Successful companies that ended up going under:
This time we will tell you the story of five companies that failed because they did not know how to take advantage of new market opportunities, or because they resisted change.
Some cases are truly surprising since there are companies that went from being profitable businesses to declaring bankruptcy.
The idea is that you learn from their mistakes so that you don’t repeat them in your projects, and so that you know how to act in complex or challenging situations.
Do not forget that the success of a company is not only dependent on the quality of its products or services. But also to the needs of consumers and changes in the market.
The companies we will discuss below underestimated the power of these factors and ended up failing. This is the story:
In the 90 this important Finnish company led the global mobile phone market. It was the first to produce a mobile phone in the entire world.
In addition, its differentiating elements were really attractive to consumers of the time. And it is that it offered them high-quality equipment at a reasonable price.
At that time there was no other company on the planet that could compete with a company as strong as Nokia.
She was the queen of this market segment. As if that were not enough, the success of this company was so resounding that it even managed to positively influence the Finnish economy.
However, when successful companies such as Apple and Google began to bring their flagship products to market, such as the iPhone and Android devices, Nokia‘s competitiveness began to plummet.
Instead of quickly adapting to the new software demands of emerging mobile technologies, it preferred to continue working on perfecting the hardware of its mobile phones.
That wrong decision, as well as its slow adaptability to change, caused Nokia to become another of the companies that failed in the 2000s.
For decades Kodak was known worldwide as the best camera, film, and developer company on the market.
In case you didn’t know, in the ’70s 90% of the films sold in the United States belonged to Kodak.
For many, it is one of the most revolutionary and powerful brands of all time, even though in 2012 it had no choice but to declare bankruptcy.
That year she was facing a debt of more than 5 million dollars that led her to total bankruptcy.
Interestingly, a Kodak engineer was put in charge of developing the technology for the digital camera, but the company decided not to bring it to market for fear that it would affect their revenue.
These came from the sale of photographic rolls and supplies, as well as photographic prints.
They feared that would be history with digital cameras. Therefore, instead of venturing out and adapting to the evolution of the brand and the market, Kodak preferred to remain static.
The biggest lesson that the history of Kodak leaves us, (another of the great companies that failed ), is that brands need to innovate and reinvent themselves.
Otherwise, they risk losing their audiences and being replaced by other companies that are more modern and competitive for users.
Blockbuster had a very attractive and profitable business model: that of renting original movies and video games in a modern, fun, and attractive store.
In its best times, this company managed to operate nine thousand stores around the world. And its market value exceeded $8 billion.
Indeed, although it is originally from the United States, in a few years it managed to expand to many Latin American and European countries.
But this success story turned into a resounding failure in 2013 when Blockbuster closed its last store.
Consequently, his case is a clear example of companies that failed because they did not want to evolve or reinvent themselves.
The importance of listening to the audience
Blockbuster simply refused to accept that the market changes and that the needs of consumers also evolve.
Therefore, knowing how to listen to your brand’s audience, and not underestimating the new trends linked to your market niche, is crucial in order not to lose authority, popularity, or relevance.
Blockbuster did not want to compete with other companies like Netflix, because it thought that the consumption of movies via streaming was simply unthinkable.
Ironically, in 2000 Netflix offered Blockbuster an alliance. Specifically, he proposed to take charge of their online distribution strategies, but the CEO of the company showed a resounding rejection.
The result was that ten years later Blockbuster went bankrupt, and Netflix’s takeoff could not be reversed.
Yahoo cannot be left out of the list of companies that failed, or that failed to keep up with the technology industry (one of the most competitive and changing in the world).
In 2005 this American company was an Internet giant, but in the following years, its success began to fade.
This company made serious mistakes and ultimately failed to recover. Therefore, it threw away the opportunity to become the largest firm in Silicon Valley.
Making a brief recount of his worst decisions, it should be mentioned that he refused to buy Google. Since that operation would cost about five billion dollars.
They considered that it was a very large investment of money, considering that they would be buying a “search engine”.
Instead, they decided to invest in “Inktomi”, a cheaper rival. That transaction was $257 million, but sadly it became one of Yahoo’s worst deals.
First Google and then Facebook
He also tried to buy Facebook for a billion dollars, but Mark Zuckerberg ended up rejecting the offer as too low.
Perhaps, one of the greatest lessons that these types of companies that failed leave you, is that you cannot underestimate your competition, nor consider that your business is unbeatable.
Many times companies need to support, associate, or ally with other brands or complementary companies to grow and be more profitable.
However, Yahoo thought it could grow on its own, dismissed great opportunities, and ended up being displaced by more innovative and revolutionary companies.
5. Abercrombie & Fitch
Despite having emerged as one of the favorite clothing brands of the young population during the 2000s, today it is also a benchmark for companies that failed.
Abercrombie & Fitch had high prices, and although it had managed to conquer a large segment of the market, it was finally overtaken by a new trend: that of consuming cheaper clothes.
In that sense, Forever 21 and H&M began to gain market penetration by producing fashionable pieces, for a young audience, and at low prices.