5 companies that used to be great
Former great companies now on the decline
I am always amazed at how fast technology has changed over the years and how some businesses keep up and of course how some do not. Well this is about some big name companies that used to be shining stars however they are quickly becoming obsolete. Some of these transformations are years in the making while others fall fast and hard.
Blockbuster and the Movie Rental Business
I can remember going to Blockbuster 15 to 20 years ago to rent a DVD and take home to watch over the weekend. It was great to go because you would usually get some treats and pick out the latest release to watch with some friends for about $5 or $6 bucks. Despite this being a weekend ritual for myself it was incredibly inconvenient because of course you had to physically return the movie and you were always worried about getting late fees. Despite the inconvenience I would still frequent stores like Blockbuster to get my movie entertainment.
Of course things started to change, you could start getting movies on demand through your cable, buying movies on DVD became cheaper and of course the internet. The Internet was the biggest game changer because of the amount of information available. People started to download movies, companies like Netflix and the monthly subscription and unlimited viewing of movies brought down the once mighty Blockbuster. My monthly subscription of Netflix at $8 would only rent me about 2 movies from Blockbuster 15 years ago. This is the reason why the company is bankrupt.
Blockbuster Stock Chart
Well the film business is not what it used to be, in fact it almost non existent. Kodak is yet another victim of the digital age, the company is struggling just to compete, despite an attempt to modernize it's products and business. Gone are the days when you took your expensive film into the 1 hour photofinishing kiosk. Now you don't have to bother with expensive film and your results are instant thanks to digital technology. Eastman Kodak has moved into the digital space however they were a bit late in the game. They were once a mainstay in the camera business now they are struggling to keep up with intense competition. The once great company that used to be on the DOW Jones Industrials is now just a shadow of its former self.
Nokia used to be the biggest seller of cell phones and their product was really good. Well the product used to be good 10 years ago, however intense competition from Research in Motion and Apple of course have chipped away at sales of Nokia phones. Nokia still makes a good product however the competition makes a great and exciting product which leaves some room for improvement for the company. The company has been on the decline for a while their stock price is the same as it was in 1998 the only good thing about Nokia is the dividend in terms of an investment. The company still makes money and employs about 130,000 people just not sure how long this will last unless the company revamps the product line.
Yahoo was at one time dominant in search and was a premier company, however they had one big problem to contend with "Google". Google of course just did things better, they did search better and were much more innovative with their services. Yahoo recently had a chance to compete with Google and that was when Microsoft wanted to merge with them by offering around $30 per shares. The CEO and founder at the time Jerry Yang did not want to merge with Microsoft and the deal fell apart. Well Yahoo stock is around $15, Microsoft has their own search with Bing and Google is still eating Yahoo's lunch. They should have taken the Microsoft deal the shareholders and the company would have been better off.
Sears Holdings Corporation
Sears was a great company when department stores were relevant, now days no one wants to go to a department store to purchase appliances and clothing. They can probably get a better deal elsewhere like at Walmart or Target, Costco, Home Depot etc. Big box stores like Walmart have put a great deal of pressure on stores like Sears. The business model no longer works and traffic and sales at their stores are on the decline. It is not too late for Sears however they will need to change with the times in order to keep up with the competition.