You've just described why once prominent companies fade into shadows of their former glory (eg. Kodak, Blackberry, IBM, Oracle, Microsoft). Definitely not inevitable and could be avoided with better leadership.
But not a problem, either. Turnover is natural. Nobody but the investors care very much whether Kodak pivots to digital cameras, or whether Kodak remains the leading film camera company as the industry shrinks, and a different company makes digital cameras. In fact the latter is often better for the economy and consumers, due to the better specialization.
Yes it is a problem if a company is failing not just for the investors but the workers. Nobody wants to work for a sinking ship. Can't believe this even needs to be said.
