It’s said that management involves dealing with complexity, and leadership involves helping others deal with change. Particularly in today’s 24-hour and global markets, in which your customers and your competitors can come from anywhere, the maxim’s truer than ever.
Change or die, and to do this you’re going to need some good direction. Unfortunately, more often than not businesses fail to adapt.
Blockbuster was founded by David Cook in 1985. By 1987 he had sold Blockbuster to a trio of investors for $18.5 million. Four years later Blockbuster was the undisputed leader of video rentals, and being bought by Viacom for 500 times the sum ($8.4 BILLION). Blockbuster was a weekend night tradition for most families.
Then Netflix happened.
Blockbuster took in $800 million in late fees in 2000, and also declined to purchase Netflix(the anti-late fee competitor) for a mere $20 million.
By 2002 Netflix was public and rolling, while Blockbuster posted losses of $1.6 billion. By 2005 Blockbuster finally caught on that customers didn’t like late fees, but the cards were already set against them. Upon rolling out a “no late fee” campaign, Blockbuster was promptly sued by customers in every state for misrepresenting their policies to customers. By 2010 the company was worth just $24 million with $1.1 billion in revenue losses. Knocked out.
Founded in 1888, Kodak’s original business model involved selling consumers on quality, giving away their cameras, and in turn getting them hooked on the money-making photo developing process. This was great, but was started to become threatened as early as 1948, with the advent of instant photography. Kodak knew they had to respond to the growing trend, and created their own instant developing camera in response to Polaroid. It was a knock off, however, and this was obvious, with Polaroid suing for damages from Kodak’s “theft” of their idea.
In 1990 Polaroid won close to a billion dollars in damages. While this was going on, new competitors in the film space emerged, and took advantage of the growing mass distributors like Wal-Mart, who wanted mass produced and ever cheaper merchandise. Fuji undercut Kodak, and gained notice in the west by sponsoring large events like the 1984 L.A. Olympics. After having their share of the film industry taken from them, Kodak lost $1.2 billion and laid off close to 20,000 employees in 1999.
Created for the military in 1991 by General Motors. February 2010 Hummer dealerships had about 2,500 vehicles in their inventories and has sold just 265 units nationwide the month before. What happened?
Though there’s no denying that Hummers can take you into the wilderness, over obstacles, and hold a lot of stuff while doing all of this, Hummer has come to be thought of as simply a gas guzzler of a car in recent years. As consumers doubt shifted from economic concerns about the price of gas to environmental concerns about how wasteful a vehicle like the Hummer is, sales plummeted. No one wants a status symbol that makes you look bad.
There was a time when the primary mode of business communication was BBM and everyone wanted to know your PIN. It was the phone to have in the mid- to late-2000’s (in 2007 it had more than half of the marketshare of phones in the US.)
But on June 29, 2007 the iPhone was released.
At first, Blackberry ignored touch screen based technology insisting their phones would remain the de-facto standard for enterprises especially since the iPhone struggled early with solid enterprise email security. But by dominating in the consumer market and slowly promoting Bring Your Own Device (BYOD) standards within companies, Apple redefines the market and left Blackberry stumbling and blinded by their own success.
The airline long holding the record for the quickest flight around the world, as well as providing many innovations in the airline industry ceased operations in 1991. Their use of jet aircraft, jumbo jets, and computerized reservation systems were ahead of their time. In 1968 their service extended to 86 countries on every continent save Antarctica.
If you’re wondering what went wrong with Pan Am, it was that it flew to close to the sun. As such an illustrious brand it was the target of a number of high profile terrorist attacks as well as non-terrorist related crashes. No matter their record, some PR failures are too big to get over. Flying with empty seats for three years after the flight 103 disaster, the company failed to pivot and parked its wings one last time 1991.
The post 5 Businesses That Failed to Adapt appeared first on .