No simple answer
Many of use in Kodak in the '80s and early '90s understood the transition that was coming. Several of Kodak's early digital products (RFS-2035, Premiere Image Enhancement System, Prism, and Photo CD for example) were hybrid products, meant to ease the transition into digital.
Film was (and still is) a very mature product that has a manufacturing process that has been perfected over many years and had (has) a high profit margin. The profit margins on equipment were never good and digital cameras and equipment looked to have low profit margins as well.
Kodak lacked the managers with imaging industry vision to figure out how to make the transition work (APS was a dreadful failure) and figure out what the new Kodak was going to look like. Note, this required a willingness to give up some short term profit to gain future profit and the managers pay incentive plans made that unlikely.