10 Companies That Failed To Innovate, Resulting In Business Failure | Collective Campus (2023)

It’s crazy to think that 88% of the Fortune 500 firms that existed in 1955 are gone. These companies have either gone bankrupt, merged, or still exist but have fallen from the top Fortune 500 companies. Most of the companies on the list in 1955 are unrecognizable, forgotten companies today. As the life expectancies of companies continue to shrink, organisations must be more vigilant than ever in remaining innovative and future-proofing their businesses.

Here are 10 famous companies that failed to innovate, resulting in business failure.

1. Blockbuster (1985 – 2010)

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Home movie and video game rental services giant, Blockbuster Video, was founded in 1985 and arguably one of the most iconic brands in the video rental space. At its peak in 2004, Blockbuster employed 84,300 people worldwide and had 9,094 stores. Unable to transition towards a digital model, Blockbuster filed for bankruptcy in 2010.

In 2000, Netflix approached Blockbuster with an offer to sell their company to Blockbuster for US$50 million. The Blockbuster CEO, was not interested in the offer because he thought it was a "very small niche business" and it was losing money at the time. As of July 2017, Netflix had 103.95 million subscribers worldwide and a revenue of US$8.8bn.

2. Polaroid (1937 – 2001)

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Founded in 1937, Polaroid is best known for its Polaroid instant film and cameras. Despite its early success in capturing a market that had few competitors, Polaroid was unable to anticipate the impact that digital cameras would have on its film business. Falling into the ‘success trap’ by exploiting only their (historically successful) business activities, Polaroid neglected the need to explore new territory and enhance their long-term viability.

The original Polaroid Corporation was declared bankrupt in 2001 and its brand and assets were sold off. In May 2017, the brand and intellectual property of the Polaroid corporation was acquired by the largest shareholder of the Impossible Project, which had originally started out in 2008 by producing new instant films for Polaroid cameras Impossible Project was renamed Polaroid Originals in September 2017.

3.Toys R Us (1948 – 2017)

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Toys “R” Us is a more recent story about the financial struggle one of the world’s largest toy store chains. With the benefit of hindsight, Toys "R" Us may have led to its own undoing when it signed a 10-year contract to be the exclusive vendor of toys on Amazon in 2000. Amazon began to allow other toy vendors to sell on its site in spite of the deal, and Toys "R" Us sued Amazon to end the agreement in 2004. As a result, Toys "R" Us missed the opportunity to develop its own e-commerce presence early on. Far too late, Toys “R” Us announced in May 2017 its plan to revamp its website as part of a $100 million, three-year investment to jump-start its e-commerce business.

While filing for bankruptcy in September 2017 under pressure from its debt of US$1bn and fierce online retail competition, it has continued to keep its physical stores open.

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4. Pan Am (1927 – 1991)

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Pan American World Airways (aka Pan Am), founded in 1927, was the largest international air carrier in the United States. The company was known as an industry innovator and was the first airline to offer computerised reservation systems and jumbo jets.

The downfall of Pan Am is attributed to was a combination of corporate mismanagement, government indifference to protecting its prime international carrier, and flawed regulatory policy. By over-investing in its existing business model and not investing in future, horizon 3, innovations, Pan Am filed for bankruptcy in 1991. Pan Am is survived only in pop culture through its iconic blue logo, which continues to be printed on purses and T-shirts and as the subject of a TV show on ABC starring Christina Ricci.

(Video) 15 BIGGEST Business MISTAKES In History

5. Borders (1971 – 2011)

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Borders was an international book and music retailer, founded by two entrepreneurial brothers while at university. With locations all around the world but mounting debt, Border was unable to transition to the new business environment of digital and online books. Its missteps included holding too much debt, opening too many stores as well as jumping into the e-reader business to late.

Sadly, Borders closed all of its retail locations and sold off its customer loyalty list, comprising millions of names, to competitor Barnes & Noble for US$13.9 million. Borders' locations have since been purchased and repurposed by other large retailers.

6. Pets[dot]com (1998 – 2000)

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Pets.com was an online business that sold pet accessories and supplies direct to consumers over the World Wide Web. Although short-lived, Pets.com managed to find some success during a time when there were no plug and play solutions for ecommerce/warehouse management and customer service that could scale. Pets.com launched in August 1998 and went from an IPO on the Nasdaq stock exchange to liquidation in 268 days.

Its high public profile during its brief existence made it one of the more noteworthy failures of the dot-com bubble of the early 2000s. US$300 million of investment capital vanished with the company's failure. Pets.com is a memorable cautionary tale of a high-profile marketing campaign coupled with weak fundamentals (and poor timing). Today, the Pets.com URL redirects users to PetSmart's website.

7. Tower Records (1960 – 2004)

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(Video) 5 Companies That Grew Rapidly (Then Failed Rapidly)

A pioneer in its time, Tower Records was the first to create the concept of the retail music mega-store. Founded by Russell Solomon in 1960, Tower Records sold CDs, cassette tapes, DVDs, electronic gadgets, video games, accessories and toys. Ahead of its time for a fleeting moment, Tower.com launched in 1995, making it one of the first retailers to move online. It seems the company’s foresights stopped short there as it fell prey excessive debts and ultimately bankruptcy in 2004. Tower Records could not keep up with digital disruptions such as music piracy, iTunes and streaming businesses such as Spotify and Pandora. Its legacy is remembered in the form of the movie 'Empire Records,' which was written by a former Tower Records employee.

8. Compaq (1982 – 2002)

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Compaq was one of the largest sellers of PCs in the entire world in the 1980s and 1990s. The company produced some of the first IBM PC compatible computers, being the first company to legally reverse engineer the IBM Personal Computer. Compaq ultimately struggled to keep up in the price wars against Dell and was acquired for US$25 billion by HP in 2002. The Compaq brand remained in use by HP for lower-end systems until 2013 when it was discontinued.

9. General Motors (1908 – 2009)

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After being one of the most important car manufacturers for more than 100 years, and one of the largest companies in the world, General Motors also resulted in one of history’s largest bankruptcies. Failure to innovate and blatantly ignoring competition were key to the company’s demise. As GM focused predominantly on profiting from finance, the business neglected to improve the quality of its product, failed to adapt GM to changes in customer needs and did not invest in new technologies. Through a major bailout from the US government, the current company, General Motors Company ("new GM"), was formed in 2009 and purchased the majority of the assets of the old GM, including the brand "General Motors".

10. Kodak (1889-2012)‘

10 Companies That Failed To Innovate, Resulting In Business Failure | Collective Campus (10)

At one time the world’s biggest film company, Kodak could not keep up with the digital revolution, for fear of cannibalizing its strongest product lines. The leader of design, production and marketing of photographic equipment had a number of opportunities to steer the company in the right direction but its hesitation to fully embrace the transition to digital led to its demise. For example, Kodak invested billions of dollars into developing technology for taking pictures using mobile phones and other digital devices. However, it held back from developing digital cameras for the mass market for fear of eradicating its all-important film business. Competitors, such as the Japanese firm Canon, grasped this opportunity and has consequently outlived the giant. Another example is Kodak’s acquisition of a photo sharing site called Ofoto in 2001. However, instead of pioneering what might have been a predecessor of Instagram, Kodak used Ofoto to try to get more people to print digital images. Kodak filed for bankruptcy in 2012 and after exiting most of its product streams, re-emerged in 2013 as a much smaller, consolidated company focused on serving commercial customers.

Frances Goh

Frances is the General Manager of Innovation and Strategy at Collective Campus. She is an innovation consultant, brand strategist and customer champion.

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FAQs

What are the 10 possible reasons for business failure? ›

The top 10 reasons small businesses fail – and how to avoid them
  • Lack of research. ...
  • Not having a business plan. ...
  • Not having the business funding they need. ...
  • Financial mismanagement. ...
  • Poor marketing. ...
  • Not keeping abreast of customer needs or the competition. ...
  • Failing to adapt. ...
  • Growing too quickly.
6 Jul 2021

What happens to companies that don't innovate? ›

Without innovation there is therefore no learning, no progress and nothing ever changes. When you translate this into a business, over time that business will stagnate, lose its competitive edge and eventually fail. This then has a negative impact on the local economy and on society.

What is a company that failed because they did not adapt? ›

But Kodak failed to adapt to advances in technology following the invention of the digital camera in 1975.

What are the top 10 brands that failed badly in India and why? ›

5. Which are the brands that failed in India because of poor marketing?
  • Timberland.
  • Chevrolet.
  • Kingfisher.
  • Bisleri Pop.
  • Danone Dairy products.
  • Taxi4Sure.
23 Mar 2022

What are three famous failures? ›

Albert Einstein had the label "mentally slow" put on his permanent school record. Henry Ford's first two automobile companies failed. Oprah Winfrey was fired from an early job as a television news anchor. Jerry Seinfeld was booed off stage in his first stand-up comedy appearance.

What are the top 10 reasons of project failure? ›

10 Reasons Projects Fail
  • 1) The Poorly Understood Business Case. ...
  • 2) Unsupported Project Management Culture. ...
  • 3) Scope Creep. ...
  • 4) Lack of Effective Leadership. ...
  • 5) The Accidental Project Manager. ...
  • 6) Poor Monitoring & Controls. ...
  • 7) Unreliable Estimates. ...
  • 8) No Risk Management.
1 Jun 2022

What is a business failure example? ›

For example, a company invests a lot of money in new technology but fails to generate revenue from it. This type of business failure often occurs in innovative businesses such as tech or medical companies.

Why do big companies fail to innovate? ›

One of the problems which bigger companies have when considering innovation is the simple fact that they have much more to lose. A company which has spent many years developing a particular brand may hesitate to take a risk — a new product or service for example — which could damage that brand if it goes wrong.

Why do most companies fail at innovation? ›

One of the most common reasons of Innovation failing is due to lack of budget or money invested in innovative approaches. If an innovation project isn't being supported with the right money to gather teams, brainstorm ideas, build a prototype, quality testing etc then it will lose momentum towards completion.

Why some companies do not innovate? ›

Put more politely, companies fail to innovate because their business models, organizational structures and leadership teams find it “difficult” to adjust to new ways of thinking and doing. The fear is driven by uncertainty.

Why did Nokia and Kodak fail? ›

BRANDS WHICH FAILED DUE TO MARKETING MYOPIA

There are several brands which failed to sustain in the market because of Marketing Myopia and some of the renowned brands are Nokia, Kodak, HMT, SONY WALKMAN, etc.

Which is the famous failed startup? ›

1) Dazo. Dazo was a food-tech startup based in Bangalore which emerged as a “food on demand” company. Fierce competition and lack of funding led to Dazo's failure. You can read more about their failure here.

What businesses have recently failed? ›

  • Blockbuster. Profile: Blockbuster is a former provider of movies and video game rental services. ...
  • Enron. Profile: Enron was an American energy, commodities, and service company which was founded after the merger of Houston Natural Gas and InterNorth. ...
  • Blackberry. ...
  • Kodak. ...
  • Sears. ...
  • Pan-Am. ...
  • MySpace. ...
  • Yahoo.

Which company was failure in India? ›

Bisleri Pop

Apart from mineral water, Bisleri had introduced other beverages like Pina Colada, Fonzo, Spice, and Limonata. These products did not appeal to the customers and Bisleri withdrew them from the Indian market.

Why did eBay fail in India? ›

“Indian consumers care for upfront prices and discounts and the auction mechanism online was cumbersome and took days to materialise. You can't build volumes in such cases when the payment mechanism online was also not evolved.” He said eBay lacked aggression and innovation for the Indian market.

What companies almost failed? ›

Successful Companies That Were Almost Failed Startups
  • Reddit. Entertainment, social networking, and news website Reddit have 430 million unique users. ...
  • The Muse. ...
  • Airbnb. ...
  • Instacart. ...
  • GoDaddy. ...
  • Marie Forleo. ...
  • Uber.
1 Jul 2022

What is the best answer for biggest failure? ›

Choose a specific failure

Pick a real failure that happened in the workplace, specifically a failure related to the work you're doing now. Look for a story where something didn't go as planned. Choosing the right story is important, as you want to explain a situation where only one thing went wrong.

What is a good example of failure? ›

Failing an assignment. Not getting a job. Not getting into a club or making a team. Losing a customer.

What is an example of a failed project? ›

Sony Betamax. Sony launched its cassette recording device known as Betamax in the mid-1970s. It lost the battle for market share to JVC's VHS technology, but Sony didn't stop making Betamax tapes until 2016. In the age of online streaming, very few us realized it was still in production.

Which do you think is the top 3 Reasons Why do IT projects fail? ›

Here's a look at some of the causes of project failure and how you can avoid them.
  • Lack of resource planning. We plan timelines. ...
  • Unclear Goals and Objectives. ...
  • Lack of project visibility. ...
  • Communication gaps. ...
  • Scope creep. ...
  • Unrealistic expectations.

What are 7 reasons businesses fail? ›

Top seven reasons businesses fail
  • Failure to plan before startup. ...
  • Failure to monitor financial position. ...
  • Failure to know the difference between price, value and cost. ...
  • Failure to manage cash flow. ...
  • Failure to manage growth. ...
  • Failure to borrow properly. ...
  • Failure in business transition.

Why do businesses fail and give an example? ›

The most common reasons small businesses fail include a lack of capital or funding, retaining an inadequate management team, a faulty infrastructure or business model, and unsuccessful marketing initiatives.

What are the top 10 most successful small businesses? ›

Check out this list of the most profitable small businesses.
  1. Business Consulting. If you're an expert in your industry and have been working at it for years, you should consider consulting. ...
  2. IT Support, Technology Consulting, and Repair. ...
  3. Cleaning Services. ...
  4. Accounting and Tax Preparation. ...
  5. Auto Repair. ...
  6. Real Estate.

What are top 10 businesses? ›

Top 10 Best and the Most Profitable Businesses in India
  1. Food and Beverage Business- A Business Related to Hospitality Industry. ...
  2. Organic Farming. ...
  3. Travel Agency or Business related to Tourism Industry. ...
  4. Pharmaceutical Business. ...
  5. Website Designing- A Living Dream for all the Tech Enthusiasts. ...
  6. Real Estate Business.

What are the top 3 things which will lead the company to failure? ›

Five Common Causes of Business Failure
  • Poor cash flow management. ...
  • Losing control of the finances. ...
  • Bad planning and a lack of strategy. ...
  • Weak leadership. ...
  • Overdependence on a few big customers.

Why companies lose their best innovators? ›

They fail to recognize and support the innovators

First, they are not likely to be “flashy” people who dominate meetings and are able to discuss business strategy with ease. Instead, the true innovators are the ones who are grounded, disciplined, intrinsically motivated and good collaborators.

What were some failed products? ›

Below are five of the biggest product flops and failures by large companies.
  • New Coke. New Coke is often cited as the ultimate example of one of the most notorious product flops and brand missteps of all time. ...
  • Crystal Pepsi. Pepsi introduced this clear cola in the early 1990s. ...
  • Arch Deluxe. ...
  • Ben-Gay Aspirin. ...
  • The Zune.

How many startups have failed? ›

Startup Failure Rates

About 90% of startups fail. 10% of startups fail within the first year. Across all industries, startup failure rates seem to be close to the same. Failure is most common for startups during years two through five, with 70% falling into this category.

Why do companies failed to survive in the market? ›

Ineffective management usually stems from a lack of relevant knowledge, underdeveloped skills, and/or an unwillingness to make necessary adjustments to personal behaviour and/or business processes. It is, without a doubt, the biggest threat to business performance and success.

What is the biggest killer of innovation? ›

Top 5 Innovation Killers
  1. People. Sometimes it's an individual; sometimes it's a group. ...
  2. Politics. You can usually get around one or two individuals who try to block your idea, but it's more challenging when the organization is rife with politics. ...
  3. Organizational design. ...
  4. Company values. ...
  5. Corporate culture.
2 Mar 2015

Do all successful companies need to innovate? ›

Business leaders must constantly look for new ways to innovate because you can't solve many problems with old solutions. Innovation is critical across all industries; however, it's important to avoid using it as a buzzword and instead take time to thoroughly understand the innovation process.

Can you have innovation without failure? ›

There is no innovation and creativity without failure. Period.” It doesn't matter if you are starting on your first innovation or you are a seasoned innovator, get ready for failure, perhaps lots of it. Sometimes you might get lucky and hit the jackpot with the very first attempt, but that's often not the case.

Why does Apple not innovate anymore? ›

This stagnation comes from Apple's complacency and competition from smartphone companies like Huawei. Even though Apple has only been making incremental improvements to existing products, they still occasionally dabble into innovation. Their most significant creations are the Apple Watch and the Apple Airpods.

What are the biggest companies that have failed? ›

50 Brands that Failed to Innovate
  1. Kodak. Kodak is a technology company that dominated the photographic film market during most of the 20th century. ...
  2. Nokia. Nokia was the first to create a cellular network in the world. ...
  3. 3. Yahoo. ...
  4. Xerox. ...
  5. Blockbuster. ...
  6. Segway. ...
  7. IBM. ...
  8. JCPenney.
28 Jul 2022

Why did Kodak fail and Fujifilm succeed? ›

In reality, Kodak failed for the same reason that Fujifilm succeeded: diversification. But for Kodak, it was the lack of diversification that condemned this firm to fade.

Why did Nokia fail with Samsung and Apple? ›

Why did Nokia fail to compete with Samsung and Apple? Nokia didn't adopt Android and focused on its hardware more than its software, which is why it failed to compete against Samsung and Apple.

What are the top 10 startup mistakes? ›

Here are the top ten most common startup mistakes – and how to avoid them.
  • Spending money on the wrong things.
  • Rushing through the hiring and onboarding process.
  • Acting without planning.
  • Operating without a style guide or brand persona.
  • Being afraid to test and learn.
  • Partnering with the wrong investors.
2 Sept 2022

Which famous person failed before success? ›

Albert Einstein

As a child he didn't start speaking until he was four, reading until he was seven, and was thought to be mentally handicapped. If he gave up and never persevered, his most important theories could not have been known. He went on to win a Nobel Prize and altered the world's approach to physics.

Who is the most successful failure? ›

Some of the most prominent 'successful failures' that come to mind include:
  1. WALT DISNEY. Did you know he was fired from the Kansas City Star because his editor felt he “lacked imagination and had no good ideas?” ...
  2. STEPHEN KING. ...
  3. OPRAH WINFREY. ...
  4. JK ROWLING. ...
  5. BILL GATES. ...
  6. COLONEL SANDERS.
5 Apr 2021

What are the top 10 reasons most small businesses fail? ›

The top 10 reasons small businesses fail – and how to avoid them
  • Lack of research. ...
  • Not having a business plan. ...
  • Not having the business funding they need. ...
  • Financial mismanagement. ...
  • Poor marketing. ...
  • Not keeping abreast of customer needs or the competition. ...
  • Failing to adapt. ...
  • Growing too quickly.

What are the 10 reasons why new business fail? ›

Why do businesses fail?
  • Lack of leadership. One of the most important reasons why a business fails is a lack of leadership. ...
  • Improper planning. ...
  • Ignoring customer needs. ...
  • Company culture. ...
  • Need for change. ...
  • Unsustainable growth. ...
  • Impractical partnerships. ...
  • Competitor success.
19 Jul 2022

What companies failed Going Global? ›

Here are some examples of companies that failed internationally due to a lack of social understanding and an in-depth breakdown of what really went wrong.
  • Walmart in Japan and Their Failure to Differentiate. ...
  • Home Depot in China and the DIY Attitude. ...
  • Starbucks in the Land Down Under and the Importance of Originality.

What famous people have failed? ›

9 Famous People Who Failed Spectacularly Before They Found Success
  • Isaac Newton (1643-1727) ...
  • Abraham Lincoln (1809-1865) ...
  • Charles Darwin (1809-1882) ...
  • Louisa May Alcott (1832-1888) ...
  • The Wright Brothers (Orville 1871-1948 and Wilbur 1867-1912) ...
  • Winston Churchill (1874-1965) ...
  • 7. Walt Disney (1901-1966) ...
  • JK Rowling (1965-)

What are the Top 5 reasons businesses fail? ›

Five Common Causes of Business Failure
  • Poor cash flow management. ...
  • Losing control of the finances. ...
  • Bad planning and a lack of strategy. ...
  • Weak leadership. ...
  • Overdependence on a few big customers.

What are the 4 main reasons why companies fail? ›

  • Financing Hurdles.
  • Inadequate Management.
  • Ineffective Business Planning.
  • Marketing Mishaps.

Who failed but became successful? ›

Thomas Edison

Edison may just hold the record for most failed attempts before reaching success on a single project, having failed several thousand times before inventing a functional light bulb. His response has become famous to entrepreneurs: "I have not failed. I've just found 10,000 ways that won't work."

What are some failures examples? ›

Here are some common examples of failures:
  • Receiving poor or failing test grades.
  • Not getting accepted into a degree or certification program.
  • Interviewing for a position but not securing a job offer.
  • Getting a bad performance review.
  • Missing a deadline.
  • Not making a team.
  • Losing a client, sale, project or money.
11 Aug 2021

Videos

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3. Innovation Failures | SMU Research
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