Question
Modern businesses can learn several lessons from Kodak's failure to adapt to the digital camera technology they invented. Firstly, it's crucial to embrace and adapt to technological advancements, even if they disrupt the current business model. Ignoring or resisting change can lead to loss of market share and eventually, irrelevance. Secondly, businesses should not overly rely on temporary sources of profit, like Kodak did with its patents. Once these sources dry up, the business might find itself in a precarious situation. Lastly, the concept of 'existential flexibility' is important. Businesses should be willing to make fundamental changes to their strategies if required, even if it means short-term losses or discomfort.
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George Eastman built a company that pioneered personal photography and dominated the industry for decades. In 1975, their R&D department invented the digital camera. However, fearing disruption of their existing market dominance, they shelved it for decades, until their competitors began to develop digital cameras. Since Kodak owned many of the digital camera-related patents, their bottom lines still showed huge profits even as they fast lost market share. But when the patents expired in 2007, Kodak was soon forced to file bankruptcy protection. The leadership's inability for existential flexibility allowed Kodak to be disrupted by the very technology they invented.
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