Eastman Kodak, Blockbuster Inc. and Creative Destruction: The Rise and Fall of Two Great Iconic Companies

TitleEastman Kodak, Blockbuster Inc. and Creative Destruction: The Rise and Fall of Two Great Iconic Companies
Publication TypeConference Paper
Author(s)Gershon, R. A.
Affiliation (1st Author)Western Michigan University
Section or WGCommunication Policy and Technology
DateFri 28 June
Slot CodeCPTF1b
Slot Code (Keyword)CPTF1b
Time of Session9:00-10:30
RoomQ121
Session TitleICT, media and business strategies
Submission ID7292
Abstract

The lessons of business history have taught us that there is no such thing as a static market. There are no guarantees of continued business success for companies regardless of the field of endeavor. Schumpeter (1942) introduced the principle of creative destruction as a way to describe the disruptive process that accompanies the work of the entrepreneur and the consequences of innovation. In time, companies that once revolutionized and dominated select markets give way to rivals who are able to introduce improved product designs, offer substitute products and services and/or lower manufacturing costs. The resulting outcome of creative destruction can be significant including the failure to preserve market leadership, the discontinuation of a once highly successful product line, or in the worse case scenario - business failure itself. This paper presents a unique opportunity to look at modern media and information technology and the problems associated with preserving market leadership. Specifically,it will address the following question; why do good companies fail to remain innovative over time? This paper will further consider some of the contributing reasons that lead to business failure. The arguments presented in this research inquiry are theory-based and supported by case-study evidence. Special attention is given to two media companies,, Eastman Kodak corporation and Blockbuster Inc. These companies were selected because they directly experienced the effects of a disruptive and changing technology that eventually resulted in business failure. A major argument of this paper is that the warning signs of a troubled business often exist for long periods of time before they combine with enabling conditions to produce a significant business failure. Both Eastman Kodak and Blockbuster knew they were at risk of failing well in advance of their eventual decline. If two such highly respected media companies can go from iconic to irrelevant, what might we learn by studying their downfall and how do other companies avoid a similar fate?

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