Analysis on Successful and Failed Company

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  • Topic: Subway, Eastman Kodak, George Eastman
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Analysis on Failed Company
1. Kodak
Kodak founded in 1880 by George Eastman. Eastman Kodak, the 131-year-old film pioneer that has been struggling for years to adapt to an increasingly digital world, filed for bankruptcy protection on January 2012. (Merced, January 2012) Example:

In 1996, Kodak introduces Advantix Preview film and camera system, which Kodak spent more than $500M to develop and launch. One of the key features of the Advantix system was that it allowed users to preview their shots and indicate how many prints they wanted. The Advantix Preview could do that because it was a digital camera. Yet it still used film and emphasized print because Kodak was in the photo film, chemical and paper business. Advantix flopped. (Mui, 2012). Reasons of Failure:

Kodak’s strategic failure was the direct cause of Kodak’s decades-long decline as digital photography destroyed its film-based business model. Kodak’s missed opportunities in digital photography. Kodak management’s inability to see digital photography as a disruptive technology, even as its researchers extended the boundaries of the technology, would continue for decades. George Eastman, who twice adopted disruptive photographic technology, Kodak’s management in the 80’s and 90’s were unwilling to consider digital as a replacement for film. The transformation from analog cameras to digital camera was failed. This limited them to a fundamentally flawed path. They cannot compete with the gradual rise of the mobile phone camera ( Apple iPhone, Samsung) and others strong competitors ( Nikon, Olympus, Canon). Kodak mistakes that people, in after the picture will continue to print it out, but this kind of thing more and more impossible. From this perspective, photo sharing more for communication, rather than personal memories. 2. Pets.com (internet and new technology failure)

Launched in August 1998, Pets.com was created to sell pets food and accessories via the internet. Users of the site could browse through different categories, choose products they like and have them conveniently delivered to their home. On 7 November 2000 Pets.com announced that it could no longer continue as a business, and as such became the first US dot.com on the stock market to close. Pets.com folded after having burned through $300 million in less than two years. Over 300 people lost their jobs and the site was shut down. In a statement made to the press on that same day, CEO Julie Wainwright explained the situation. ‘It is well known that this is a very, very difficult environment for business-to-consumer Internet companies,’ she said. Reasons of Failure:

Perhaps the main problem was that Internet users weren’t ready to order their pet food online. After all, dog food is dog food, and there clearly weren’t enough people searching for rare pet items that they wouldn’t be able to find in their hometown. In 1998, people will rather driving down to the shops and getting the pet food and accessories on the spot, rather than wait a few days delivery period. The strategy of offering extreme discounts clearly wasn’t working. According to Dan Janal, author of Branding the Net, the cost per customer acquisition for Pets.com was about US $80. He said ‘There’s no way you make that back when you sell a product with a paper-thin margin...’ But its discount policy wasn’t Pets.com’s only problem. It had also introduced free shipping – which was proving increasingly expensive for the company to sustain, especially when customers were ordering very little. One of its major mistakes was the excessive spending on marketing and advertising. During its lifetime Pets.com spent more than $70 million on marketing and an average of $400 to acquire each new customer (Bucholtz, 2000). Pets.com advertised more heavily than any other online pet e-tailer. Pets.com spent too much money on building awareness, and too little time questioning whether its Web site was a viable business in the long term.  

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