Insights from Business : Survival of the Fittest in an Economic Jungle?

INSIGHTS FROM BUSINESS : SURVIVAL OF THE FITTEST IN AN ECONOMIC JUNGLE?

Businesses have to remain close to customers in a globalised world. They have to cut costs ruthlessly. They need to improve quality continually. They have to put their best foot forward and remain wedded to latest technology. Competitive moves need to be predicted and their impacts must be assessed from time to time. They should position themselves on the right side of the fence---while handling issues relating to government and the society at large. They can create, communicate and deliver value to customers only when they are able to run with the times and remain close to their operating environment. What happens when a company fails to remain close to its environment? Corporate history is flooded with infamous examples of this kind where companies started off well, outperformed competition by a mile for fairly long periods of time and finally, one day committed those silly mistakes and never found their way back to glory!

Eastman Kodak revolutionized photography industry by recording images on a film (as against the traditional glass plates) through a novel product called, portable camera, in early 1901. . The camera was a major hit with millions of customers. The name--Kodak--became the most respected brand of photographic films almost instantaneously. Continuous innovations (especially the colour film--those yellow little boxes of film) and the absence of competition took Eastman Kodak Company to dizzying heights over the years. It became a giant corporation registering sales of over $20 billion by 1990--powered by contributions from a vast army of over 1 lakh employees. The ad campaign -- "You press the button; We do the rest"--made Kodak a household name all over the globe. Meanwhile, Fuji Photo Film Company of Japan entered the fray with a little green box of film that challenged Kodak's dominance for over a century. Using latest manufacturing technologies, Fuji cut the price down aggressively without, of course, sacrificing quality. For the customers, both were equally good. But the big price differential between product prices, brought Kodak down and the company lost the title of "official film of the 1984 Summer Olympics to Fuji. From then on wards Fuji gained market share steadily as customers came to realize that Fuji is a legitimate alternative to Kodak and is not just a low price brand. The introduction of digital imaging technologies at around the same time---from the likes of Sony, Cannon, Motorola, Casio and Hewlett-Packard changed the rules of the game, more or less, permanently. In the interim, a bad acquisition (a pharma company) and some failed innovations (entering office copier business, introducing a 35mm camera; a disposable camera--in a belated manner-- and some heavy investments in Kodak Advantix system running to over $200 million) have had a telling effect on the brand image. When the mobile phone technology took off and the home computer market exploded in a big way, it was all over for Kodak (2008 reported revenues just $442 million). The lethargic response to tumultuous changes in the industry environment, according to experts, brought the company down. As Trout commented: "if you are