The competition in today’s corporate world is fierce. If a company does not position well, develop in line with trends, strengthen its competencies and competitive advantages, then the competition quickly emerges and takes its place and its profits. Business mistakes are part of everyday’s life. As a result, many corporations can’t carry on anymore.
The 5 biggest business mistakes
Below we are summarizing the selection of 5 biggest business mistakes that shaped the corporate world we live in and business practices.
Biggest business mistakes – merger case of AOL and Time Warner
The corporate merger of AOL and Time Warner in 2001 is a good example of poorly conducted due diligence and post-merger integration. Joining the AOL’s internet audience with Time Warner’s TV audience was a great business idea, that just did not end up as planned. The reason was a big crash in corporate cultures of both companies, which was simply to big challenge for the management to address. A wider reach among shoppers was therefore only a $99 billion myth.
Biggest business mistakes – case of Myspace
MySpace can be recalled as the pioneer of social networking. It was the most widely used platform in the pre-Facebook era. Myspace had the biggest community, but failed to set trends. Facebook, it’s competitor, started as a college thing. By limiting its focus, it managed to reach critical mass faster. Due to the perceived value and significantly better user experience the growth rates of Facebook decided the winner.
Biggest business mistakes – case of Parmalat
Parmalat proved that also the mightiest can fall. The story of once the biggest European diary product producer is the story of a financial corruption. A case where regulatory authorities, auditors, credit rating agencies and banks failed to do their work properly. How serious the situation is was revealed only after the company failed to pay back its first bond obligation. Parmalat’s actual financial debt was fixed at €14.3bn in 2004, 8x the amount the firm had previously admitted to. Today Europeans remember the case as one of the biggest corporate frauds.
Biggest business mistakes – case of RadioShack
RadioShack existed for nearly a century before filing for bankruptcy. The management of the company made several business mistakes forcing it to shut sites at a rate of over two hundred per year, however there’s one obvious error that stands out. The company did not respond to the changing consumer habits and didn’t even attempt to implement any variety of e-commerce. Eventually, poor profit margins on what they could sell coupled with financial debt they couldn’t repay took down what was once the go-to place for electronics.
Biggest business mistakes – case of Sears
Sears, the story of a once successful department store, ended up in a continuous dwindle that seemed impossible to stop. Due to the distressed financial position of the company, they had to shut down more than half of their stores in a very short time period. Over 100.000 jobs have been lost as a result. Human resource and PR departments were not able to handle the change. Employee satisfaction was continuously hitting the bottom low and poorly maintained stores were adding to the already negative image. Sears started facing a more and more intense negative reputation, which was a mystery for the management.
Biggest business mistakes – case of Zellers
Zellers was a Canadian chain of clothing stores. Zellers’ claim to fame was the incredibly low prices and it was the cheapest place to get clothes until Walmart spread further north. The company was focusing on growing the retail locations, instead of improving the core business. The logic, was that if there are more locations there would be more customers. However, it didn’t pan out that way in the end.
Biggest business mistakes – case of Yahoo
Yahoo is a search engine and email service that was worth $125 billion at its peak. The company did not innovate at the level of its emerging competition – Google. Mistake that killed Yahoo expanded so fast that it was hard for the company to keep up. Their market share was dropping quickly.