Major businesses that shot themselves in the foot
Take note businesses of Australia, you too can come unstuck if you don’t keep your eyes on the road.
Take heed and read some cautionary tales of some once-great businesses that really landed on their knees when they failed to see the writing on the wall.
They were once the undisputed kings of photography and film. But man, did these guys ever stuff up.
Not only did Kodak miss the digital camera revolution – they actually started it – then purposefully avoided taking part…. Say what?
You see, back in ’75, Kodak engineer Steve Sasson actually invented the digital camera. They had it right there in the bag – the disruption of film photography and the next generation of image capture and storage.
But Kodak’s management had zero clue what they had.
“Kodak had the patents and a head start, but ignored all that.” – Peter Diamandis
Worse, they thought it was something to keep quite about for fear of killing the film aspect of their own business. They basically said “That’s cute Steve, but keep it quiet or you’ll ruin our business”.
Ironically, by burying the tech and becoming fearful of losing old film revenue, they signed their own death warrant. You can’t say they didn’t have every chance.
So maybe if you find yourself discovering your own disruption, just roll with it instead of attempting to bury it. Embrace the future or someone else will.
2) Toys ‘R’ Us
Here we have another very cautionary tale which blares warnings about lacking in vision, failing to spot a massive innovation potential, and actively sabotaging your own success out of fear.
Toy’s ‘R’ Us dominated the toy retail market for many years, getting its start selling baby merchandise to the burgeoning ‘baby boom’ after WW2. The store evolved to toys only and in 1957 the business as we know it adopted the infamous name and ruled the toy market for decades by becoming a ‘supermarket for toys’.
At its height, in the 90’s, they were worth some $12 billion and had cornered 25% of the world’s toy market with 1450 locations. Too big to fail? Nope – they just failed to innovate.
They met their end through a failure to understand the upcoming online retail environment back in 2005 when they struck a disastrous deal with Amazon.
What happened? Well, the deal with Amazon was intended to position Toy’s ‘R’ Us as the sole toy supplier to the online platform, essentially giving Toy’s ‘R’ Us an avenue to sell toys online as an exclusive Amazon partner. They chose this route instead of pioneering their own online retail solution and maintaining control over their operations.
“They outsourced their e-commerce business to Amazon early on in an extraordinarily foolish deal that gave Amazon tremendous insight into customers and customer behaviour, and it gave [Toys R Us] basically nothing,” – Mark Cohen
Eventually Amazon reneged on the deal after learning valuable lessons, no longer allowing Toy’s ‘R’ Us exclusivity. Toy’s ‘R’ Us sued them of course but the damage had been done – It was too late to invest in their own online platform, their opportunity was missed and the toy giant finally popped and went bankrupt in 2017.
Poor Blockbuster video. Many of us still remember how it used to be, yet it’s still hard to grasp just how important Blockbuster was to the family home, sharehouse and bachelor pad. Weekends, sick days and wintry nights were spent nipping down to the rental store, getting a few copies of Groundhog Day, paying your massive late bill and ducking home to rack up another one.
“Have you returned the movies?” echoed throughout the living rooms of the world for years.
Then it all came crashing down around their ears and they really only had themselves to blame. At first Blockbuster started getting surpassed by mail rental services like Netflix, who had an innovative subscription model. Then they were surpassed by internet streaming services like… Netflix.
Hmm if only they had the chance to partner with or perhaps buy out Netflix and re-capture the market for themselves. Whats that? Oh they totally did.
Blockbuster passed on partnering with Netflix in the early 2000’s.
Not only did they pass, they did not even see the value in the mail order and then streaming services until it was too late. They eventually saw the writing on the wall far too late tried to enter the market with Blockbuster Online. No guesses how well that went.
So not only did they not see the next two phases of market evolution, they declined to be a part of it when handed a second chance. Ooph.
With Blockbuster now long bankrupt, there is but one Blockbuster store left in the universe – get thee down to the town of Bend in Oregon if you need a nostalgia fix and maybe want to pay some late fees.