Kodak, Nokia, Yahoo ... What have companies learned from the decline of their former giants?

Innovation is the first driving force to lead the development of business and society. Technology is changing with each passing day, and the market environment is changing rapidly. Whether it is a century-old enterprise or a business star, a listed giant or a street shop, it is constantly undergoing the test of life and death. In this vanity fair, companies that stick to the rules and do not pay attention to innovation will undoubtedly be eliminated.

In the history of global business development, it is not difficult to find that some enterprises have become world-famous brand giants through innovation and change. However, we also see that these once brilliant giant enterprises with innovative genes may still be eliminated because they can't keep up with the changes of the times, and eventually remain in the case library of failed enterprises in colleges and universities. Those vigorous achievements are submerged in the dust of history, which makes countless people sigh.

Yes, no innovation is death. But how can enterprises continue to innovate, and how can vested interests and innovation risks be weighed? Will innovation continue to succeed? Why do the business stories of companies that once climbed to the top by innovation and then lost their leading position in the industry repeat themselves again and again?

Kodak and Nokia lying in the library of failed cases

When it comes to the case of the decline of enterprises due to lack of innovation, people are always willing to put Kodak and Nokia together, perhaps because they are both too brilliant and too suddenly collapsed.

As the world's largest influential producer of products and services, Kodak has changed the photography industry and fixed the good times as eternity. It was once a company that made generations of Americans feel kind and proud. George eastman, the founder of Kodak, once said that his goal was to make the camera as convenient as a pencil. Therefore, he has always attached great importance to innovation and created many firsts. When the camera technology still uses the "wet printing method" which requires a lot of tools, Hysmans successfully explored the "dry printing method" which greatly simplifies the photography process. When the technology and effect of color film are far less than that of black and white film, Eastman gambled on more promising color glue. Kodak also took the lead in launching a small camera Kodak, once again leading the trend. In its heyday, Kodak occupied 2/3 of the global film market, with franchise stores all over the world.

But this is how the century-old giants are vulnerable when digital photography comes. From 65438 to 0998, Kodak's traditional film business began to shrink. By 2003, the sales profit of the traditional imaging department had dropped to a fraction of the peak period. At this point, Kodak decided to transform into digital products. However, the general trend has gone, and its position was quickly replaced by Japanese brands such as Sony, Canon and Fuji. In the era of digital cameras, Kodak went into decline. 20 12 1 month, Kodak with a history of 132 was forced to apply for bankruptcy protection.

If Kodak is synonymous with photography in the film age, then before Apple appeared, Nokia was synonymous with mobile phones. Nokia was originally a paper mill in a small village in Finland. In 1960s, it began to expand into the field of electronic products. Nokia also created many firsts: 1982 produced the first Taipei European mobile phone senator; ; 199 1, the first global dialogue in human history; 1994 connected to the first wireless data telephone in China; 1996 became the mobile phone manufacturer with the highest market share in the world. At its peak, Nokia's global mobile phone market share was as high as 70% and its market value was as high as $250 billion. It can be said that before Apple, Nokia dominated all the changes in the mobile phone industry. However, after Apple and Google launched iPhone and Android in 2007, Nokia embarked on the road of recession. In 20 12, Samsung replaced Nokia as the company with the highest sales volume of mobile phones in the world for the first time. In 20 13, Microsoft announced the acquisition of Nokia's mobile phone business unit for $7.2 billion.

More star companies are submerged in history.

Kodak and Nokia are by no means alone, and there are more former star companies that "can't catch up" in the great changes of the times and eventually fall silent.

Motorola Corp.

Before Nokia dominated, Motorola used to be a leader in the mobile phone communication industry. Motorola invented the radio transponder, and developed the world's first commercial mobile phone, the first GSM digital mobile phone, the first two-way pager and the first smart phone ... Motorola led the world's mobile communication trend for nearly 20 years in the functional machine era, but it was also a fiasco in the mobile Internet era. Due to long-term sustained losses, in August of 20 1 1, Motorola sold its mobile phone business to Google at a price of 125 billion US dollars, and later sold it to Arris and Lenovo Group.

American Yahoo Company (providing Internet information retrieval service)

Yahoo, founded in 1994, is the absolute ruler in the Internet 1.0 era. Yahoo first created the concept of portal website, and created the myth of landing on Nasdaq one year after its establishment. Even after Google became the mainstream search engine for a long time, Yahoo is still the largest company in the global Internet. During the ten years from 1996 to 2006, Yahoo's turnover increased by 260 times. However, in the recession tide of portal websites, Yahoo, the industry leader, was not spared. Without keeping up with the times and developing competitive new business, Yahoo was later left behind by companies such as Google, Facebook and Amazon. 2065438+In July 2006, American telecom giant Verizon bought Yahoo's core network assets including search engine and email for $4.83 billion.

A small valley with trees in or around it.

Similarly, Dell was once the boss of PC. 1984, only 19-year-old michael dell founded Dell. At that time, personal computers had just emerged, and the price was very high, but many profits were earned by dealers. Dell chooses to sell directly to users, cutting off the middle distributors and retailers. Consumers can also order computers from Dell through official toll-free telephone and online channels according to their own configuration preferences. This not only saves Dell about 20% of the cost, but also allows consumers to buy cheap and personalized computers. One and a half years after its establishment, Dell was listed as the "most admired company" by Fortune magazine. Four years after its establishment, Dell was listed on Nasdaq. From 200 1 to 2005, Dell became the largest computer company in the world for five consecutive years.

But then the founder stepped down as CEO, diversified layout and frequent quality problems made Dell go downhill, and the world's largest computer company became HP. In 2007, Dell was forced to take charge of the company again and began drastic reforms. In 20 13, Dell was delisted due to business integration. Until 20 18, Dell changed its name to "Dell technology group" and re-listed on the NYSE. A big news about Dell recently is that Dell has a huge debt of about 300 billion yuan.

How to maintain the vitality of enterprises in the great changes of the times

"When times abandon you, they won't even say goodbye to you? . "This warning from Zhang Quanling, a former CCTV host and now the founding partner of Niuzi Fund, was once popular. According to Fortune magazine, in the United States, the average life span of large enterprises is less than 40 years, and that of small and medium-sized enterprises is less than 7 years. Every year, about 65,438+10,000 enterprises close down. In China, the average life span of group enterprises is only 7-8 years, while that of small and medium-sized enterprises is only 2.5 years, and about 654.38+00000 enterprises close down every year.

There are various reasons for the decline or closure of enterprises, such as management, capital, strategy and timing. However, the lack of innovation is often listed in the first place because technology is developing too fast. In the ever-changing technological changes, enterprises that are content with the status quo may be "subverted" and "revolutionized" at any time. But can an enterprise really persist in innovation? Can you be invincible as long as you persist in innovation? If so, there wouldn't be so many tragic stories in the business world. In fact, innovation and development are sometimes contradictory, and it is difficult for enterprises to take care of both.

For example, Kodak mentioned earlier, when we analyze why Kodak was abandoned by the times, it was always "wise after the event", simple and rude-it did not transform in time in the digital age. In fact, as early as 1975, Kodak engineer Steve Sason developed the first digital camera. But this technology is hidden in the snow. "It's cute, but don't tell anyone." This is the company's reaction. Why is this happening? At that time, Kodak's film business was booming, and Kodak made huge profits from it. The relationship between digital camera and film camera is "substitution", and the new technology is not yet mature and the future is uncertain. For Kodak, the price of choosing the former is too high. 1999, Kodak CEO George Fisher admitted that Kodak regards digital photography as an enemy, and this demon may obliterate the chemical-based film and photographic paper industry, which has been the profit base of Kodak for decades. Can enterprises that pay attention to innovation and are willing to take risks survive? Afraid of missing out on new technologies, Yahoo spent $65.438+07 billion to acquire more than 654.38+020 startups, but it ended up in the same way, because it just missed Google and Facebook, which would subvert it in the future. Of course, Nokia does not pay attention to innovation. Its R&D expenditure in 2000-20 10 was as high as $40 billion, far exceeding that of Apple and Samsung. However, it made a mistake, and the innovation of R&D was limited to hardware.

How do enterprises strike a balance between sustainable profitability and innovative development? Joshua Gans, chief economist of disruptive innovation laboratory and professor of strategic management at Lautmann School of Management, University of Toronto, gave three suggestions in The Innovator's Action.

The first is to find new markets. Gans believes that a successful company can achieve continuous innovation, such as improving existing products and services through technology, which can help the company earn profits for a long time and win more market share. But it often gets into trouble when it carries out subversive innovation, and subversive products and services will replace existing products and services, which means risks and losses. Therefore, we can try to find new markets that are neglected and do not conflict with existing customers to innovate. The second is to transfer investment. Gans believes that in the face of potentially subversive new companies, successful companies can prevent innovative companies from entering the market or seize the market of innovative companies through investment. The third is wait-and-see and acquisition. Gans wrote in the book that acquisition is a particularly effective means to deal with subversion, because acquisition makes it unnecessary for companies to spend money to develop new products, compete with many new companies that may have subversive effects, and integrate the products and technologies of new companies into the company's main business.

Joshua Gans's Innovator's Action was written after he investigated dozens of successful companies and those that failed, including Apple, Google, Canon, Netflix and Microsoft. However, the life span of companies such as Apple and Google lags far behind that of Kodak and Nokia. It can't be said that they have passed the test of history. Many methods are one thing in theory and another in practice. As Joshua Gans said, innovation and subversion are also a cyclical process. More than a century after the invention of the airplane, cargo ships are still operating all over the world, online video has existed for many years, and the box office of movies is still growing. Therefore, he reminded that managers should not only innovate and subvert, but also seriously consider the fate of traditional businesses. After all, the latter may have a profit period of decades or even longer.

In short, any mature, leading and innovative enterprise may be eliminated by the great wheel of the times. "Uncertainty" is the normal state of business and the charm of business. What business operators can do may only be to be sensitive to change and set foot on the earth and don't forget to look up at the stars.