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Therefore, business decisions are all about balancing risks with rewards and deciding when to go forward or when to wait
Kodak— The Digital Camera
The turn of the millennia was an incredible time for technology, with companies like Microsoft and Apple vying for top spot of the tech industry. One of the first mainstream inventions that balance technology with an accessible price tag was the digital camera, which first came out in the early nineties. However, Kodak had actually developed and patented the technology for such a product way back in 1975. They had the world's first digital camera made and ready for production— but instead of moving forward with it, they buried the invention.
Why? It turns out Kodak was worried that the introduction of the digital camera would mean the end of the camera film industry, of which they enjoyed a ninety-percent market share. Instead of being innovative, the company sat on the breakthrough and relied on their current technology to see them through.
Coca Cola— ‘New Coke’
In 1985, while facing declining sales and increased competition from Pepsi, Coca Cola made a radical decision: to change their highly-secretive formula, which dated back to the company’s inception nearly one hundred years prior. This new Coke was sweeter, more similar to Pepsi, and came with a complete rebranding of the company’s advertising and branding.
Unsurprisingly, there was a massive backlash against the product, and within months, Coke launched ‘Coca-Cola Classic’, which was a complete return to their original formula and image. Sales immediately jumped, and ‘New Coke’ was quietly phased out over the next few years until everyone forgot about it.
Nowadays, Coca Cola is one of the most recognized brands in the world, and they rely heavily on their Classic, All-American image to maintain that exposure. However, for a brief moment back in the eighties, their almost-flawless executive team slipped up and made a gaff that could have turned into a major problem, had they not been smart enough to immediately reverse it.
The market moved forward, as it always does, and nowadays with companies like Canon, Sony, and GoPro gaining international recognition, it is hard not to wonder if Kodak could have prevented themselves from fading into near-obscurity if they’d only had a little higher risk tolerance.