Kodak’s fall from grace is an interesting case study that modern day companies can learn from. Even though the world’s first digital camera was invented by one of its engineers, the company was unwilling to cannibalize its film business that, at the time, was making money hand over fist. By the time digital cameras started catching on, Kodak had missed the boat.
On the contrary, Apple is a company that finds itself in a similar position of strength, but one that appears to be keen on not making the same mistake as Kodak. Even while its iPods were selling like hotcakes, the company was willing to cannibalize its sales by releasing the iPhone.
Apple then went on to launch the iPad, which has cannibalized Mac sales but has transformed the landscape of the industry.
Back on the camera industry side of things, Sony has also been causing quite a stir as of late in the photo world by releasing innovative technologies (e.g. pellicle mirror) and jumping into new markets early (e.g. mirrorless). Canon and Nikon, on the other hand, have been playing relatively safe. For example, even though Nikon jumped into the mirrorless camera game, the small sensors in the V1 and J1 indicate that the company isn’t willing to let its mirrorless cameras lure potential DSLR customers.
This has allowed Sony to eat into Canon and Nikon’s camera sale market shares. As a result, Sony’s CEO Howard Stringer was recently named “Person of the Year” by the PhotoImaging Manufacturers and Distributors Association.
Learning from these examples, it appears that the recipe for long-term success is to aggressively scout out new technologies, accurately gauge what consumers desire, and be willing to cannibalize yourself in meeting that demand. Failing to do so may put you at risk for “pulling a Kodak moment.”
Update: Here’s a terrific quote by Steve Jobs found in Walter Isaacson’s recent biography: “If you don’t cannibalize yourself, someone else will.”