As we all know, the digital photography revolution impacted the traditional film market. which in 2000, accounted for 60 percent of Fujifilm profits.. The film market went to basically nothing, but Fujifilm found new revenue sources and thrived. Kodak was the global leader in the traditional film market but did not survive the technology disruption.
A recent Economist article www.economist.com/node/21542796 provides excellent insights on strategies both established firms pursued in response to changes in the film market. There are also many lessons we can learn here which I believe help entrepreneurial firms seeking to identify and pursue new opportunities in highly competitive, changing, uncertain, high risk markets. Here are three insights that I believe are particularly helpful:
• When Traditional Markets Change Dramatically, New Opportunities Emerge: Think Out of the Box (or ‘room’ as I noted in my recent book) To Create Winning Strategies
Look at how Fujifilm responded to the demise of the film market. Developed new products (cosmetics, others) leveraging competencies in chemicals and technology; Created film technology for displays, among other ideas. These new directions also create opportunities for agile entrepreneurial firms who embrace a similar
strategic vision, understand where technologies and markets are heading, understand where and how business processes can be adapted to create value and competitive position. What this also implies are new alliance opportunities at all levels including technology, distribution, marketing reach and so on. The starting point is to “think strategically’ which is an entrepreneurial survival skill in today’s dynamic, global marketplace. Strategy planning matters, and it is a critical entrepreneurial skill worth honing.
• Avoid the ‘Paralysis By Analysis’ Problem
Kodak was hampered by slow reaction to rapidly changing market and technology shifts. As noted, Rosabeth Moss Kanter of Harvard Business School suggested that Kodak executives “suffered from a mentality of perfect products, rather than the high- tech mindset of make it, launch it, fix it.” The message here for entrepreneurial firm managers? Obviously have to balance this with some analysis, but it often “Better to beg forgiveness than ask permission” to successfully pursue new business directions.
• Disruptive Technology Innovation Always Occurred and Always Will, Only Faster
To see the traditional film market disrupted is really no surprise. Every sector is changing, and many are disappearing due to tsunami- like technology shifts. We can discuss how long market shifts will take, what new sectors will emerge, who will be
competitors and so on, but the key point is almost all markets will change due to technology disruption . So it is really no surprise to see the demise of Kodak and many others (e.g., minicomputer manufacturers, large copier companies, Borders, record stores, others) who either did not fully embrace these radical changes, did not want to “disturb” their current business, or thought their businesses would exist forever. And these changes mean opportunity for agile entrepreneurial firms that understand
the changing competitive dynamics and develop well crafted strategies.
Paul B. Silverman
Author: Worm on a Chopstick : Understanding Today’s Entrepreneurial Age: Directions, Strategies, Management Perspectives http://paulbsilverman.com/books/
Linked in: Paul Silverman