The business world is indeed changing rapidly, driven by technological advancements which have influenced change in production method, process change due to adoption of artificial intelligence in business, shifting societal values, change in taste and global challenges. Before the 12th century, monasteries were the main source of large-scale beer production. Industrial revolution and mass production followed, buoyed by technological advancements like refrigeration, steam power, pasteurisation, and automated bottling revolutionised beer production, allowing for mass-scale year-round brewing. The prohibition era of beer production in the US and Canada significantly impacted the industry, with many breweries closing down, leaving a few large producers dominating the market. The post-prohibition era followed and the beer market was dominated by a few large companies, with limited variety.
In recent decades, a resurgence of smaller, craft breweries has brought new flavours, styles, and a focus on quality necessitated by control of food and drug agencies, challenging the dominance of mass-produced beers. The increasing environmental impact of beer production, including water consumption and greenhouse gas emissions, is becoming a growing concern and may affect the way beer is brewed. Environment, Social Governance (ESG) is now a major factor in the way we do things. To remain relevant and thrive, organisations must adapt to changes. Kodak’s failure stemmed from its inability to adapt to the digital revolution, prioritising its established film business and resisting the shift towards digital photography. Despite being a pioneer in digital technology, Kodak miscalculated the market’s demand and failed to embrace the new technology, ultimately leading to its bankruptcy in 2012.
The key factors in Kodak’s decline are: (i) Resistance to change: Kodak clung to its film-based business model for too long, even after the rise of digital photography, and was slow to embrace the new technology; (ii) Missed opportunities: Kodak had the potential to become a leader in digital imaging, but failed to capitalise on the opportunity and instead focused on its traditional film business; (iii) Leadership issues: Poor leadership decisions, including a lack of strategic vision and a reluctance to take risks, further hampered Kodak’s ability to adapt; (iv) Internal focus: Kodak became overly focused on its existing products and internal processes, neglecting the needs and preferences of its customers; (v) Diversification attempts: Kodak’s attempts to diversify into unrelated businesses, like the acquisition of Sterling Drug, also strained its financial resources. (vi) Lack of innovation: Kodak’s inability to innovate in the face of digital technology and changing market trends contributed to its decline; (vii) Ignoring digital technology: Despite being a pioneer in digital technology, Kodak’s leadership dismissed the potential of digital cameras and underestimated their impact in the market.
When the Japanese came out with cheap electronic wrist watches, the Swiss clung to their mechanical art. And the Swiss won the luxury wrist watch market because it was fashionable. For fashion and all other luxury products, complexity is directly related to cost.
In 2012, Kodak filed for bankruptcy, a consequence of its failure to adapt to the digital revolution. Kodak emerged from bankruptcy in 2013, restructured its business, and focused on its core strengths, such as digital printing and motion picture film. Kodak continues to operate today, though not as a major player in consumer photography. Kodak’s major focus now are: prints, digital printing solutions, inkjet printing presses, imprinting systems, inks and primers, offset printing solutions, printing plates and plate setters.
Olympia & York Developments Limited (O&Y) was a Toronto, Canada-based property development firm. At a time, O&Y was considered the biggest property development company in the world. It built major commercial and industrial buildings including Canary Wharf, and the World Financial Centre in New York. But O&Y failed to adopt marketing innovations in the property development business which led to its bankruptcy in 1993.
Companies must be able to adapt to changing market conditions and embrace new technologies and processes to remain competitive. Companies must (i) embrace innovation: Failure to innovate can lead to stagnation and ultimately, untimely abortion; (ii) focus on customer needs: Companies must prioritise customer needs and preferences to stay relevant in the market; (iii) Strong leadership: Effective leadership is crucial for navigating complex changes and making strategic decisions; (iv) Financial discipline: Companies must manage their finances prudently and avoid unnecessary risks.
Kodak and O&Y’s stories serve as cautionary tales for businesses that fail to recognize and adapt to disruptive changes in the market. By embracing innovation, focusing on customer needs, and prioritising financial discipline, businesses can be sustainable.
The key areas for adaptation by corporates are:
- Digital transformation: Embracing new technologies, such as AI, block-chain, and data analytics, to enhance operations and customer experiences.
- Sustainability and Environmental, Social, and Governance (ESG): Prioritising sustainability and (ESG) considerations to ensure long-term viability and social responsibility.
- Diversity, equity, and inclusion: Fostering inclusive workplaces and products that cater to diverse customer needs.
- Agility and resilience: Developing flexible business models and strategies to respond to unexpected disruptions and changes.
The benefits of adaptation to change by corporate organisations include:
- Staying competitive: Organisations that adapt to change are better positioned to compete in a rapidly evolving market.
- Innovation and growth: Embracing change can lead to new opportunities, products, and services.
- Enhanced reputation: Organisations that prioritise sustainability, diversity, and social responsibility are often viewed more favourably by customers and stakeholders.
As beneficial as adopting changes is to business organisations, corporations still find it difficult to adopt change. The challenges are:
- Resistance to change: Overcoming internal resistance and cultural barriers to implement new strategies and technologies may be a hurdle of change adaptation.
- Resource constraints: Adopting change usually involves investment of resources like funds, time and human resources. Allocating sufficient resources, such as time, budget, and talent, to support adaptation efforts may be difficult.
- Balancing short-term and long-term goals: Managing the trade-offs between immediate needs and long-term sustainability is a challenge.
By embracing change and adapting to the evolving business landscape, organisations can position themselves for success and create a positive impact on their stakeholders and their immediate environment.
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