Issue of the week: The Kodak moment passes

Let’s take a moment to mourn the once-great Kodak, said Jim Jelter in MarketWatch.com. The company George Eastman founded in 1888 filed for bankruptcy last week, and it feels “much more like a loss than merely another business going broke.” It’s hard not to feel nostalgic for a company that defined the photo industry for more than a century and held such “a unique place in our lives.” Millions of us chronicled births, graduations, and weddings on Kodak cameras with Kodak film and prints on Kodak paper. It is very sad that this company, like so many others, “fell in love with its own legacy and ultimately lost its grip on the market.”

Kodak’s demise was more complicated than many think, said Sam Gustin in Time.com. The idea that the company was simply complacent doesn’t jibe with the fact that it invented the first digital camera, in 1975, and long “anticipated that digital photography would overtake film.” But its executives remained too focused on past glories, said Ernest Scheyder in Reuters.com. They “feared cannibalizing their core film sales” if they moved decisively away from their traditional business model of selling cheap cameras but lots of expensive film. By the time they seriously entered the digital market, it was already crowded with competitors.

It’s striking that the “Google of its day” is now in Chapter 11, said The Economist, while its longtime rival, Japan’s Fujifilm, has thrived. Both companies once enjoyed “near-monopolies” in their home markets, and both “saw omens of digital doom.” But while Kodak hunkered down, Fujifilm upended its business to embrace digital photography. Kodak kept insisting on perfect products, a strategy poorly tailored to the launch-it-first, fix-it-later tech world. The American firm was right to try to tap the business potential of the chemical portfolio its researchers had created for film. But its pharmaceutical venture fizzled, while Fujifilm used its chemical expertise to build a successful electronics division and even a cosmetics line.

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There’s a lesson here for every American corporate chieftain, said The Boston Globe in an editorial. “First place is the most dangerous” place, particularly if a company lacks the imagination for reinvention. Kodak fell victim to a technology it pioneered because “its profits from film were so vast it saw little need to stay ahead of the curve.” That’s proof once again that at the dizzying pace of change in today’s marketplace, “even the most technologically innovative companies need to have farsighted management.”