How the largest companies crashed and how to avoid their mistakes: examples of Nokia, Kodak, Xerox and other business giants

It seems that large companies are so stable that they will never falter or lose their leadership in the industry. It was not there: even for a large-scale promising business, the end may come if you do not adapt to changing conditions in time. We at WGG advertising agency have reviewed the stories of the collapse of the titans of the market, which you can learn from.

For entrepreneurs in the field of small and medium-sized businesses, these stories can serve as a reminder that success requires not only hard work, but also flexibility, strategic planning and readiness for change.

Blockbuster Video is an American multimedia brand and former video rental store chain. Since 1985, it has existed as a family-owned videotape rental store, and later turned into a national chain of stores. In the 90s, Blockbuster already existed internationally, and at its peak, Blockbuster employed 84,300 people and 9,000 stores worldwide.

The inability to adapt to changes in the market led to the fact that Blockbuster was unable to assess the potential of streaming services in time and lost the market, giving it to Netflix, which eventually led to bankruptcy. In 2020, the last working Blockbuster store in Oregon remained.

Kodak was the first company to once lead the photography industry: in 1888, George Eastman released the first Kodak box camera charged with roll-up photographic film. However, despite the temporary leadership, Kodak has not coped with the advent of the digital revolution.

In the 70s, Kodak engineer Steven Sasson invented the first prototype of a digital camera: she took a picture and recorded it on tape, and later a black-and-white image of 100x100 pixels was displayed on a TV. Kodak management did not want to lose profits from film production and did not give the green light to production. This was the key reason for the decline of the company, as the idea was quickly developed by Sony, and later by Canon, Nikon, Panasonic and others.

BlackBerry dominated the smartphone market before the advent of the iPhone. The idea of a smartphone with a qwerty keyboard was successful, and it was popular for quite a long time: it was even associated with Barack Obama, who used Blackberry throughout the election campaign. In addition, Blackberry did good advertising and their smartphone was even released in a gold case with diamonds.

However, the company was unable to adapt to new trends and market needs, which led to a significant reduction in its revenue: for example, Blackberry made the strategically wrong decision not to switch to the touchscreen — and epically lost the iPhone in the race for market leadership.

Yahoo had a chance to acquire Google and Facebook at the beginning of their development, they could merge with eBay, but the company did not take advantage of this.

In the late 90s and early noughties, Yahoo could acquire Google, which was still a startup at that time, for a relatively small amount. However, Yahoo did not see the potential in Google, and refused the deal. Later, realizing the mistake, Yahoo tried to buy Google for a much larger amount, but without success: Google's value was growing and was not going to stop.

A similar situation occurred with Facebook. In 2006, Yahoo was offered to buy the social network for $1 billion. Mark Zuckerberg, the founder of Facebook seriously considered the offer, but negotiations stalled when Yahoo lowered its offer to $850 million due to a drop in its own shares. As a result, the deal never took place, and Facebook continued its path to global dominance in social networks.

Inefficient management and the lack of a clear long-term strategy led to the decline of the company, while competitors developed rapidly, offering innovative products and services.

In the 90s and early noughties, the Finnish company Nokia was at the top of the world of mobile communications. Her phones were valued for their reliability and durability.

But, once the market leader in mobile phones, Nokia was unable to compete with Android and iOS due to its attachment to the outdated Symbian operating system and the late transition to Windows Phone. Although Symbian was the leading smartphone platform at the time, it began to be inferior in functionality and usability to new operating systems such as Apple's iOS and Google's Android. Their more modern and intuitive interface, as well as their openness and flexibility, have attracted a large community of application developers.

Well, when the smartphone market was already divided between iOS and Android, Nokia announced a strategic partnership with Microsoft. But it was too late — and Nokia on Windows Phone could not compete with Android and iOS.

Xerox PARC developed many innovations, including a graphical user interface (GUI), which later became the basis for Apple and Microsoft. But Xerox's corporate culture and structure, focused on copiers, did not facilitate the integration of these innovations into commercially successful products.

Steve Jobs was inspired by Xerox's innovations and subsequently created the first Macintosh, but Xerox itself did not get anything from it. Xerox, although it remained an important player in the office equipment market, missed the opportunity to become a leader in the field of personal computers.

Pan American World Airways — Pan Am — became one of the most recognizable and modern companies in world aviation already in the 30s of the last century. But it faltered in the 70s, unable to withstand the oil crisis: a sharp increase in fuel prices, which was the main item of expenditure, taking into account the use of large aircraft like the Boeing 747, was difficult to withstand.

In an attempt to reduce dependence on international flights, which have ceased to be in high demand, Pan Am has made several major corporate acquisitions, for example, it absorbed National Airlines for $ 437 million. But it did not bring the desired result. Ultimately, unsuccessful decisions against the background of global problems led to the bankruptcy of Pan Am in 1991.

These examples reflect the various reasons why even large and once thriving companies have fallen into decline. You can learn from their example!