A week ago i was asked on Quora “
Given that it’s a popular questions i’ve been asked many times, i thought i’d share my answer here:
Many companies decline since they loose the “edge” that got them to be big in the first place and fail to adapt to the changing landscape.
Take Kodak as an example. Kodak became a big company due to its imaging business, mainly selling cameras and film paper.
Although Kodak was the first to develop a digital camera in 1975, the product was killed as the company faired it would cannibalize its traditional business. Fast forward 30+ years and in 2013 Kodak files for bankrupancy as it failed to transform its business to digital fast enough.
Another example – Disney: In 1983 Disney fired John Lasseter for trying to promote Disney to produce a computer animated film. John went to Pixar and produced Toy Story, Finding Nemo and other blockbusters. In 2006 Disney bought Pixar for $7B. John was exactly the kind of guy Disney Disney needed to keep its edge and spirit of innovation. As companies grow guys like John Lasseter become outliers.
Similar stories can be written about Nokia and BlackBerry, two companies that once dominated the mobile phones market. Both dominated the mobile OS market in the early 2000 but failed to adapt to the transition to touch screens and the iPhone rush.