Kodak's Final Moment
As someone who is interested in the long run, the bankruptcy of Kodak raises some interesting questions. Kodak, in its prime, was a very profitable business, with one of the most recognizable brands in the world. Its main product during its 138-year history was film for handheld cameras, a market which it dominated and which had large margins. However, the development of the digital camera and mobile phones with in-built cameras has resulted in a huge decline in demand for film. Although Kodak was instrumental in developing digital camera technology, this industry was very competitive and had low margins. Could Kodak have avoided bankruptcy by moving into different product markets? Can old-technology firms transform themselves into new-technology firms? Should Kodak's shareholders and managers have wound their business up voluntarily a decade ago?
As someone who has studied companies in the nineteenth century, I have a unique perspective on company longevity. Few of the top companies traded on the London Stock Exchange in 1870 exists today as an independent entity - most have disappeared, some have been taken over or have merged with other companies, and the assets of some are now owned by the UK taxpayer (e.g., Bank of England). From this perspective, Kodak was a long-lived company.