In 2000, Kodak had 170,000 employees and sold almost 90% of photo paper world wide. Together with Fuji, the two companies dominated the photo film business. Not for long, in 2012, Kodak filed for bankruptcy. The business model had been unravelled by the development of the digital camera. A classic example of digital disruption, perhaps.
The Kodak “moment” as we term it, lasted over a period of decades. Kodak had developed a digital camera in 1975, the first of its kind, the camera was dropped for fear it would threaten Kodak's photographic film business … so much for “First Mover Advantage”.
Today, businesses do not have the luxury of decades to adjust to the challenge of digital disruption. Digital disruption is now easier, faster and cheaper than ever. The speed of process is accelerating. The rate of change is exponential.
It is the era of the “virtual company”. SaaS, Software as Service is the new fast growth business model. Uber is the great disruptor in the taxi business, yet owns no vehicles. Airbnb is the great disruptor in the hotel business, yet owns no hotels.
The digital masters, Apple, Google, Amazon and Facebook are setting the standards by which all service companies must be benchmarked. Predictive analytics, pattern behaviour, machine learning, neural networks lead us all in search of the great algorithms which will accelerate consumer access and unlock spending in the future.
Understanding the customer, has never been easier but is ever more complex and demanding, such is the growth in the data load. Businesses must adapt to the challenge of digital disruption by first challenging their own organisations and business models.
It is said that when the Chinese developed their stealth bomber, the CIA didn’t see it coming. Don’t be caught out. This is the era of digital disruption - No time to thumb your nose at the clear and present danger. Don't miss out on our series of articles on Digital Disruption, out shortly.
Our YAHOO case study will be released on Sunday 26th June. We think it is our best yet! Here's another chart from the case study. If you have any comments or suggestions, please feel free to drop me a line. Keep up to date with the latest thinking in corporate strategy.