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It’s crazy to think that 88% of the Fortune 500 firms that existed in 1955 are gone. It’s not a small number, what went wrong at this scale? To be safe! The Innovation Happened.
Today I would like to share with you a few of the mega brands of the 20th century which don’t exist now.
Company 1; BLOCKBUSTER (1985 – 2010)
Blockbuster was a provider of home movie and video game rental services.
At its peak in 2004, Blockbuster had 9,000 stores globally, according to Business Insider, and it earned $5.9 billion in revenue.
Well, it was said that the main reason for the bankruptcy is the wrong strategic decisions like denying Netflix a $50 million offer to purchase.
And due to huge debt in 2007-08, they had no money to invest and switch to the video streaming business, As Netflix did and dominate the market.
Well, the reason might be any but in the end, the delay in timely shifting to the video streaming business made Blockbuster end up with 1 store left in Bend, Oregon.
Now Netflix, Amazon, and Disney Hotstar are some of the new competitors competing in the video streaming segment.
Company 2; TOYS R US (1948 – 2017)
Toys R Us was a toy, clothing, and baby product retailer.
At its peak in the 1990s, Toys R Us had 1,400 stores, controlling 25 percent of the global toy market. In the year 2000 company signed 10 years agreement with Amazon to become an exclusive toy vendor.
But later realized that some items were not part of the deal like video games, collectible toys, children’s books, videos, and music. It ended up losing lots of money in the deal and in the litigation process also.
Later in 2009, Toys R Us purchased toys.com and etoys.com but it was already too late to catch Amazon and Walmart online.
Company 3; TOWER RECORDS (1960 – 2004)
Tower sales hit $1 billion in 1999, but it was right around then that everything seemed to go south. What lead to the downfall of the business is the decision to stop selling music singles to force customers to buy the full albums.
And this is the time when a customer needs led to the birth of online music pirating, and Napster where users can swap the files with each other for free.
And Steve Jobs put the last nail in the Towers’ coffin, The iPods & iTunes. Now customers can download any singles for as low as .99 cents with iTunes and store all MP3 music on iPods.
Company 4; GENERAL MOTORS (1908 – 2009)
Though you can see General Motors is still operation, it was sold in 2009 after a major bailout from the US government. It is now operated with new venture GM( new GM) which purchased the majority of GM stakes in 2009.
In May 2009, the valuation dipped down to $ 457.2 million only from a whopping $ 11 billion in 2008.
According to one article from HBR, there are a few reasons for this huge failure, and the one which is prominent among all is they stopped making a profit as they don’t have what customers wanted to buy.
GM was too slow in innovation and coming up with new technology due to its huge organizational size.
The fall of the “Old GM” company never adopted the new technologies not even in the latter stages. Such technologies ensured the organization was able to produce customers with more satisfying products, such as the luxurious and comfortable seats that other competitors fitted in personalized cars. It could be due to their slow innovation and due to their huge organizational size.
Company 5; KODAK (1889-2012)
At its peak in 1997 had a stock-market value of nearly $30 billion and shrunk to $145M or less in the year 2012.
Well, it’s surprising that the inventor of the digital camera, Steven Sasson was the electrical engineer at Kodak when he developed the technology. But he was totally ignored by the Kodak officials.
The Paper and film business was so profitable at that time that the company even ignored the competitor, Fujifilm. Even when digital cameras become popular Kodak argued that digital images cannot replace the feel of actual printed images. It’s sad that they have wasted 10 years in this process, and then it became too late.
Kodak filed the bankruptcy in January 2012.
Don’t ignore the upcoming technologies.
There are many more examples of other big brands also which sold their services like crazy at some time and are now totally gone. Truly, business innovation is a really important aspect of any business.
Also, it also shows how much you should care about your customer’s needs. Keep a regular eye on competitors, not only existing businesses but also the new competitors and technologies which may disrupt the whole industry.
And History shows it to us, it’s not just fact but the reality of nature. Evolutionary products are the true winner.
Thank you…What’s your take on these companies?
I am covering topics on productivity and how businesses can make an impact. Do suggest to me the topics you would like to hear from me.
Ravindra Negi
Founder, VDomin8
vdomin8.com
