Tuesday, 19 January 2016

Reasons why world most popular and biggest businesses fail

All brands are vulnerable. Stories abound of failed popular brands. While it is common for small business to fail; however, history has it that big businesses also fail despite having the most sophisticated equipment and superior technology, unlimited access to finance and abundance human resources.

Many companies never find it to the top. However, those who are privileged failed because of what vijey Govindarajan, a professor of Dartmouth's Tuck school of business grouped into 3 segment.

1.Physical trap
Huge investment in Equipment with the assumption that the equipment will not become obsolete in the nearest future. However, this era of technological advancement could render even the latest technology obsolete. This type of companies will rebuke all chance to adapt to the latest technology even if they have the chance.

2. The psychological trap
Dwelling much on what propelled them to the top. They celebrate the moment and their heroism in an unnecessary manner for a long time.

3.  The strategic trap
When a company focus more on the market of today and fails to anticipate the future. These type of companies never see beyond the present.

The 'Market leader' trap
Many leading brands has achieved their long term goal by becoming the market leader-some has been market leaders for decades. Most of these brands predicted that they will still be market leaders in years.

The feeling that 'we are the market leader' could ruin any business. The result is absence of strategic plan, drive and goal.

The best solution is to learn from century brands like cola cola and Guinness, despite leading their respective market  for decades still invent and reinvent- spending millions on marketing and research and development(R&D).

The Deviation Trap
Organization exist to solve a particular problem. Any deviation from the primary aims could be an end. Some became so market conscious to the extend that they can cross corners to achieve their revenue target. Outsourcing enable companies to contract their none-core business functions.

Many market centered companies has find job outsourcing as a cost saving measures. thus, contracting even their core jobs. Such company could fail in the long term.

The best company maximizes profit while solving problems- It is still highly advisable that if company must outsource, let it be the None core business function. While companies must explore other fronts, it is advisable to stick to its vision.

The Change Trap
Technology is changing production processes and business model. Companies that failed to create an innovative culture are rarely tech ready. They will always be struggling to adapt to change.

The best way to avoid the 'change dilemma' is to create an innovative work environment.

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