Film sales didn't collapse "overnight" in any way -- it should have been easily predictable and their sales of crappy, creaky plastic digital compacts and printers should have told them. If that rubbish was selling, film was doomed.
More to the point, the sales of Kodak Photo CD many years earlier should have tipped them off to what would happen once a small, cheap-enough digital camera met the broad quality of the lowest resolution photo CD scan (or even approached it, given how bad most people's photos are and how digital cameras made better photography easier for everyone). And given how they were doing the R&D, they should have known what was coming. Not just people not buying film, but people not really paying for prints, which is a double-whammy.
Kodak management wasn't crazy but it was entitled, boorish, inept and lazy. A classic late-stage US company. They were overconfident about their reputation and their essential status (just like Intel). At best, perhaps they were just too self-absorbed to be able to dispassionately react to what was happening.
The problem is that digital required a different approach to profit because the revenue and profit was lumpier.
As a result Kodak's biggest problem is that they could not possibly have pivoted even late on, because their line of digital products was a total pile of exploitative shit over the long term, that offered intermediate, semi-pro and pro users nothing at all of value and was already reviewing rather badly.
People outside the USA simply didn't buy Kodak digital cameras because we didn't hold Kodak in the same regard, and there were so many other choices.
Kodak also overstretched itself repeatedly in international markets, including a hilariously stupid late-era buyout of a competitor's high street lab chain in the UK so there were times when really small towns had two tiny, lacklustre Kodak stores when they barely needed one.
Fujifilm did better (by planning both good digital cameras and a transition to the well-marketed Instax and digital Crystal Archive printing as well as building ancilliary businesses). Heck, even Ilford hung on for longer, to the extent that their business produced better consumer inkjet materials than anyone else. When they were finally restructured in administration they had made the film business lean enough to survive into a management buyout.