The "Success Hangover" Hall of Fame
Once industry titans, the likes of Blackberry, Lehman Brothers, Toys "R" Us, General Motors, and Blockbuster sowed the seeds of their own demise even as their growth escalated.
What happened?
While it takes a great many interconnected reasons to bring an industry titan to its knees, much can be traced to the fact that these companies, in some ways, rested on their laurels. Success becomes a liability when you become so drunk that you take leave of common sense, as demonstrated by the following 3 companies.
Blackberry - The company that changed communication when it gave the world its first smartphone with a miniature keyboard, did not take touchscreen smartphone seriously, until it was too late. Lazaridis' conviction in the superiority of Blackberry's technological prowess led him to underestimate the clout of shifting consumer demands on its strategic partners. Under immense pressure, Blackberry compromised its founding principle of "to build the best product possible, not matter what". A capitulation that cost Blackberry USD100 million. The jury is still out as to whether Blackberry can make a comeback.
General Motors (GM) - In the mid-20th century, GM was the largest automaker in the world, with a dominant market share and a strong reputation for quality and innovation. However, by the 1970s and 1980s, GM began facing challenges as it became perceived as complacent and slow to adapt to changing consumer preferences. GM's focus on larger, fuel-inefficient vehicles during a period of increasing fuel prices and a growing interest in smaller, more fuel-efficient cars hurt the company. Additionally, issues such as quality control problems and a perceived lack of innovation further eroded its market position. In 2009, during the global financial crisis, GM filed for bankruptcy and received a government bailout. Once a symbol of American industrial might, GM is still finding its way to reclaiming its past glory in 2024.
Toys "R" Us - With more than 1,300 stores worldwide in 1990, Toys "R" Us rose to prominence by employing a loss leader pricing strategy, but what it didn't see coming, was Walmart becoming a competitor. And who can compete with Walmart when it comes to competitive pricing? At least not Toys "R" Us. In a race to the bottom, Walmart emerged the leader while Toys "R" Us became ladened with evermore debt, which limited its ability to invest in e-commerce (Amazon reneging on their contract with Toys "R" Us didn't help), and update its stores. In 2018, Toys "R" us filed for bankruptcy and eventually liquidated its assets. Under the new ownership, can the phoenix rise from the ashes? Too early to tell. In the meantime, check out Business Wars' expose on Toys "R" Us here.
Complacency is a silent killer. It can lead you to take your stakeholders for granted, misinterpret market signals, breed a sense of entitlement, miscalculate risks, and underestimate your competitors. Invariably, the result is stagnation and erosion of competitive edge, and the destination is either the ICU or the grave.
What to read next? Try Decoding Excellence: How to Spot a Great Corporate Strategy?
To find out how I can help you and your organisation co-create a Me-Only corporate strategy, click on the button below to connect with me.
What happened?
While it takes a great many interconnected reasons to bring an industry titan to its knees, much can be traced to the fact that these companies, in some ways, rested on their laurels. Success becomes a liability when you become so drunk that you take leave of common sense, as demonstrated by the following 3 companies.
Blackberry - The company that changed communication when it gave the world its first smartphone with a miniature keyboard, did not take touchscreen smartphone seriously, until it was too late. Lazaridis' conviction in the superiority of Blackberry's technological prowess led him to underestimate the clout of shifting consumer demands on its strategic partners. Under immense pressure, Blackberry compromised its founding principle of "to build the best product possible, not matter what". A capitulation that cost Blackberry USD100 million. The jury is still out as to whether Blackberry can make a comeback.
General Motors (GM) - In the mid-20th century, GM was the largest automaker in the world, with a dominant market share and a strong reputation for quality and innovation. However, by the 1970s and 1980s, GM began facing challenges as it became perceived as complacent and slow to adapt to changing consumer preferences. GM's focus on larger, fuel-inefficient vehicles during a period of increasing fuel prices and a growing interest in smaller, more fuel-efficient cars hurt the company. Additionally, issues such as quality control problems and a perceived lack of innovation further eroded its market position. In 2009, during the global financial crisis, GM filed for bankruptcy and received a government bailout. Once a symbol of American industrial might, GM is still finding its way to reclaiming its past glory in 2024.
Toys "R" Us - With more than 1,300 stores worldwide in 1990, Toys "R" Us rose to prominence by employing a loss leader pricing strategy, but what it didn't see coming, was Walmart becoming a competitor. And who can compete with Walmart when it comes to competitive pricing? At least not Toys "R" Us. In a race to the bottom, Walmart emerged the leader while Toys "R" Us became ladened with evermore debt, which limited its ability to invest in e-commerce (Amazon reneging on their contract with Toys "R" Us didn't help), and update its stores. In 2018, Toys "R" us filed for bankruptcy and eventually liquidated its assets. Under the new ownership, can the phoenix rise from the ashes? Too early to tell. In the meantime, check out Business Wars' expose on Toys "R" Us here.
Complacency is a silent killer. It can lead you to take your stakeholders for granted, misinterpret market signals, breed a sense of entitlement, miscalculate risks, and underestimate your competitors. Invariably, the result is stagnation and erosion of competitive edge, and the destination is either the ICU or the grave.
What to read next? Try Decoding Excellence: How to Spot a Great Corporate Strategy?
To find out how I can help you and your organisation co-create a Me-Only corporate strategy, click on the button below to connect with me.