We have seen innovations becoming powerful tools of progress in modern times, but sometimes these innovations end up killing the companies that created them and there are times when these innovations revive the companies from the brink of extinction. Let’s look at such companies that died because of the innovations they invested in and those companies that were saved because of innovations they invested in.
In the rapidly changing marketplace, large corporations rely on product innovation to stay in the competition. Companies that don’t pay heed to warning signs of transforming the business world and fail to adapt to disruptive innovation are forced to declare bankruptcy or go out of the market.
Commodore founded one of the most loved multimedia and gaming computers during the 1970s and 1980s. They were the manufacturer of the world’s largest selling single computer model of all time C64, about a 17million units were sold and it even made a place for itself in the Guinness World Records. It was a perfect machine in terms of cost and performance. The firm went on to reach the position of global dominance before declaring bankruptcy on 19th April 1994. Amigos succeeded an ageing C64, packed with must-have games, productivity packages, and art software.
So far the company stumbled from one crisis to another but a lack of a coherent business plan, continuous change in senior management, and misreading of market changes lead the company to debt and ultimately extinction.
Eastman Kodak Company brought the famous phrase “Kodak moment” through its low-priced cameras but failed to keep up with digital age innovations. Kodak filed for bankruptcy in 2012 as the increasing popularity of digital cameras reduced the need for photographic cameras. Surprisingly, their research team came up with the digital camera around the 1970s, but the company failed to understand its potential.
BlackBerry, offered a device with an arched keyboard and was successful in changing the mobile industry. But, it was more focused on preserving what it had when other players started focusing on touchscreen displays. BlackBerry was officially out of the smartphone manufacturing business.
But, there are also those companies that came back from the brink of disaster. One such company is Corning, one of the world’s leading innovators in material science, which started in 1851. The company has continuously evolved through innovation. It is the same company that made a special glass container for Thomas Edison to use in light bulbs. After 170 years of its formation, Corning’s market cap is over $30 Billion. The company is credited with life-changing inventions. Corning created a ceramic filter to help cut down on car emissions by trapping pollutants before they could escape the car’s exhaust pipes. In the 1970s they came up with the world’s 1st low-loss fibre optic wire which replaced copper with glass. But, corning got caught up in the fibre optic craze, and the idea of the unlimited potential of a wired nation lured many companies to invest billions. Since 1880, Corning eliminated its dividend for the first time in 2001, closed down its manufacturing plant, and also laid off its employees.
But, unlike many companies, Corning has an unparalleled commitment to R&D. They adapt, evolve, and diversify to stay ahead of their competitors. Corning has a specific 3, 4, 5 approaches for long, term growth, in which it divides focus into 3 categories: Ceramic science, Optical Physics, and Glass science, in the next they prioritise 4 manufacturing units: Vapour Disposition, Fusion, Precision Forming, and Extrusion, at last, they focus on 5 markets: Optical Communication, Mobile Consumer Electronics, Display, Automotive, and Life Science Vessels. Corning’s keep on repurposing and reapplying its capabilities to innovate successful products for years.
The Danish Company Lego, encouraged creative play toys for kids but in 2003, the company was in financial crisis with a debt of US $800 million. It was selling some products below their manufactured cost and new toys were failing to have a lasting impact. But a few years later it became the world’s largest toy company, it was saved by its new strategies where Lego recruited designers, started crowd funding, and even offered a 1% share for winning ideas. The company also rolled out products based on Ghostbusters, Mine crafts, Back to the Future etc. Companies invest heavily in the products or equipment and so many times resist investing again in the newer technologies. Companies also fail to identify the market volatility and technological shifts. They don’t notice or don’t want to notice the new developments as they are too busy being obsessed with the product that made them successful. Another reason could be the misappropriation of future market changes in the company’s strategies. Holding on to the past has bankrupted many big companies.
With the advent of what the economist James Lesson calls the Superstar Companies the innovation, and economies of scale are tipped in the favour of a few companies such as GAMA (Google, Apple, Meta, and Microsoft) that have very low cost of capital acquisition and are therefore investing more in new technologies, and wherever a challenger emerges they buy them out. This is where the need of regulating big tech emerges as it narrows the innovation opportunities in the market by the sheer amount of complexity they can create the losers are the economies, customers, and in the end innovation potential.
