Business lessons from failed global giants
By Paul Kariuki
| Dec 15th 2021 | 3 min read
Startups are increasingly disrupting established businesses, thanks to the ever-evolving technological innovations. Some businesses that were once market leaders are now a pale shadow of their former selves and behind their failures lie key lessons.
Some, however, have known of ways to stay in the market through innovation. Take the example of Amazon whose core business is online shopping. It has since diversified and today produces television shows and offers web services.
The success behind the Amazon Brand is ideation, incubation and scaling. Every business idea that their employee comes up with is looked into carefully and if deemed as of potential, the next phase is incubation, where it is tried on customers and if seen as a success, it is scaled.
Not many companies take such experiments or the gamble to try an idea and that’s how innovation dies or a business closes shop for good. Here are five examples of failed businesses whose stories would be reading differently today.
Nokia and Blackberry
The two were market leaders in their eras. Many have nostalgia for the iconic Nokia cellular phones that were noted for their long battery life but did not have features like the current makes of smartphones in the market.
Nokia would still be a market leader in cellular phones had it focused on software development with the coming of the internet instead of focusing on the hardware. By focusing on the voice, the company began its gradual decline and their comeback attempt with a smartphone was not a successful one owing to the phone’s operating system that had a bad user experience.
Blackberry phones can be remembered by their keyboards that one had to key in manually but they failed to innovate by launching products with touch screens and this ate into their market share.
They say that the customer is always right. Blockbuster should have listened to its clients. As a leader in entertainment content, Blockbuster, which had successfully transitioned from VHS to DVD, loved it when customers would stream in their brick and mortar stores and did not entertain the notion of shipping the customers’ orders. Netflix capitalized on this and ate on the traditional Blockbuster market share.
Had Blockbuster partnered with its competitor, it would be in business today. The problem is Blockbuster took it lightly that Netflix was only serving a niche customer base and not the mainstream ones. Then Netflix went a notch higher and began streaming services, spelling the final nail in Blockbuster’s coffin.
How about making a product that you don’t define how or it is to be used? Segway scooter comes to mind. The idea behind this fuel-efficient innovation was to revolutionise transportation but the innovator did not specify where it was to be used. Was it on pedestrian walkways or the roads as part of the motorized traffic? That was the question the authorities had to figure out. What seemed to have been a good idea at easing personal movement died as no one was willing to buy a product they did not know where it was to be used.
The Kodak company may not have foreseen the future of photography, especially the digital cameras or smartphones complete with high-resolution cameras and that have redefined photography. Steven Sasson, a Kodak employee, had in 1975 come up with the idea of digital photography to the company but it was rejected as the company feared it would affect their film market. Had the company bought in the idea, it today would be a market leader in digital photography. Unfortunately, it filed for bankruptcy in 2012.
Yahoo was amongst the popular internet sites especially with their online advertising at the onset of the dot.com era. It would still be a popular site today had it not invested in becoming a giant media company and instead focused on competing as a search engine. Google happened and spoiled the party. Despite Yahoo investing in cloud storage known as Yahoo Briefcase, they failed to capitalise on it with Google capitalising on its Dropbox and Google Drive products. Yahoo had an opportunity to buy Google in 2002 but failed. The regrettable part of the company was letting Mark Zuckerberg run away with the Facebook product that today has revolutionised communication.
How British shareholders Linkham burnt their fingers at Resolution Health
- Guests get discounts as airlines scramble for Africities summit
- For Kajiado Maa farmers, cows are their new bank
- Audit report: 17 parastatals fail to repay Sh218b loan arrears
- Auctioneers accuse banks of invading their turf
- Skilled but no papers? You are hired