Yelvington’s observation seems to make sense at first. In
fact, it’s a twist on Ted Levitt’s observation in his classic Harvard Business Review article,
“Marketing Myopia,” that the railroad’s big mistake was thinking they were in
the train business, rather than recognizing they were in transportation.

But Levitt’s thinking was a little more subtle than that.
The railroads didn’t fail because they didn’t have a sufficiently expansive
conception of their product (i.e., “trains”) but because they didn’t understand their customers, who really didn’t care about trains. Sure you can get customers excited about a new  product’s bells
and whistles, but in the end all they’re willing to pay for is the job
they want to get done.

If Kodak had really figured out what its customers wanted,
it would have dropped its chemical business like a hot potato. In fact, it took
a half-hearted step in that direction when it spun off the Eastman Chemical
company.  But it couldn’t free
itself completely from its know-how in photo processing and film-making – not
to mention all the machinery involved. So instead of moving aggressively into
digital technologies, it fiddled around with instant photography, another
chemically-based business. It’s current foray into printers isn’t much
different.  (To be fair, it’s very
hard for an old-line, earnings per share company to climb the wall into a new
market carrying the weight of all those sunk costs.)

I think the same applies to newspapers Thinking of them as “expensive commercial advertisement printing
and delivery systems” is to focus on just one of the products they’ve used
to help subsidize their real purpose – bringing timely, often exclusive, and always
expertly mediated news and information to people.  

For more than a century, newspapers have used printing presses to accomplish that purpose.  To avoid the railroads’ mistake, they
need to figure out how to use the assets they have – their journalists – and the assets they need — new distribution platforms — to fulfill that purpose profitably.   

The chemical companies Kodak spun off are PROFITABLE. Don’t assume they are not.