FAILED TO INNOVATE
CHANGE IS INEVITABLE IN ALL INDUSTRY . KEEP A CONSTANT WATCH ON What Customers Want !
As an entrepreneur, the recent news about Thomas Cook was shocking for me ! Couple of questions came to my mind was 1. Why big companies fail ! 2. What are all the lessons everyone has to learn (even from history) !. In that research I came across couple of case studies and i think it will be helpful for others too. (Its only a brief)
The business landscape is littered with cautionary tales of huge companies that failed due to lack of innovation. An unwillingness to innovate puts any company at risk of failure, but refusing to evolve with the market can be even more devastating.
The very recent example was Thomas Cook, One of the world's best-known holiday brands, the business was founded in 1841 in Leicestershire by cabinet-maker Thomas Cook. The fledgling company organised railway outings for members of the local temperance movement.
Some 178 years later, it had grown to a huge global travel group, with annual sales of ￡9bn, 19 million customers a year and 22,000 staff operating in 16 countries.
What went wrong!
- The travel world had progressed from temperance day trips, so the modern business and leisure market was also changing, and at a far faster pace than in previous decades.
- Other Factors like financial, social and even meteorological also affected
- As well as weather issues, and stiff competition from online travel agents and low-cost airlines, there were other disruptive factors, including political unrest around the world.
- Also many holidaymakers had become used to putting together their own holidays and not using travel agents.
And Mainly as per the travel expert Simon Calder said Thomas Cook "wasn't ready for the 21st Century". He said: "It was using a model that was great for the second half of the 20th Century where people would obediently go into their local travel agency and book a package holiday. "Now everybody can pretend they are a travel agent. They've got access to all the airline seats, hotel beds, car rentals in the world and they can put things together themselves.
"Thomas Cook simply wasn't differentiating enough."
Some of the other giants which failed due to lack of innovation and change..
Kodak, a technology company that dominated the photographic film market during most of the 20th century. The company blew its chance to lead the digital photography revolution as they were in denial for too long.
Steve Sasson, the Kodak engineer, actually invented the first digital camera back in 1975. “But it was filmless photography, so management’s reaction was, ‘that’s cute—but don’t tell anyone about it,” says Sasson. The leaders of Kodak failed to see digital photography as a disruptive technology.
A former vice-president of Kodak Don Strickland says: “We developed the world’s first consumer digital camera but we could not get approval to launch or sell it because of fear of the effects on the film market.” The management was so focused on the film success that they missed the digital revolution after starting it. Kodak filed for bankruptcy in 2012. The Kodak failure surprised many.
NOKIA
One highly successful company that failed? Nokia, a company founded in Finland was the first to create a cellular network in the world. In the late 1990s and early 2000s, Nokia was the global leader in mobile phones.
With the arrival of the Internet, other mobile companies started understanding how data, not voice, was the future of communication. Nokia didn’t grasp the concept of software and kept focusing on hardware because the management feared to alienate current users if they changed too much.
XEROX
Xerox was actually first to invent the PC and their product was way ahead of its time. Unfortunately, the management thought going digital would be too expensive and they never bothered to exploit the opportunities they had.
The CEO David Kearns was convinced that the future of Xerox was in copy machines. The digital communication products invented weren’t seen as something that could replace black marks on white paper. Xerox failed to understand that you can’t keep perpetually making money on the same technology. Sometimes technology fails too.
BLOCKBUSTER
The video-rental company was at its peak in 2004. They survived the change from VHS to DVD but failed to innovate into a market that allowed for delivery (much less streaming).
While Netflix was shipping out DVD’s to their consumer’s homes, Blockbuster figured their physical stores were enough to please their customers. Because they had been the leader of the movie rental market for years, management didn’t see why they should change their strategy.
YAHOO
In 2005 Yahoo was one of the main players in the online advertising market. But because Yahoo undervalued the importance of search, the company decided to focus more on becoming a media giant.
Yahoo also missed out on a lot of opportunities that could have saved them. For example, in 2002 they almost had a deal to buy Google, but the CEO of Yahoo refused to go through with the deal. And in 2006 Yahoo had a deal to buy Facebook, but when Yahoo lowered their offer, Mark Zuckerberg backed out. If the company had taken a few additional risks, maybe we would all be yahooing right now instead of googling.
HITACHI
Japanese brand Hitachi used to be an electronic giant together with Sony, Panasonic, and Sharp. It was one of those brands that you’d spot in almost every household. Now the company is losing billions of dollars a year. The reason? The digital revolution.
MOTOROLA
Motorola demonstrated the first handheld phone in 1973.
Clearly lacking market knowledge, Motorola’s new products in the early 2000s weren’t enough to grow the business. The products weren’t user-friendly and Motorola completely missed the movement to 3G. Essentially, Motorola didn’t implement 21st-century communication to its products, making it hard to compete with smartphones on the market. On August 2011 Motorola was acquired by Google.
Note, A shift in paradigm calls for a shift in strategy to keep up and Don’t lost sight of the Most Important Thing (your customer) for the Next Big Thing(technology).
“Without a robust and resilient innovation strategy, no company can survive,” says Phil McKinney CEO of CableLabs.