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6 companies that died because they did not know how to go digital

6 companies that died because they did not know how to go digital
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The level of digitization of companies will determine their survival in an ever-changing marketplace

We live in a changing world, evolving at breakneck speed. The immediacy demanded by clients has turned 30 seconds into eternity and passivity in the face of constant change into the beginning of the end.

As if that were not enough, competition is fierce in all fields, and if you don't do your job on time, someone else will come along behind who will do it better, in less time and what's worse: ready to sweep the market and consequently you. Demands are higher than ever, and not even an enormous giant can relax, or does Coca-Cola stop making ads?

This article brings you the most famous examples of large companies that either closed down or stopped being a trend in a sector in which they dominated with supremacy. They all for a common reason: they conformed and were unwilling to adapt to technological advances in their respective industries.

  • Kodak
  • Xerox
  • Blackberry
  • Blockbuster
  • Yahoo!
  • Terra

    Kodak ran out of a film

    In 1888, the company invented film. With more than 130 years of history, the photography giant went from an industry leader to declaring bankruptcy in 2012. Its mistake? Blinded by its success to completely ignoring the rise of new technologies.

    Paradoxically, the beginning of their demise was brought about by themselves when they invented digital photography in 1975, a project they decided to abandon because of the fierce competition it posed to their core business, photographic film.

    Today, the company that captured man's arrival on the moon is trying to survive by reinventing itself in the pharmaceuticals market, where Donald Trump, as President of the United States, granted them a loan of 653 million.

    Xerox, thank you

    This company, probably unknown to the general public, has been one of the keys to understanding technology as we know it. They invented the first computer.

    Unfortunately, however, the management team believed diving into the digital market would be too costly and bring them little profit. Along these lines, they continued to bet on photocopiers.

    In 2021, more than 341 million PC units were sold, the best year since 2012.

    Blackberry shied away from the touchscreen

    The same year Barack Obama confessed to being addicted to his BlackBerry, Apple was launching the first generation iPhone, thus poking its head into a market it would soon dominate.

    They were victims of their stubbornness, and the fact of ignoring both their competition and customer demands were two factors that ended up condemning them. From 2008 to 2012, their sales declined by 95%, and their stock market value went from $138 to $6.94.

    The last Blockbuster

    A glory as dazzling as it was fleeting. The video rental giant positioned itself in a market that changed every day... and they did not know how to do it with it. With VHS, they reached the top in terms of profitability, a concept that began to leave others with CDS, which were sold more cheaply... until these also lost their interest to the detriment of online viewing of movies.

    They had the opportunity to acquire Netflix in 2000 for $50 million, an offer they declined. In addition, their direct competition did not help either, as they chose to take losses and sell even cheaper to capture a more extensive customer base. In the end, Blockbuster was dissolved after being saddled with more than 1 billion in debt.

    The graph below shows how CDS sales and rentals far outpaced CDS sales and rentals, which meant less revenue for the company because of the difference in price per unit sold (plus the increased competition mentioned above).

    Yahoo!, the Google of the time

    Leaders at the dawn of the Internet, their reign would last until the early 2000s. "Their mistake was thinking they were the best, that they didn't have to look outside. You wouldn't search on a search engine that wasn't number one, and Google ended up being number one. On the Internet, it's only good to be the best," said Nacho Somalo, CEO of Lonesome Digital.

    They weren't wrong, but they lost focus and stopped being number one. Among their failures were the purchase of startups such as Tumblr and Flickr, which came to nothing. Nor did they get it right in what they stopped acquiring, as they refused to buy Google itself in 2002 by offering 3 billion dollars when they claimed at least 5 billion.

    With Facebook, the story is not much different. In 2006 they offered 1 billion to buy it, but at the last moment, they lowered the offer to 850, and Zuckerberg rejected it. Currently, the company is worth more than 3 billion.

    In 2016 came the agonizing end of the company, being sold to Verizon for 4,830 million dollars, a figure that, despite seeming very bulky, seems minuscule when compared to the 125,000 million that the company was worth.

    Banished by the dotcoms

    At the end of the last century, Terra was more significant (proportionally to the time) than Facebook is today. Its capitalization exceeded giants such as Repsol or BBVA.

    However, after the dot-com bubble burst in 2000, the company began a vertiginous decline that led them to have more than 2 billion in losses in 2002, to end up closing in 2017 after unsuccessfully trying to reinvent itself in music and movie rentals.

    In the following graph, we analyze the resounding fall in the stock market, going from almost $140 to close at 4.62 its market share. In other words, it fell 30 times its value.
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