Dumbest ways companies have failed to predict the future or made decisions that bankrupted them! Whatever happened to Blockbuster and Borders? Find out on this countdown of epic business blunders!
#9. “Kodak”- The Eastman Kodak Company was founded in 1888 and was the most successful company in the photography industry during the 20th Century. They were the leaders in bringing the cutting edge of photographic technology and easy to use cameras to the hands of consumers throughout the world. But Kodak almost met its demise at the hands of a product that it actually invented: digital photography. Kodak invented this technology in 1975, but failed to jump on the innovation, believing that common applications for it were well into the future. Early on, the company thought that the high cost and complexity that would be needed to make a push into the digital front weren’t in Kodak’s best interests. So, Kodak put digital photography to the side to be picked back up when the time was financially advantageous, but they waited too long. By the time they switched gears, they faced competitors who had been perfecting their business models with digital photography at the center, whereas Kodak’s model was still dependent on printed photos. While other companies made deals with websites, phone companies and focused on online based imaging, Kodak floundered and in 2012 filed for Bankruptcy. They have since come back from bankruptcy and started specializing in producing smartphones and tablets.
#8. “Pan American”- From 1927 until 1991, Pan Am was the largest airline company in the United States, but due to bad foresight, callous labor practices and an uncontrollable disaster this global giant quickly met its end. The company basically had a monopoly on overseas travel until World War II but was dealt its first major blow when other strong airline companies began to up their game. Pan Am fought off the competitors with its innovations such as jumbo jets and an advanced system for making reservations but these innovations couldn’t match the corporate aptitude and human relations that the other airlines dealt with more astutely. One of the main reasons for Pan Am’s failure was ironically due to its early successes. Because of the sheer size of its fleet, it was the company hit the hardest by the 1973 oil crisis. Just before the crisis, Pan Am had just purchased a number of brand new gas-guzzling Boeing 747s and was forced to dramatically raise ticket prices to recuperate. As it was trying to recover from this setback it had also become a target of terrorism in the Middle East. To the terrorists Pan Am was a symbol of the United States overseas because it was the largest U.S. airline servicing the area. During the Gulf War, in the midst of financial hardships and battles with labor unions, Pan American 103 on a transatlantic flight from Frankfurt, Germany to Detroit was blown up by Libyan nationals above the Scottish town of Lockerbie. The incident scared even more customers away from flying Pan Am and many travel agents would no longer book flights on their planes. All of these events and poor managing of them led Pan American International Airways to declare bankruptcy and completely fold in 1991.
#7. “Borders”- Tom and Louis Borders opened their first bookstore in 1971. Their vast selection of books and innovative inventory system turned them into the second biggest chain of book megastores. Due to years of miscalculating the future of book consumption, the bookstore all but vanished in 2011. It all started in the mid 90s when Amazon and other online stores hit the scene. Instead of developing their own website and focusing on online sales, the company decided to further their storefront endeavors and expanded into Europe and Asia opening hundreds of stores. Their competitor Barnes and Noble, did the opposite by preparing for the digital age, perfecting their online sales system and focusing on their storefront operations in the United States. When Borders did start to catch on to the online market they were already far behind and decided to use Amazon as a host for such sales. Because of this, as more and more sales were made online, instead of receiving 100% of the profit they had to share with Amazon. Borders also was caught in the past by devoting lots of money and inventory towards DVDs and CDs at a time when digital music and video was on the rise. While Barnes and Noble developed it’s own e-reader to grab paperless book market by the horns, Borders was extremely slow to adapt to the change. All of these factors came to a boiling point in 2006 when, after several years of losing millions of dollars Borders filed for bankruptcy. By 2011, Borders realized there was no way out and closed most of its remaining stores. The only stores remaining are in southeast asia where it remain Borders in name only, as they were sold to a company named Popular Holdings.