Why didn't Thomas Cook adapt to survive?
Six pioneers who failed spectacularly, and a wobbly candidate
Ideas turn the economy upside down. Champions also have to adapt, otherwise even the greatest of them are threatened with extinction - as the example of Thomas Cook shows. A look into history and into the future.
Joseph Schumpeter called creative destruction the natural process of innovation that asserts itself and reorganizes the market. There are companies behind the innovations. But even these pioneers are not always successful, as the bankruptcy of package travel pioneer Thomas Cook proves. This is how even the best idea can survive. An incomplete look at history.
The American photo film maker was a force. At its best, the company had a market share of over 80% in the US and around 50% worldwide. Kodak had over 60,000 employees and the Oscars were presented at the Kodak Theater in Los Angeles.
In January 2012 it was suddenly over. The digital camera had completely destroyed the film business. The bitter thing about Kodak's demise was that it invented the technology that destroyed the company. A Kodak engineer built the first digital camera back in 1975. But the management didn't want to know anything about his invention, as inventor Steven Sasson later announced in an interview with the New York Times. The bosses feared filmless photography and instructed him not to tell anyone about it.
Review: How has Kodak shaped us?
The collapse of the Winterthur Erb Group in 2003 is the second largest company crash in Swiss post-war history after the Swissair debacle. The billion dollar company is a prime example of a global expansion of a simple small business that has gotten completely out of control.
The rise of the former Swiss model company began when the metalworker Hugo Erb bought his father's ailing car garage around 1950. As a real pioneer, he developed this into a large company with numerous brand representatives. He later expanded almost indiscriminately into the construction and wood industries, into the global coffee trade, and into the financial business.
The group with over 80 companies finally achieved a turnover of over CHF 5 billion and had over 5000 employees. The empire collapsed when the family speculated heavily on foreign exchange deals and property purchases in the new east of Germany. The company was dissolved at the end of 2003 with a mountain of debt of CHF 2 billion.
Johannes Gutenberg revolutionized book production with movable lead letters. Instead of copying, books could be produced quickly, en masse, and for little money. In the 15th century Gutenberg built his first book press in Strasbourg and then brought his ideas to market in Mainz. Thanks to Gutenberg's invention, the letters could be used over and over and any text could be set. This made books mass-produced. Book printing turned the world order inside out and marked the beginning of a new era.
But the inventor could not benefit from this. The maintenance of the print shop and the payment of the employees were expensive. The income from the book sale could not cover these costs. Since Gutenberg could not pay the interest, his financier took him to court. In order to pay off his debts, the inventor had to part with a large part of his printing company.
The American automaker General Motors was the measure of all things for more than half a decade. The company was the largest car manufacturer in the world from 1931 to 2007. However, with the financial crisis and economic downturn, US auto sales went into freefall. GM lost billions and had to deposit its balance sheet. By the time the company opened its books, it had accumulated over $ 30 billion in debt. GM chief Rick Wagoner turned to Washington for help and called for a government injection to save the industry and save GM from bankruptcy.
Thanks to the tax money, GM has since recovered somewhat and continues to build cars. Still, the former giant is a shadow of himself and is now struggling with the fact that he jumped on the electric car bandwagon late on.
Finnish cell phone manufacturer Nokia was actually a prime example of transformation. In addition to telephones, the company also produced paper, electricity and rubber. In the early 1990s, the company anticipated the triumphant advance of the cell phone and fully aligned itself with it.
Nokia then put an end to it with smartphones. And this even though Nokia was not a technological laggard. On the contrary: The company developed its first smartphone back in 1996 and built a prototype of a touchscreen and internet-enabled phone at the end of the nineties. However, despite immensely high spending on research and development, Nokia failed because the company failed to build a smartphone that people actually wanted to buy. The company's share price collapsed, and in 2013 the cell phone division was acquired by Microsoft.
But the company has left a big mark in Finland. For example, the state sold its shares in Nokia at an opportune time. The money is still used today to support innovative companies.
Thanks to fixed prices, cash payments, exchange of goods and low prices, Leonard Tietz turned the retail landscape in Germany upside down with his textile shop and laid the foundation stone for the Kaufhof department store in 1879. But online trading and cheap competition from cheap clothing chains make life difficult for the department store. In 2015 the company was sold by the retail giant Metro to the Canadian Hudson’s Bay Company. But this could not slow the downturn.
Since the takeover by the Canadians, the traditional company has recorded increasing losses in the double-digit millions from year to year. The suppliers lost confidence and only delivered against prepayment. When the company was on the verge of bankruptcy, it was sold again and merged with competitor Karstadt. The Austrian entrepreneur René Benko is currently trying to prevent the worst.
The epitome of today's pioneer is tech billionaire Elon Musk. The bustling entrepreneur has not only revolutionized online payment transactions with PayPal, but also wants to help the electric car achieve a breakthrough. Musk also wants to revolutionize space travel, for example, or make solar energy a successful product.
But his electric car company Tesla is not getting anywhere. The sales figures do not match the founder's vision. In addition, Tesla writes high losses. If Musk does not manage to turn the wheel around and ensure that e-car construction becomes sustainably profitable, things can get uncomfortable. Still, if Musk makes the breakthrough, then Tesla could be around for a long time - until the next technological change.
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