October is the perfect month to settle down with a warm blanket, a cup of tea, and a good horror story. Business owners may not believe in traditional ghosts and goblins, but chilling list of business mistakes is more than enough to make your hair stand on end! Voluntary liquidation experts Business Rescue Expert reveal all…
A digital disaster
As one of the most well-known camera brands in the world, Kodak has seen it’s fair share of success after more than a century of trading.
Back in the 1970’s, the photography giant controlled a massive 85% of the market share for film and cameras. In 1975, Steven Sasson, a research and development employee was experimenting with a product called a charge-coupled device. He found that if he could translate light into binary code, he could produce a 100,000 pixel image — or 0.01 megapixels as we’d refer to it now. The employee in question essentially built the prototype for digital cameras, creating a device which used a memory card and compressed images.
Traditionalists within the business didn’t exactly welcome the digital takeover, however, and opted to stick to paper and film. As a result, the device was never released out of the real fear that it would jeopardise the brand’s film sales. They eventually made the switch to digital in the late 1990s it was too late, and Kodak had to file for bankruptcy in 2012 as a result. The digital camera line was abandoned, and the brand now keeps its focus on the production of printer cartridges and motion picture film.
It is important for businesses to innovate, but it certainly helps to read up on your competitors to save you from any potential mistakes in the future.
Ousted by the competition
Meerkat was launched back in 2015 and offered a live video streaming app (the first of its kind) operating on Twitter and Facebook. Initially, it was a huge hit with users, as ordinary people and celebrities alike realised that they could live stream on both channels at the same time. However, Facebook and Twitter quickly clocked onto this, and developed their own streaming systems as a result — Facebook Live and Periscope. When they launched they also withdrew Meerkat’s access to their platforms.
Unfortunately, the app was never able to make a recovery after this point. It could have attempted to move towards a new niche, but most of the financial investment had been used up on paying for endorsements from celebrities and other backers, as opposed to targeting it at the actual product.
It’s easy to get excited if your business becomes extremely successful very quickly, but you should always prepare for every eventuality and always have a back up plan in place!
As one of the most famous brands of the past 100 years, Coca-Cola is synonymous with success – but it hasn’t always been this way. Created by inventor John Pemberton in Atlanta, GA, in 1886, the original formula is an intensely guarded secret. When arch-rivals Pepsi made their presence known amongst the coveted teenage audience, Coca-Cola made a bold move to guard its market share from its key competitors. So, the taste was adapted slightly, making Coca-Cola slightly sweeter in order to make it taste closer to Pepsi.
In 1985, Coca Cola released ‘New Coke’. Within days, there was a huge outcry from those loyal to the signature coke taste, with many loyal customers calling for the brand to reverse its decision. Their revised recipe had in fact alienated their traditional demographic, instead focusing on a smaller proportion who had chased for the sweeter alternative. This product was already available, and New Coke was simply a same-but-different choice.
In just three short months, Coca-Cola ditched New Coke and reverted to the original recipe, naming it Coca-Cola classic. huge lesson was learned, and if the course of events was any different then we might not have been as familiar with the powerhouse brand as we are today. Take heed from the old Russian proverb “Trust, but verify” and make sure your market research and development stages are fool proof.
NASA: Lost in space
NASA’s Mars Climate Orbiter was unfortunately lost in space in a disastrous 1999 mission. Engineers didn’t realise that European engineers working on the craft had worked in Imperial measurements and failed to convert them to metric. The internal software was given data which didn’t correspond to the same units so when the system which controlled the thrusters calculated the force required in pounds, another system was telling it that it was in Newtons.
One small mathematical miscalculation caused the whole mission to fail and it was one of the most expensive failures in history. The orbiter cost a staggering $125 million to build, but it taught a remarkably invaluable lesson to all involved: the value of basic communication, and the need to verify even the simplest of protocols — check, and check again!
The infamous Ratner effect
The Ratner effect is one of the most infamous business mistakes ever made. In the 1980s, Ratners Group jewellers was a common sight on high streets across the nation, a family-ran business which spawned into a 900-strong store count during its peak. The Ratner situation is testament to the fact that everything can change in a given moment, and the company’s CEO Gerald Ratner learned this the hard way. A couple of misjudged remarks in front of a room full of journalists and business figures prompted a precipitous drop in revenue, as Mr Ratner lost more than a hundred million pounds in less than a minute after his remarks had proliferated around the room and later to the country.
Ratner labelled his products as ‘total crap’, explaining that this was the reason his company were able to sell the pieces at such a low price point. He added insult to injury, adding that his company sold earrings that were cheaper than a prawn sandwich from Marks and Spencer, but wouldn’t last as long. Journalists picked up on Ratners unfortunately worded rant and the next day his comments were immortalised in print. Ratners share price plunged after the story hit the press, almost 300 stores closed and Ratner resigned as CEO. The family name became a byword for calamity and the company had to undergo a full rebrand. The takeaway from this one is simply to be cautious and think before you speak, as it could land your business and your career in hot water!