How Success Killed Eastman Kodak
Oct 1, 2011
https://www.forbes.com/sites/petercohan/2011/10/01/how-success-killed-eastman-kodak/#1d36a0ce637a
I had a personal encounter with another one of Kodak's strategic blunders. In January 1988, I was standing next to a fax machine on the executive floor of Kodak's Rochester, New York headquarters. I watched in astonishment at a scrolling fax of a contract for Kodak to acquire Sterling Drug for $5.1 billion.
Kodak thought this was a wise investment for two reasons: drugs had high margins and Kodak made chemicals. Unfortunately, those two facts were not sufficient to make this deal pay off for Kodak shareholders.
To do that, Kodak would have needed capabilities that it lacked – such as the ability to come up with new, valuable, patented drugs or to make generic drugs at a rock-bottom cost. It only took six years for Kodak to realize that Sterling Drug was not a good fit for Kodak and sell it off in pieces.