Even if your business is currently thriving, it is important to regularly evaluate your existing business model. In this article we use the well-known Kodak-moment example to show why it is important to take the risk of introducing a new business model when your current way of operating seems to work well.
The Kodak-moment is often discussed in innovation processes to describe the situation where a business fails to recognize changing market dynamics in time and consequently loses its leading position. Cause of the
A well-known example from history illustrates the story of a company that once pioneered digital technology. In 1975, an engineer from this company developed the very first digital camera. However, the management was reluctant to embrace this invention, fearing it would undermine their then-successful product, traditional film rolls. They continued to focus on selling affordable cameras that relied on these costly film rolls. Meanwhile, competitors were increasingly diving into digital photography, while this company clung to its old strategy.
Digital photography took a significant leap forward, and this once-dominant market leader fell behind. When the company finally decided to embrace the digital trend, their competitors were already far ahead. This led to severe financial difficulties and an eventual near-bankruptcy. After a major restructuring in 2013, the company managed to make a comeback and survive the crisis.
Although the term the Kodak-moment in innovation is often mentioned, Kodak is not the only company that has had difficulties in the past due to stagnation due to an outdated business model. Here are some other Kodak-moment examples.
Nokia was once the world leader in mobile phones. In the early 2000s, Nokia dominated the market with a market share of more than 40%.
Problem: Nokia underestimated the speed at which the smartphone market was developing and missed the transition to touchscreens and innovative operating systems like iOS and Android. While Apple and Samsung were making significant strides in the smartphone industry, Nokia remained focused on their outdated Symbian operating system and traditional mobile phones.
Nokia quickly lost market share and, in 2014, had to sell its mobile division to Microsoft. Since then, the company has attempted to restructure and now focuses more on network equipment and telecommunications services.
Toys “R” Us was once the world’s largest toy store chain and a favorite among children and parents. They had large stores with a wide range of toys and games.
Problem: The company overlooked the shift to e-commerce and online shopping and lost competitive strength against online giants like Amazon and Walmart. Additionally, they faced a heavy debt burden that hindered innovation and expansion.
Toys “R” Us filed for bankruptcy in 2017 and closed most of its stores in 2018. Although there have been attempts to revive the brand, it has never had the same impact as before
Let this story serve as a warning. Regularly evaluate your business model and take action to future-proof your company. Business Model Hacking can help you to create a futureproof business model portfolio. Our method helps you to discover new businessmodels and helps your company to adapt and strengthen the business strategy in a dynamic market. It is essential to avoid complacency and continue innovating to stay successful.
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