Overcoming Business Blindspots - Learning from the demise of KodakIn the weeks following Kodak’s decision to file for bankruptcy, industry commentators and analysts have been busy conducting a post-mortem to figure out what contributed to its catastrophic downfall.

  • Kodak enjoyed meteoric success in the 1960s and 1970s, with the release of the Instamatic camera series. From its heyday in the eighties there followed a slew of bad corporate decisions, paving the way for a slow, precipitous decline. It culminated in the bankruptcy hearing in New York last month, a depressing chapter in the company’s iconic history. It’s hard to believe this is the same pioneering company responsible for developing the first digital camera in 1975.
  • Kodak’s demise has been attributed to a number of competitive failures and poor decisions rather than any one singular action. By failing to properly assess and respond to technological innovations, market changes, consumer attitudes and competitor advances, the once powerful photographic giant has been toppled from its perch.
  • The unfortunate events at Kodak have served as a warning shot to corporate behemoths against taking their dominant market position for granted. In business there’s no room for complacency, especially at the top.

One of the purposes of Competitive Intelligence is to counteract this dangerous mindset of complacency by promoting in-depth understanding of a company’s market environment and competitive landscape. A strong, well-resourced Competitive Intelligence team will help militate against encroaching competitors and monitor early-warning signals such as changes to consumer sentiment, new trends and technological innovations. Competitive Intelligence is a business critical function for the 21st century, as companies must learn to innovate, adapt and respond to emerging threats at lightning speed in order to survive.

Below are three major areas that companies should focus on in order to overcome business blind spots and stay one step ahead of the competition.

Competitor Intelligence

A comprehensive competitor strategy takes account of direct and indirect competitors but also new entrants who pose a potential threat to your market share. Competitor Intelligence will provide you with answers to the following critical questions:

  • What are my competitors’ strategies for development (i.e. acquisitions, expansion to new markets, new products, new targets, strategic alliances, etc.)?
  • What are the most recent and relevant developments in my competitors organizational resources (i.e. financial, human, production capacity, technological, etc.)?
  • How are my competitors developing their organizations and management teams?
  • Where are their main areas of concern given their intelligence and research activities?
  • Where and who are the potential entrants into our market?

Technology intelligence

Technologies are changing rapidly and are characterized by short life cycles. Companies need to monitor developments closely to ensure that their products continue to match current and foreseeable market demands. Anticipate and track technological developments and patenting activities that may affect current product development, manufacturing and other areas. Monitor information about new technologies and research activities with the potential to generate new applications for future products or to replace existing products.

Social Media Intelligence

The scale of information being produced and disseminated online every day is breathtaking.  The unprecedented growth of Twitter and Facebook has transferred considerable power and influence to consumers and the associated reputational risks for businesses have to be managed carefully. Monitor what people are saying about your brand or products. If a false rumor or negative narrative is being spread it can be rebutted before it gains traction and wide circulation. With the right tools for effective sentiment analysis and social media monitoring, brand managers and market intelligence professionals can focus on promoting a favorable narrative about their brands, companies, and products.  Track what is being said about your competitors online and detect buzz surrounding new product releases. This will help you to anticipate any changes to your competitors’ strategy.

Jerome Maisch
Marketing Manager @digimindci. Passionate about big data & social marketing. Photography, music and hiking lover

4 COMMENTS

  1. @intelpro Rather than get into a protracted debate about whether we believe Kodak willfully disregarded key intelligence, or were just destined to fail based on their ‘linear monolithic thinking’ I guess the interesting point here for CI professionals is how to succeed in advocating for change, when the future of the business depends on it. CI professionals need to exert their influence more and ‘win-over’ decision making personnel. What interests me is finding out how CI teams fight their corner in order to hold power and influence at senior executive level.

  2. Orlaith,

    Actually there are, more often than not, some pretty clear and definitive answers as to why some businesses survive and others fail when one looks at the variables that ultimately lead to sustainable competitive advantage.

    That said, with regard to acting on intelligence to avoid a similar fate: the problem in companies with a psychological/ behavioral profile like KDK is that even if they would have acted on the intelligence as you suggest, the nature and character of their arrogance (part of their underlying C/B profile) still would have led them to make unsound decisions and fail. Why? Because they tend to look at things only through the lens of their previous glory in certain markets and assume that what made them successful at one point in time in one market can be leveraged into a new market and/or will still work in the old market that’s in significant transition with only minor modifications. So anyway, I guess what I’m saying is that KDK’s problem wasn’t lack of intel, but it also wasnt necessarily that they didn’t act on various pieces of Intel. The problem is/was given the C/B profile— that they just couldn’t help themselves but to allow linear and monolithic thinking based on past successes and experience in the old world to pervade-which gave them false confidence that they could succeed in the exact same ways.

    Lastly, no it is not an “intelligence failure” when the organization doesn’t act or act correctly, on solid intelligence presented. Intelligence personnel are only tasked to provide actionable intel, but we don’t control the culture which may or may not be receptive, nor the executives end decisions.

  3. @Intelpro Thank you for your comment. There are probably no black and white answers as to why businesses go bust and my article was probably an over-simplification designed to get people thinking about the importance of acting upon intelligence to avoid a similar fate.

    I think when we talk about ‘competitive intelligence failures’ it includes organizational failures which completely neglect to act upon prescribed threats. It’s not necessarily that the CI team within the company failed to sound the alarm but that the decision-makers higher up the ladder failed to heed the advice. We all know how hard it is for CI directors to convert intelligence into action when faced with internal opposition, it’s a challenge that has undoubtedly hamstrung the efforts of CI professionals in Kodak and elsewhere. I agree with you that the blame ultimately lies with the decision-makers, who chose not to take timely, decisive action which would have prevented the entirely avoidable fates that befell Kodak, Blockbuster and countless other companies. I read an interesting article today called ‘Why Companies Fail’ and it points the finger at a corporate culture which is entirely resistant to change. http://www.theatlantic.com/magazine/archive/2012/03/why-companies-fail/8887/

  4. As an expert in the digital printing and publishing market, having served as a Sr Strategic Intelligence analyst at HP and who ran Ricoh’s Strategic Intelligence group for 5 years as well, I can soundly stipulate that Kodak’s issues were not due to the failure of Competitive Intelligence. I know many of their folks and have been privy to what they knew and what they did not. Suffice it to say, Kodak was not blind to what was transpiring in their plate business or their traditional film business or in high end digital publishing. No, KDK’s real problem was a larger cultural issue also prevalent at HP BTW coupled with a denial mentality which led them to make bad decisions after a considerable amount of damage had already been done in each segment. Note the folks running KDK came over from HP….there’s your first clue, and then take a look at how HP has handled copier vendors encroaching on the LJ biz…same story allover again.
    Suffice it to say no, KDK’s problems were not and are not, due to a lack of competitive intelligence which you falsely infer. Having intelligence and acting on it are two different things, and culture is of tremendous import as to whether or not the best intelligence in the world will be utilized.

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