I did some readings on the failure stories of many companies which were once very successful and were leading the markets. The summary -
Starting with Nokia - the largest mobile phone manufacturer in the world which started in 1865 as a groundwood pulp mill. It gradually became an industrial conglomerate and, among other things, produced paper products, tyres, footwear, communication cables and consumer electronics. In the early 1990s the company realised that its story had to change and decided to concentrate on the telecommunication business. It gradually sold out a host of its other businesses. The change of story helped the company become the largest mobile phone manufacturer in the world. But the company missed out on the smartphone revolution completely. By the time it changed its story and started concentrating on smart phones, other companies had already moved in and captured the market. A host of smaller companies from Micromax to Karbon Mobiles and many more are giving Nokia a run for its money in the Indian market. Why did this happen? For the simple reason, the company remained attached to its earlier story.
There are other such examples as well. When it came to reliable, trustworthy news, there wasn’t a bigger brand than the British Broadcasting Corporation(BBC). The company did not see the story changing and the rise of 24-hour news channels. CNN grabbed the opportunity and broadcast the Gulf War live into homes.
Sony is another great example. The company changed the entire music business with the launch of the Walkman. But failed to see the story changing and handed over the mp three-player market to the likes of Apple on a platter.
Bharti Beetel, which revolutionised land line phones in India by launching push button phones, failed to see the story changing and remained stuck to selling push-button phones, when more and more consumers were moving to mobile phones. Ironically, its sister company Airtel became the biggest mobile phone company in India. The company has recently started selling mobile phones. Now imagine, during the days when Airtel was a growing company, Bharti could have sold its own mobile phones (under the Beetel brand) to consumers who bought an Airtel connection and thus could have been one of the biggest mobile phone companies in India.
Those who do see the story changing and change their stories accordingly benefit from it. An often-quoted example is that of Nirma and Wheel. The Nirma detergent started selling at Rs 3.50 per kg at a time when Hindustan Lever’s (now Hindustan Unilever) Surf used to sell for around Rs 15 per kg. The low price of Nirma made it accessible to consumers, who till then really couldn’t afford the luxury of washing clothes using a detergent and had to use soap instead. To Hindustan Lever’s credit they did not remain stuck in their past. They realised that the story had to change, and thus went ahead and launched their Nirma killer “Wheel” detergent, which eventually beat the sales of Nirma.
The take away from all these examples, from Surf to Nokia to Sony to Bharti, is simple. At times in the lives of individuals as well as companies the story that had worked previously, needs to be dumped. Story must change with the changing time.
