By Geetika Khurana,
Edited by Nandita Singh, Senior Editor, The Indian Economist
“The truth is that entrepreneurship is more like a roller coaster ride than a cruise”.
The biggest adventure one can take is to live a life of one’s dreams. Most entrepreneurs are driven by the motive of turning their dreams into reality; they say it helps you to succeed.
“If we keep executing well and keepdelivering, then our future can be quite bright”, said Nokia CEO, Stephen Elop. Elop had predicted success in July, and then sold Nokia’s division to Microsoft in September. What happened? Why did Nokia fail?
For several decades Swiss Air had a reputation of being an almost perfect embodiment of traditional swiss air virtues -reliability and solidity. However, it collapsed. Why was it so?
Why dobig corporate giantsfall?
The failure of big companies to adapt in a changing environment is one of the fundamental reasons. Companies tend to forget what their customers want, once measured they stop monitoring trends and then end up in massive failures. Nokia did not think of Apple and Google’s range of products and how its products were not as in demand as theirs until it was too late. Nokia stuck to its Microsoft software when Android comprised almost 80% of the market share, and thus, they bore the consequences. At its heart Nokia had always been a hardware company, and it was struggling in the software market where Apple and Android ruled. Its marketing plans failed, which were shockingly planned and executed by hardware experts instead of the software supervisors. Another big mistake that this classic case of Nokia highlighted was that at times corporates tend to overestimate the strength of their brands, as Nokia did, assuming that they will be able to catch up quickly due to the established image of their brand name.
Many companies do not even keep their costs well organised. GM’s case is very apt to highlight this. GM had tremendous fixed costs related to itsunion contract.Most of their costs did notdecrease even as the sales went down.
A number of corporates faced downfalls as they lacked diversity- of people and products. Nokia surrendered itself to Microsoft as it lacked new innovative ideas. Its top executives were all people of similar backgrounds and this was partly the cause in their failure to adapt to a vastly diverse market, as well as a fast changing environment.
Swiss Air was once so financially stable that it was known as the ‘Flying Bank’. Then what happened? The reason- the airline was unable to compete internationally. It was clear in 1992 itself that Swiss Air’s future prospects in the European markets were desolate after Switzerland’s decision not to join the common European market.
It is clear that those executives that keep their eyes wide shut and do not pay heed to external feedback are the ones who fall.
However, some degree of failure is inevitable in any startup, for very few enterprises achieve all their projections. Learning from the failures is what makes all the difference.Google, Amazon and Netflix are all great examples — they have all had their share of failures, but everyone accepts them as part of the package.
It all depends on the company’s strategy to survive in the long run – be aware of competition, be updated, and be proactive.
Geetika Khurana is currently a student of commerce at Shri Ram College Of Commerce, She loves reading novels, mainly thrillers. She has a keen interest in economics, is fond of debating and loves travelling. Passionate about writing, she believes it helps her to define and express herself