Kodak, Blockbuster, Legwork, Yarnable, Motorola have once making waves in their market but bankrupted due to a number of factors. If you intends to start a business, it is imperative that you are aware and understand factors likely to ruin your business and taking you out of the market you want to explore. Some companies went into extinction not because of the failure to obtain enough capital and inadequate basic infrastructure, but failure to act strategically on new trends in their sector.
What Went Wrong
Kodak ‘s management failed to grasp opportunities technology affords them in the area of new product development and meeting changing needs of its customers. Instead of having strategic thinking towards the innovation of new products, the firm was on the obsolete assumptions of who took pictures, reasons for done so and at which location. Thus, the firm considered the advent of digital as close substitute for film based photography. The firm’s inability to catch up with the trend led to its perception as traditional photography rather than digital. With this, new entrants such as Sony strategically surpassed Kodak’s distribution network. Kodak did not recognize its own limitations, and accordingly its strategy for revitalization never had much of a chance.
Blockbuster is a well know manufacturer of the earlier Video system but failed to lead its industry. Though, it was easier for the firm to move from VHS to DVD but failure to adapt to the next big change caused its demise. The top management of the firm believed that changing from analogue to digital was enough to sustain their market lead, whereas Netflix, the firm close competitor started sending videos through the mail, cable and phone companies started offering video-on-demand, and Redbox started renting videos for a buck a night through vending machines. To Blockbuster’s customers, the retail outlets of the firm seem outdated; thousands of stores were closed and firm started copying some of its competitors’ moves.
Legwork, an online social medium platform started with lots of promise. But, failure to innovate and lack of focus led to its demise. If these have not happened, the firm should be a close competitor for Facebook because it was established when the social networking movement among the Internet savvy Nigerian youths were signed up for different social sites. The management of the firm failed to introduce features capable of keeping users devoted to the site. Too much of services also contributed to the death of the firm. It involved in SMS chat marketing and other such services.
Yarnable, a micro discussion site allowing users to create topics of interest in under 140 characters like Twitter. Actually, it was designed to operate like Twitter but lack technical support, vision and focus. But the truth is that, the management of the site wanted to compete with Twitter, a distant competitor. Instead of creating features applicable to Nigeria’s social environment, they were imitating Twitter. “It’s been a challenge for Yarnable to differentiate itself from Twitter and similar services. Yarnable is struggling with how to monetize the service, which in fact has been a huge,”Mukoshy, the founder, said in an interview with techloy.com
Like others who could not take the advantage of the new technologies, Motorola failed. The firm could not establish its leadership as it was in 2003 when Trendy Razr, the biggest-selling mobile phone ever was launched. Smartphones with the features that enable users to use e-mail and others manufactured by the new entrants like Apple, LG and Samsung sent Motorola off the market.
Evidence has shown that the business empires built by successful entrepreneurs were established on the foundation of past failures. Having realized their mistakes, the owners of such empires found it necessary to learn and seek advice from proven professional business advisors.