Another once-dominant iconic company, Kodak, declares bankruptcy and the stories fly about mismanagement, the lack of visionary leadership, and lost opportunities. After all, Kodak invented the digital camera in 1975 and did nothing with it for 15 years. How could they not see how this would destroy their core business?

I liked Rick Newman’s article about Kodak in U.S.News & World Report. It’s more even-handed than most and comes to the conclusion that maybe there wasn’t anything Kodak could have done to stem their long decline. Kodak projected the rate at which digital photography would displace its core film business and tried to time their entry into digital so it wouldn’t damage their film sales until the technology matured. They tried diversification into pharmaceuticals and medical diagnostics based on their expertise in chemical and imaging technology. They tried hiring CEOs from different industries. All of these are touted as good strategies under these circumstances and all of them failed.

The Economist looks at Kodak and Fujifilm, and wonders why Fujifilm is now doing so well compared to Kodak. Their stories are quite similar. Both enjoyed lucrative near-monopolies in their home markets, both saw that their traditional business, film, would become obsolete, both saw that digital would never be as profitable as film, and both tried to diversify.

And that’s what struck me—how similar their two stories were even in their attempts to deal with their problems. We want simple answers to explain why Kodak went bankrupt and Fujifilm thrived, but there aren’t any because the problems are too complex for a simple answer.

There are a lot of theories for Kodak’s decline:

  • They were too slow in responding to market changes
  • They tried to create perfect products instead of introducing products quicker and fixing them later
  • They changed leadership too often which led to lack of consistency
  • They were too complacent because they had been a near-monopoly for too long
  • They thought they could just rely on the power of their brand and marketing expertise to move into new fields

The facts are that Kodak was never going to be as successful as the company they were in the in 1976, when they accounted for 90% of film and 85% of camera sales inAmerica.

There’s much to learn in analyzing why some companies succeed and others fail but each company’s situation is unique and we aren’t going to end up with simple rules we can put in business books that will tell the next company exactly what to do when they face similar problems.

That’s why we designed Income/Outcome, our business simulation game, to be open-ended, not favoring one strategy over another. Teams compete to create the most successful business, learning to analyze financial data, create budgets, develop and implement strategies. They have to revise their plans based on market changes and the actions of their competitors. Some companies thrive, others struggle, but each team learns from their successes and failures and by looking at how competing strategies fared, just like in real life.

Learn more about income/outcome business simulation workshops at