Lots of mistakes are made in business that will continue to be made everyday.
Below is a glimpse at 6 business failures you can learn from over the last decade:
- Faulty Economics – Pets.com began in 1998 selling online pet supplies to consumers. Sales rapidly grew due to the exposure the company received by its involvement in the Macy’s Thanksgiving Parade, Super Bowl commercials and its “Sock Puppet” ad campaign. The company raised over $300 million and ceased operations in November 2000 after being listed on the NASDAQ for 298 days. $300 million vanished in that short amount of time…
- Faulty Strategy – Webvan was founded in 1998 as a credit and delivery business for Groceries. The company was bankrupt by 2000 leaving behind $830 million in debt in just 18 months. The company over expanded too aggressively with a very complicated model for grocery shopping. Webvan far over estimated the customer’s willingness to leave the traditional grocery stores in favor of an online experience. Not one of Webvan’s founders or senior managers ever worked in the grocery industry…
- Failure to Grasp Consumer Change – Tower Records operated retail music stores from 1960 until 2006 when it filed for bankruptcy. At its height, the company operated 89 stores in the US and 114 international stores. In addition to music, the company sold DVDs, video games, accessories, toys and electronic gadgets like mp3 players. Here was a company poised to dominate the online music transition. Instead, they continued to focus on retail while the customers migrated to MP3′s and the iPod, which debuted in 2001…
- Failure to Update the Business Strategy – Circuit City traced its roots in consumer electronics and appliances to 1949 concluding with its liquidation in 2010. It pioneered the mail order electronics business in the 1960′s, the Warehouse concept in the 1970′s and the Superstore concept in the 1980′s. By the mid 1990′s and 2000′s, the company had lost ability to innovate and ran tired stores. The company was operating under an outdated compensation model for its sale’s people that provided little value to the consumer and increased product costs…
- Complacency – Ritz Camera operated 137 photo retail and photofinishing stores in the U.S. under multiple banners. The company traced its roots back to 1918 and the third generation of the family became quite unfocused on the business and complacent that the business could just run on autopilot…
- Giving Your Customer’s to Your Competitors – Borders was founded in 1971 in Ann Arbor Michigan and at its peak operated 511 Borders Books and another 175 Waldenbooks. We can analyze the several mis-steps Borders had throughout the 1990′s and early 2000′s. The failure to embrace e-books was certainly one. A large investment in slow moving CD’s and DVD’s hurt cash flow…
Instead of continuing to make these mistakes on your own and dealing with the consequences, simply don't make them. By adjusting to and monitoring the ever changing needs of your customers, you can start to foresee what they will expect in the future. This will give you an edge when creating a sound economic model to follow to ensure lasting success.
What other examples can you provide on business failures we can learn from, over the last decade?
Article Source: Franchise Money Maker
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