Success in branding and marketing doesn’t guarantee that the same will hold true in the future. That’s the problem: big businesses fail in the same way as small ones. Some businessmen were once in powerful positions in their industries, but they made wrong decisions or failed to adapt. In this article, the focus will be on the real-life cases of 9 companies that failed due to various reasons. They either did not pay attention to the latest trends or made wrong decisions. These examples clearly show that even in a relatively short time period, a business's branding fails in a constantly changing environment, and that is why flexibility is important.
Table of Contents
- Blockbuster - Ignoring Streaming
- Kodak - Missing the Digital Shift
- BlackBerry - Sticking to Old Technology
- Sears - Poor Management and Online Shopping
- WeWork - Fast Growth and Leadership Issues
- Enron - Corporate Fraud
- MySpace - Falling Behind in Social Media
- Theranos - False Technology Promises
- Lehman Brothers - Risky Investments
- Conclusion
Blockbuster - Failure to Embrace Streaming
About Blockbuster
Blockbuster was a well-known entertainment movie rental store before the rise of technology. They had thousands of stores where customers could rent movies and games, making Blockbuster the home entertainment solution of choice. In the year 2000, Blockbuster had an opportunity to purchase a new company called Netflix, which was renting DVDs via mail.
What Went Wrong
The heads of Blockbuster stores said no to the chance to buy Netflix, not understanding the importance of online streaming. Whereas Netflix fully utilized the formation of a digital streaming format, Blockbuster retained DVDs. It only became obvious that they wanted to develop their own streaming site when it was already too late. People had moved to Netflix and other streaming services, and Blockbuster was unable to follow them.
Kodak - Missing the Digital Revolution
About Kodak
Kodak was a widely known company that specialized in films and cameras at the beginning and middle of the twentieth century. As it happened, Kodak had invented the first digital camera in the 1970s and this product alone could have greatly turned around the future of struggling companies.
What Went Wrong
Kodak failed to adopt the digital technology for their production instead they stuck with the film operations because they would lose this stream of the income. This limited decision made it easy for their competitors who adopted the uses of digital cameras and smartphones to pull ahead of them. Before Kodak tried to change over to digital, it was no longer the market leader; therefore, it never regained its position.
BlackBerry - Stubbornness Over Touchscreens
About BlackBerry
Blackberry name is closely associated with early days of smart phones, it had a unique keyboard and secure messaging service. Employees selected BlackBerry phones for their performance and secured circumstances during work-related operations.
What Went Wrong
BlackBerry continued to stick to its keyboard when Apple developed iPhones with screens. This resulted in an underestimation of the population, and they also touched the touchscreens while at the same time holding on longer to the model. BlackBerry's failures resulted in a market niche that was immediately occupied by iPhones and Androids.
Sears - Mismanagement and Online Shopping Competition
About Sears
Sears is a retail store company that operates in the United States and sells everything from clothes to household appliances and almost everything in between. It existed for many years and also had a clearly established brand image.
What Went Wrong
Due to ineffective management, they failed to notice that consumers’ habits are changing and did not develop a good online sales platform as the sales through the Internet started to gain popularity. Mismanagement and shutting down of stores at a very high rate forced it to declare bankruptcy.
WeWork - Rapid Growth and Leadership Failures
About Wework
WeWork was a co-working space startup that became a unicorn company, by providing flexible office space for freelancers, startups or other large-scale organizations. Once it was estimated to be worth in billions and was considered a revolutionary firm in the real estate sector.
What Went Wrong
The youthful CEO of WeWork, Adam Neumann, wanted the company to grow at a very fast pace, leased too many areas without making profits, and spent way more than they earned to boot, indulging in debts. The issue that led to the company suffering scandals and making bad decisions put a lot of pressure on the investors, thus reducing their trust, reducing operations, and laying down many of the employees.
Enron - Corporate Fraud and Financial Scandal
About Enron
Enron was a leading American energy company that operated in the energy delivery industry. It became widely known for trading energy, gas, and electricity and was considered one of the most successful corporations.
What Went Wrong
The company failed in 2001 when it was found that it was actually faking its earnings. This resulted in executives being jailed for fraud and changing rules and laws regulating corporate activities for eternity.
MySpace - Falling Behind in Social Media Innovation
About MySpace
MySpace was established in 2003 as one of the first social network resources with options such as account creation, searching for friends, listening to music, watching videos, and reading posts. This was extremely famous earlier in the middle of the two thousand.
What Went Wrong
MySpace was much slower in addressing the needs of the users, similar to how Facebook was slow to provide more features and an updated layout. The users went over to Facebook, which was the main reason for MySpace's decline.
Theranos - Fraudulent Technology Claims
About Theranos
Theranos was a health technology start-up company started by Elizabeth Holmes. It promised to bring a change in the blood tests as it aimed at creating a machine that could run several tests with just a drop of blood.
What Went Wrong
Theranos never developed the technology to do what it claimed it could, but it continued fund-raising and lying. Last but not least, the audience, Theranos investors, patients, and physicians were given fake information. The company shut down, and the managers were charged with fraud.
Lehman Brothers - Risky Mortgages and the Financial Crisis
About Lehman Brothers
Lehman Brothers was a global financial services firm and one of the largest firms on Wall Street. The principal flow of investments was directed to housing, particularly subprime mortgage lending.
What Went Wrong
Even when the housing bubble that started in 2007 was nearing its collapse in the second half of 2008, Lehman Brothers was still trading in mortgage-backed securities, which had proven to be very risky. The company could not sustain such losses, so it had to declare bankruptcy, which led to the world financial meltdown. Lehman Brothers was one of the biggest failures in the history of banking.
Conclusion
These branding and marketing failures contribute to the realization that no company, regardless of its previous competitive advantage, is larger than the market and that it can easily fail wherever they are. In the current business environment, there is a need to adopt and encourage an innovation culture as well as make the right decisions to continue with business activities.
Altogether, the nine companies discussed above prove that victory is temporary and even giants can collapse. All these companies made major errors, either by not adapting or growing too quickly or, in some cases, by poor leadership. For example, Blockbuster did not recognize streaming, Kodak failed to look into digital photography, and Theranos made bold, although fake, promises.
