Last week I talked about well known companies who failed to continue their dominance in the face of competition or market changes.
This week I’ll turn my attention to a leader and his dominant company who designed innovative products used by millions.
He was a university dropout, an impatient perfectionist and demanding of his employees.
Yet his vision led him to be revered by those employees, customers, shareholders and even sometimes even his competitors.
Steve Jobs of Apple? No – Edwin Land of Polaroid.
Land dropped out of Harvard to pursue his own research on polarised light filters and in 1934, with his former physics professor, produced low cost polarising filters which were used in sunglasses, tank telescopes and gunsights.
After the war, Land turned his attention to photography and introduced the instant camera in 1948.
Despite a hefty price of $89.75 the first shipment of 57 cameras sold out in hours and Polaroid became a cultural phenomenon.
Ongoing refinements resulted in smaller, lighter, less expensive and easier to use versions.
As sales boomed, so did Polaroid’s share price, becoming a glamour share in the post-war period.
Edwin Land’s genius had created a new industry where Polaroid was the undisputed leader and outsold all global competitors combined.
In 1972 Polaroid’s share price reached an all-time high of $149.50, but that was the peak for Polaroid.
Polavision, an instant movie project, was an expensive failure, leading Land to resign in 1980.
Despite Polaroid products continuing to sell, the boom of digital photography destroyed many of its revenue streams, leading Polaroid to file for bankruptcy in 2001.
What’s the message for investors?
Competition and market forces are relentless.
If tempted to concentrate too much capital in one company or sector, consider the fate of Polaroid before you declare, “it can’t happen here.”
Peter Mancell is a director of Mancell Financial Group and FYG Planners AFSL / ACL 224543. This information is general in nature and readers should seek professional advice specific to their circumstances. Need help with your financial your financial future, we think we’re Australia’s top financial adviser.
