Some examples of top companies that failed because of not having a proper business strategy

by | Jun 1, 2021 | Business, Weekly Blogs | 0 comments

The business strategy has assumed a huge amount of importance in today’s world. Strategic evaluation is important in any business scenario. It sets goals and objectives and determines the revenue optimization of a business. Many business giants in the past have been unable to maintain sustained growth. Lack of proper business strategies can be attributed to their downfall. Following are Some examples of top companies that failed because of not having a proper business strategy-

Companies that have failed to owe to improper business strategy

There are numerous examples of large multinational giants that have failed because of not having a proper business strategy. Following are some of them- 

Eastman Kodak

Whenever we hear the name Kodak, we think of excellence in photography cameras. For years, there was no competition to Eastman Kodak’s premium quality cameras and optical devices. However, as the age of modernization and digital development dawned upon, the magic of Kodak vanished. Its corporate management failed to adapt to the needs of digitization. Their business propositions failed to owe to a lack of proper business strategy. Although they ventured into fields of operation like healthcare imaging and memory chips, they were unable to replicate the success they initially enjoyed. 

Yahoo

The World Wide Web (WWW) was still in an untapped territory. People were still looking for avenues to generate better business search results through a web search. At such a juncture came Yahoo with its optimized search engine solutions. However, Yahoo charged their customers for web-search and email. On the other hand, its prime competitor Google was delivering search solutions free of cost. It was evident that a large segment of the customers shifted and flocked to Google. They failed to understand that charging customers for meager Internet functions was a failed business strategy and it would never reap benefits. Therefore, while Google became a household name, Yahoo ventured into other fields like Sports and Finance. It was never really successful in capturing a large market segment. 

Nokia

The market leader in the cell phone in the 1990’s and 2000’s, Nokia was the undisputed leader in the mobile phone segment internationally. However, with the development of internet options other cell phone makers embraced the concept of software as they realized that it would assume more importance than voice. However, Nokia was rigid in its policies and paid no heed to incorporate better software systems in their manufactured mobile phones. They also avoided bettering their hardware system as it might have led to shedding their niche customer base. Therefore the company failed to owe to a lack of proper business strategy

Blockbuster

2004, a year when Blockbuster was at its peak. They even peaked when the videography transitioned to DVD from VCR. However, with the inception of Netflix, videos on demand became a norm. People started watching movies and live-streaming on their mobile phone devices, personal computers and laptops. As Blockbuster did not adapt to the incoming wave of digitization in videography, they lagged behind business leaders like Netflix. This led to their failure because they did not implement a proper business strategy. Turning down the offer made by the founder of Netflix Reed Hastings was the biggest mistake former CEO of Blockbuster John Antioco committed.

Pan American World Airways

The company was considered a business leader. It was the first airline company to introduce jumbo jets and digital reservation systems. However hierarchical mismanagement, the dispute in the regulatory policies and government interference can be pointed out as the primary causes why it failed because of not having a proper business strategy

Borders

Borders were started by two brothers after completing their college education. It started as a bookstore chain with established setups at different locations. However, the onset of digital and online e-books dented the popularity of borders. Moreover, it was unable to survive the mounting debt trap that it had fallen into. Its business expansion strategy failed miserably. Therefore lack of proper business strategy to mobilize investment properly hurt the chances of growth for Borders. 

Also read: How to use WhatsApp for business? – Things You Should Know

Compaq

The company produced some of the first IBM PC-compatible computers. Compaq was the first company that created an IBM module-generated Personal Computer. However, the lack of proper business strategy led to its downfall. It was unable to compete with Dell, in the price wars. The company was ultimately acquired for 

US$25 billion by HP in 2002. The Compaq brand remained in use by HP for lower-end systems until 2013 when it was discontinued.

Toys R Us

Toys R Us emerged as one of the biggest toy manufacturers and sellers in the world. During the phase of expansion, it signed an agreement with Amazon. Ultimately due to indifference, the agreement came to an acrimonious end. This was a failure for the company owing to a lack of business strategy. Amazon started giving contracts and acted as a third party for other toy manufacturers as well. That led to the diminishing popularity of Toys R Us. 

Pets.Com

Pets.com had a valid business profile and operated at an optimum scale. Moreover, USD 300 Million vanished from the market owing to capital structuring failure. The poor timing of business expansion can be attributed to its failure. Today, the Pets.com URL redirects users to PetSmart’s website.

Tower Records

Tower Records sold CDs, cassette tapes, DVDs, electronic gadgets, video games, accessories and toys. It also launched an online interface that would help people connect with its platform. However, it failed due to improper business strategy. They could not adapt to the changing world of music, a move initiated by online streaming of music through applications like iTunes and Spotify. The music streaming business became monopolized and therefore the company lost considerable market share. 

Summary

Therefore from the above study, it is quite evident that business propositions and big multinational businesses have suffered owing to improper business strategy leading to lack of planning and ultimate business closure. Therefore small businesses have survived with judicious utilization of resources. 

Frequently asked questions (faqs)

What led to the failure of large business houses and multinational corporations?

The business strategy has assumed a huge amount of importance in today’s world. Strategic evaluation is important in any business scenario. It sets goals and objectives and determines the revenue optimization of a business. Many business giants in the past have been unable to maintain sustained growth. Lack of proper business strategies can be attributed to their downfall.

Why was Blockbuster unable to maintain sustained growth?

2004, a year when Blockbuster was at its peak. They even peaked when the videography transitioned to DVD from VCR. However, with the inception of Netflix, videos on demand became a norm. People started watching movies and live-streaming on their mobile phone devices, personal computers and laptops. As Blockbuster did not adapt to the incoming wave of digitization in videography, they lagged behind business leaders like Netflix. This led to their failure because they did not implement a proper business strategy. Turning down the offer made by the founder of Netflix Reed Hastings was the biggest mistake former CEO of Blockbuster John Antioco committed.

Why do you think Nokia, despite being a market leader, suffered a business collapse?

The market leader in the cell phone in the 1990’s and 2000’s, Nokia was the undisputed leader in the mobile phone segment internationally. However, with the development of internet options other cell phone makers embraced the concept of software as they realized that it would assume more importance than voice. However, Nokia was rigid in its policies and paid no heed to incorporate better software systems in their manufactured mobile phones. They also avoided bettering their hardware system as it might have led to shedding their niche customer base. Therefore the company failed to owe to a lack of proper business strategy.

What led to Pan Am’s business downfall?

The company was considered a business leader. It was the first airline company to introduce jumbo jets and digital reservation systems. However hierarchical mismanagement, the dispute in the regulatory policies and government interference can be pointed out as the primary causes why it failed because of not having a proper business strategy.

Why do you think Eastman Kodak lost out on valuable business despite achieving so much success?

Whenever we hear the name Kodak, we think of excellence in photography cameras. For years, there was no competition to Eastman Kodak’s premium quality cameras and optical devices. However, as the age of modernization and digital development dawned upon, the magic of Kodak vanished. Its corporate management failed to adapt to the needs of digitization. Their business propositions failed to owe to a lack of proper business strategy. Although they ventured into fields of operation like healthcare imaging and memory chips, they were unable to replicate the success they initially enjoyed.

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Also read: Most Effective Ways To Overcome Entrepreneurial Challenges

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