“If a buggy whip manufacturer defined its business as the “transportation starter business”, they might have been able to make the creative leap necessary to move into the automobile business when technological change demanded it”.
Today we hear that Eastman Kodak has filed for bankruptcy protection. This got me thinking about Theodore Levitt and his buggy whips. In 1960 Levitt published ‘Marketing Myopia’ and laid the foundations for what we have come to know as the modern marketing approach. Levitt, one of the architects of our profession, popularised phrases such as globalization and corporate purpose (rather than merely making money, it is to create and keep a customer), and the core tenet of his ‘Marketing Myopia’ article is still at the heart of any good marketing planning process or submission. In this article Levitt asked the simple but profound question … “what business are you in?”. As it turns out, this is a question that some years ago Kodak failed to address … and from then there was then a certain inevitability about today’s decision.
Levitt argued that most organisations have a vision of their market that is too limited – constricted by a very a narrow understanding of what business they are in. He challenged businesses to re-examine their vision and objectives. The ability to successfully define, and to some extent ‘shape’, the market you compete in today – and will compete in tomorrow – is the foundation of good marketing. It is a critical first step to maximising business opportunities and identifying those competitive threats that may imperil the long term prospects of the business – or change the rules of the game to make its products or services irrelevant.
The sad irony is that although Kodak had the means to change the rules of the game the company chose ignore it. Kodak was one of the original pioneers of digital photography (claiming to have invented the world’s first digital camera in 1975), but management would not approve the launch of digital cameras in the early 1990s …. they could not see how this disruptive innovation could secure the firms long term future and instead focused on avoiding cannibilisation of the core film business. The rest is history!