Sunday 22 January 2012

Could Kodak's demise have been averted?

A fascinating article in today's Observer by John Naughton explores the possible causes of Kodak's difficulties, revealing that the company invented digital photography, the medium that supplanted film, in 1975. The article explores the issue in depth and includes several useful links.

However, for me the money-quote is in the final paragraph where Naughton quotes an extract from a lecture by Rebecca Henderson of MIT in which she imagined what a Kodak executive might have said to the developer of the first digital camera:
"I see. You're suggesting that we invest millions of dollars in a market that may or may not exist but that is certainly smaller than our existing market, to develop a product that customers may or may not want, using a business model that will almost certainly give us lower margins than our existing product lines. You're warning us that we'll run into serious organisational problems as we make this investment, and our current business is screaming for resources. Tell me again just why we should make this investment?"
Why indeed?


Anonymous said...

This was in the Economist the week before!

Brian Moore (NamNews) said...

Many thanks, have now added Schumpeter ( to my reading list
Brian Moore