Kodak was afraid to adapt, lest it annoy what it considered customers.
Retail film sellers liked the model of film, requiring end users to visit the store 3 times: buy film, return film, get prints. Digital photography of course threatened this model, and retailers threatened to drop Kodak products entirely if Kodak started pushing toward digital. Viewing retailers, who buy in large bulk, as the customer it was decided to not annoy them. Thing is, it’s the end users who decide what to buy - not the retailers. End users decided to switch to digital en masse, went to whoever provided good digital cameras & processing (ex.: HP) at the time, the retailers adapted, and Kodak was left unable or unwilling to catch up. End users wanted the ease of digital imaging more than the resolution and color depth of film, which was incompatible with corporate ideals and cash-cows.
That’s not to say Kodak didn’t have good ideas or the ability to make ‘em happen. They made awesome high-end digital cameras, and worked on digital cinema projectors, but were too beholden to retailers and too enamored with the then-superiority of photochemical imaging to disrupt the film model.
At the key moment, the technology was there to implement Eastman’s “you push the button, we do the rest” even better than he envisioned: take picture, photo prints appear in mailbox. That could have been huge, and at least extended the physical prints market. Alas, my influence there was minimal at best at the time...
“Retail film sellers liked the model of film, requiring end users to visit the store 3 times: buy film, return film, get prints.”
And Kodak should have seen that model as being cumbersome to the consumer and forged ahead with at least storage devices.