand. Kodak could have been the leader in manufacturing digital cameras as it is the company that invented it; however, its gross disregard for the market trend saw it relinquish that market to Sony. Next came the advent of digital photo-sharing. Just like it had led by inventing the digital camera, Kodak had identified and acquired the digital photo-sharing site, Ofoto. Yet again, nothing much was done with the priceless information. In the end, the failure to utilize these bits of valuable information contribute to its missed opportunities and being phased out of the market by its competitors.


Go to our Order Page if you want to buy essay help on this or any other topic.
Live Chat
Online