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Businesses fail for a variety of reasons. Entrepreneurs and business professionals can learn important lessons from history. By focusing on key business strategies to avoid, irreversible mistakes such as poor financial management, lack of planning for the future, inadequate market research, and branding mistakes, management teams improve their odds for success.
Blockbuster Inc. Failed to Adapt to the New Digital Age
Technology changes constantly, transforming markets quickly. At the height of its glory days, Investopedia reports that Blockbuster employed 84,000 people and operated out of 9000 retail stores as the premier video rental business in the U.S. Blockbuster led the industry offering the largest number of videos and an impressive variety of titles.
Blockbuster missed their opportunity to leverage their famous brand and continue to lead the way into the digital future by offering videos via the Internet. They never entered the popular streaming business that has become the norm for home video viewing. Investopedia reports that this giant’s lack of vision about the future of home entertainment forced Blockbuster to file bankruptcy in 2010.
Enron Failed Due to Financial Mismanagement and Fraudulent Accounting Methods
Once heralded as the most innovative energy company by Fortune magazine, Enron was applauded for their innovation for six years straight before their criminal financial acts became apparent. Operating as a worldwide electricity and natural gas empire, the energy giant employed 20,000 employees during their peak years.
While some creative finance can elevate a company’s financial position, there is a definite line separating fraud from savvy financial management and resourcefulness. Enron ignored the law by purposefully using fraudulent accounting methods for deception. They were found guilty of misrepresenting projections as reality.
Blackberry Suffered From Complacency and Poor Design Features, Failing to Innovate to Keep up With Industry Trends
Like so many failed companies, Blackberry began on top, controlling an impressive 50% of the U.S. smartphone market. While competitors launched a new phone annually featuring new features that consumers wanted, Blackberry failed to change with the times. This lack of innovation in both design and practical usage is blamed for the fall of Blackberry.
One of the most obvious design mistakes was Blackberry’s refusal to adopt touch screen technology that iPhone embraced. By 2016, Blackberry stopped manufacturing.
Polaroid Failed to Anticipate the impact of Digital Cameras.
Polaroid rested on its laurels enjoying enormous success. Like so many famous brands that corner their market niche, this giant that made instant film and cameras a popular must-have family camera. Polaroid’s big mistake was neglecting to continue their R&D activities for future viability in a changing market.
Polaroid enjoyed a long run, from 1937 to 2001 when they ultimately declared bankruptcy. Finally, in 2017, the intellectual property was purchased by the Impossible Project and renamed as Polaroid Originals.
Sears Diversified Itself Beyond Recognition, Ultimately Failing as a Result
During its glory days, the name, Sears, was synonymous with quality home-building products made by DieHard, Kenmore, and Craftsman. Sears catered to male consumers.
During the 1980s, a decision was made to increase sales by also courting female shoppers. An ad campaign named, “The Softer Side of Sears” was launched to attract more women through the sale of clothes and back-to-school purchases.
Sears did not stop with women’s and children’s apparel. They also diversified into insurance, real estate, and investments.
Ultimately, competitors like Target and Home Depot crushed Sears.
Savvy business leaders learn from history. Fatal business mistakes are predictable and avoidable. The mistakes mentioned above offer a guide for anticipating and avoiding the same strategic missteps. For business finance advice, consider consulting with small business accountants in Brisbane.
