Kodak missed its opportunity to transform into a digital business.

"It's a failure to make the transition to the digital world quickly enough - and
they got left behind," he said.

"They couldn't diversify their business. You only have to look at their competitor
Fuji Film, which successfully diversified and are still alive today because of it.

"It's going to be another text book example for students of the future when looking
at companies that failed to transition from an old analogue world to a new digital
world."

first prototype of a digital camera was created in 1975 by Steve Sasson, an

engineer working for … Kodak.

Lack of R&D.
Though they created digital cam they couldn't proceed further

Kodak mismanaged its investment in digital cameras, overshooting the market by

trying to match performance of traditional film rather than embrace the simplicity
of digital.

Before Mark Zuckerberg wrote a line of Facebook’s code, Kodak made a prescient
purchase, acquiring a photo sharing site called Ofoto in 2001.

While Kodak stagnated and ultimately stumbled, Fuji aggressively explored new
opportunities, creating products adjacent to its film business, such as magnetic
tape optics and videotape, and branching into copiers and office automation,
notably through a joint venture with Xerox. Today the company has annual revenues
above $20 billion, competes in healthcare and electronics operations and derives
significant revenues from document solutions.

Kodak created a digital camera, invested in the technology, and even understood
that photos would be shared online. Where they failed was in realizing that online
photo sharing was the new business, not just a way to expand the printing business.

those who see opportunities are expansive.

It is not that Kodak had failed to imagine a new future. It had failed to
capitalize on the imagination and inventiveness of its scientists.

Nagji and Tuff distinguish three main types of innovation: core, adjacent and
transformational. With core innovation the company focuses on making incremental
changes to existing products for existing customers. Adjacent innovation involves
taking something the company currently does well and applying it to new markets or
to the development of new products and services for current markets. With
transformational innovation the company focuses on creating new offerings for new
markets.

Nagji and Tuff propose a “magic formula” of 70-20-10 that most companies can use to
balance their portfolios. This means that companies should be investing 70% of
their resources into core innovation, 20% into adjacent innovation and 10% into
transformational innovation.