Once one of the most-recognized brand names in any product category, Kodak held an enviable 89% photographic film market share in 1976, its 88th year. One of the reasons they flourished was how well they practiced what the business world was taught by the inventor of the safety razor, K. C. Gillette (who many believe copied the idea himself from his competitors): "give 'em a razor, sell 'em the blades." Kodak created a wide variety of still and movie cameras which consumed more and more film as their popularity caught on, and then there were those developing and processing charges too. But, Eastman-Kodak didn't keep their eye on where their marketplace was going.
Their first problem was Fuji, the Japanese film company, which had almost a monoply in its homeland since its 1934 launch. Kodak didn't go after the coveted "Official Film" title of the 1984 Olympics in Los Angeles because they didn't believe that a foreign brand could succeed in the U.S, and by 1995, Fuji had carved out a 17% American market share. Kodak compounded their problem by investing heavily in penetration of the Japanese market, only to not only fail, but to have their complaint to the World Trade Organization about Fuji's unfair business practices in Japan be rejected. They didn't see the seriousness of a 5% drop in revenue in one year.
Their second problem was digital technology. Both late and slow to respond to the development of digital cameras which required no film, they pulled off a successful rebound by building cameras for Apple and creating their Easy Share camera line (which allowed simple transfer of images to PCs). By 2005, they were selling more digital cameras than any other brand, but at a heavy price: they were losing up to $60-per-unit without "film" to make up that difference. Kodak last reported profits in 2007. A paradigm shift to outsourced manufacturing and cheap printer inks created new cash flow for Kodak, but not enough to keep it from a bankruptcy filing in early 2012. It has gone virtually unnoticed in the media that Kodak emerged from that bankruptcy earlier this month, as reported by the New York Times.
Instead, they've focused on the continuing slide of Blackberry, a popular name in the corporate and government worlds. Their success was so great that, after the term "Crackberry" was given to their product (a reference to the addictive nature of cocaine), Webster's New World College Dictionary selected that as their "New Word of the Year" in 2006. They finally realized the need to move from being a client on other manufacturers' phones to producing their own all-inclusive system with its own operating system. Users were deserting Blackberry in droves for the IPhone and Android: their market share went from 47% in 2009 to 2% this year, and their record $55-bil revenue in 2008 is down to less than 10% of that now. A number of industry analysts say the new Blackberry Smart Phones are good, but too little too late.
So, what's Blackberry to do? Kodak and Research in Motion (RIM) have both done some downsizing, but while Kodak turned primarily to outsourcing as it shifted its product mix, RIM plans to play their cards close to their corporate chests. Recent days have seen the announcement of their intent to take the company private, giving them an opportunity to try to sneak back up on the two big competing technologies without having their efforts and finances in public view. And they've got a big supporter: President Obama is on record as saying "they'll have to pry his Blackberry out of his hand."
The common issue with both companies is that "little-and-late" phenomenon, the cause of the demise of many small businesses. Hundreds and hundreds of auto parts manufacturers failed because they did not want to believe that their Detroit market would ever contract. The lesson here is if you're not constantly asking yourself the question, "What if...?", you're not doing the most important thing a small business owner/CEO needs to to: keeping your attention focused on the future and the course you set for your company. It's easy to get bogged down in budgets, financial analysis, day-to-day operations, and the like. You earn your keep by constantly scanning the horizon, not looking around your office or plant. Consider this exercise: what would the loss of your single largest customer mean to your company? By thinking through how you would deal with that now...before it happens...you'll be better able to rebound when it does...or when a marketplace change forces a similar downturn on you. Discuss your options and plans with trusted employees or advisers; document them; revisit them. But, more importantly, start thinking about what you can do now to improve your position in an evolving market. What can you do before a Fujifilm or IPhone race past you? Make that answer a Fourth Quarter goal.