It seems to be everybody’s favorite to talk about Apple, Netflix, Amazon, Wikipedia. The success stories. But how about the companies these new age giants literally killed?
Millennials (may) only hear their names, the elder ones knew them when they were big and famous: Kodak, Nokia, Blockbuster, RadioShack, Britannica.
What happened to them, how and why did they fail in a very short period compared to a life span of a conglomerate? This question is very critical if we want to reach safely to the next decade as a company. By analyzing the situation, we can deduct relevant reasons and avoid them.
Let’s have a look at each of the companies’ situation briefly:
- Major market share holder before digital arrived: 85% market share
- Innovator: Innovated the first digital camera.
Failure point: Lack of understanding the digital shift of their core business. The magnitude of shift was so enormous that it was taking away their core business and converting it to a new business. Kodak failed to understand the magnitude.
The vision of the firm was not set to understand the future, rather to defend its market share. Relevant digital strategy would provide the right insights to the management thus would enable them to go after the completely new business line of digital.
- Number one mobile phone seller until iPhone launch in 2007
Failure point: Suppressed innovation capability through failing to listen to its own talented engineers, thus starting to produce inflexible operating system and low-quality mobile phones.
The firm clearly closed communication channels with its employees. Setting targets for short-term, rather than an insightful mindset throughout the organization. The new age comes with the new digital culture, failing to understand it and failing to build the right culture can take your company down, as it did for many giants of the past decade.
- Number one movie rental retailer across US till the launch of Netflix in 2004.
- 70% of profits coming from charging customers late return fees for DVDs.
Failure points: Blockbuster failed three times and earned the end of the company. First wrong move was to refuse the partnership when Netflix first came to offer it in 2000. Later, they failed second time when they continued to charge its customer the late fee, while the competitor did not charge so. They missed the customer experience point as well. The third failure was at the time when they fired their CEO who was trying to correct the situation, the board just wanted to continue with the old revenue model just at the expense of company’s future.
Customer is now at the center of value proposition like never before. Your digital vision shall not avoid it, and you need to take immediate and intense corrective measures to succeed in the digital age.
- Once an electronic store to go to for everything you need as a gadget.
Failure point: Strategy. RadioShack is hit by many rivals in many areas in digital. The main reason was not having a clear-cut strategy. The company was at best confused and didn’t run after a core business, they tried to sell phones, own branded computers, batteries, audio, video and never mastered in any of them. So the customer and even their own employees were confused. This led to deterioration of customer attention and thus revenues.
Clear-cut strategy brings you to top, in our age digital strategy helps you to stay there or even better disrupt competition.
- Before digital, the major reference set of books. A successful company.
Failure point: Sometimes the end just comes. The economies of the industry changes and you just cannot do anything. You can try and act on it, but it might be already late. The reference lookup was just changed with Google Search, with Wikipedia, the game was over.
Awareness of future insights, positioning your company in the right place in the new age of economics is vital, digital discovery is the right action to take and set your priorities and initiatives, sometimes at the level of changing your business line.
As seen from above examples, the new age of business is not easy, business was not easy before as well, but it was not at this level of toughness. Digital demolishes entry barriers, moves at the speed of light, comes with a marginal cost of zero for scalability. Digital is where you need to be, it is a super-high-speed train, once missed, never can be caught…
Digitopia provides services from vision, strategy to execution to cultural transformation. Don’t be late, let’s ride together.