7 companies that failed to adapt These businesses were once household names, but failed to innovate. We mitigate these risks through our research into companies and the industries they operate in, helping us build resilient, diversified portfolios that protect investors against ruinous mismanagement.
The Finnish company was the giant of the mobile phone market until 2007, and was once known for being one of the most innovative and adaptive around: it invented a smartphone in 1996 and even a prototype touchscreen, and made mobile phones into fashion accessories. So, what went wrong? It was perhaps a victim of its own success in creating brilliant hardware, but failing to understand the importance of software, and apps in particular. Crushed by Apple and Android, by 2013 Nokia’s market share had shrunk to just 3%, and it eventually sold off its remaining assets to Microsoft for $7.2bn.
Kodak once dominated the photographic industry with a market share of around 50% worldwide, but the company failed to progress with the digital camera revolution, instead pouring its investment into photographic film, as it had done for decades. Despite one of its own engineers creating the first digital camera in 1975 as well as holding over 7,000 patents, the company failed to innovate and steadfastly stuck to the tried and tested film roll business model until it was too late. Kodak filed for bankruptcy in 2012, with the loss of 7,000 jobs.
18
Wealthsmiths Winter 2021
Photos: Alamy
The collapse of Woolworths, the UK’s iconic high-street store that sold everything from CDs and children’s clothes to paint and pick’n’mix, shocked both business and consumers when all 800 shops closed in 2008. Though the tipping point was the global economic crash, the 100-year-old brand’s demise had been on the cards for some time, due to a combination of poor management, a highly unionised workforce, failure to adapt to changing consumer demand, rising high-street rents, and an awkward market position that was neither high-end department store nor pound shop.
