What are the worst business decisions you’ve ever seen?
Blockbuster passing on Netflix has to be up there.
Blockbuster passing on Netflix has to be up there.
Worst business decisions ever.
- Thread starter CastletonSnob
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Back in the mid 1800's a man named Edwin Drake teamed up with a blacksmith to design a new, more efficient method for drilling oil. They succeeded. Unfortunately, Drake was not a business savvy man and did not patent his oil drill. A little later, the American oil industry exploded. Drake, however, was fired and ended up dying an impoverished man.
The thing about business decisions is that the things we consider no-brainers nowadays we do with the benefit of hindsight, while it would've been much less clear cut at the time.
For instance, Yahoo! at one point was offered to buy a little start-up called Google, which they chose not to. We can consider that a bad decision, but if they had bought them it is possible that the guys that were brilliant enough to create that search engine would have immediately quit and created Google2 inc.* while Yahoo! would have to make do with a search engine that might not have fit with what they were trying to accomplish, preventing it from becoming the success that it was and is.
We can also talk about how Kodak went under because they insisted on not adapting to digital photography gaining foothold.
*probably not that name, but you get my drift.
For instance, Yahoo! at one point was offered to buy a little start-up called Google, which they chose not to. We can consider that a bad decision, but if they had bought them it is possible that the guys that were brilliant enough to create that search engine would have immediately quit and created Google2 inc.* while Yahoo! would have to make do with a search engine that might not have fit with what they were trying to accomplish, preventing it from becoming the success that it was and is.
We can also talk about how Kodak went under because they insisted on not adapting to digital photography gaining foothold.
*probably not that name, but you get my drift.
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JC Penney allowing then CEO Ron Johnson in 2012 go all-in on a business strategy that involved nixing sales and "streamlining" the stores making them look more like an Apple Store than the American institution the company had been for +100 years. The company went bankrupt a few years later while Johnson walked off with a healthy severance package in 2013. It's still in damage control mode almost 10 years later given the rise and convenience of online shopping that has made the efforts of even previously healthy brick-and-mortar retailers a struggle.
JCP's stock went from over $40/share to under $1 in about two years; they had to be bought and privately held to keep from failing entirely. They lost a lot of tenure and institutional knowledge between layoffs and people jumping ship from lack of faith in the company's redirection trying to right the ship after Johnson. Ever since, it's been one CEO after another with "ideas" meant to make JCP viable again. Apparently, they're doing better now after being privately held, but I think that's the only reason; the public doesn't have the old straight line of sight to their performance.
JCP's stock went from over $40/share to under $1 in about two years; they had to be bought and privately held to keep from failing entirely. They lost a lot of tenure and institutional knowledge between layoffs and people jumping ship from lack of faith in the company's redirection trying to right the ship after Johnson. Ever since, it's been one CEO after another with "ideas" meant to make JCP viable again. Apparently, they're doing better now after being privately held, but I think that's the only reason; the public doesn't have the old straight line of sight to their performance.
Nickelodeon passing on Adventure Time, which would become a huge hit for Cartoon Network, and one of the best and most influential cartoons of the 2010s.
Nickelodeon also passed on Ed Edd n Eddy, which also became a hit on Cartoon Network.
And just in case you thought Nickelodeon's decision making regarding which shows to pick up couldn't get any worse, they passed on Phineas and Ferb, which became one of Disney Channel's biggest hits.
Nickelodeon also passed on Ed Edd n Eddy, which also became a hit on Cartoon Network.
And just in case you thought Nickelodeon's decision making regarding which shows to pick up couldn't get any worse, they passed on Phineas and Ferb, which became one of Disney Channel's biggest hits.
Gerald Ratner comes immediately to mind for me. He built his fortune after inheriting a small jewelry business from his father, building it up from a small retailer to a multimillionaire franchise.
That all came to an end when he was a guest speaker at the Institute of Directors. He was asked how he could sell, for example, a sherry decanter for less than 5 pounds. His answer? "'How can you sell this for such a low price?' I say, 'Because it's total crap.'"
Within days, his company's stocks were down 500 million pounds, he was out of a job, and the company had renamed itself to try to keep from going under entirely.
Oops.
www.businessblogshub.com
That all came to an end when he was a guest speaker at the Institute of Directors. He was asked how he could sell, for example, a sherry decanter for less than 5 pounds. His answer? "'How can you sell this for such a low price?' I say, 'Because it's total crap.'"
Within days, his company's stocks were down 500 million pounds, he was out of a job, and the company had renamed itself to try to keep from going under entirely.
Oops.
The man who destroyed his multimillion dollar company in 10 seconds
Have you ever heard of the “Ratner effect”? By the end of this post, you will know what it means. Gerald Ratner inherited his father’s jewellery business in 1984. He had turned a small retailer into a multimillion-dollar empire within six years. He made it so successful that every British high...
www.businessblogshub.com
Often, yes, sometimes it's a bit more obvious.
Hugo Borchadt decided he'd be better off inventing gas systems, rather than go for this new and unproven electricity thing. That was a mistake that wasn't obvious.
He'd also designed the C93 Borchady semi-automatic pistol, but people wouldn't buy the thing unless he made a number of changes, because the design showed promise but was totally unviable as it was. He refused, because his gun was perfect and anyone that disagreed was ugly and stupid. So it was someone who'd previously been his assistant that turned the idea into something workable, someone who'd listen to criticism and make adaptations to the design, who got it named after him and it sold zillions. That man was Georg Luger. That was a mistake that would hae been obvious, but Borchadt's ego got in the way.
Also, I might mention White Wolf, which has gone out of business and been bought out more than once, and has had a habit of pumping out shovelware by writers who either don't know or don't care that their work contradicts other WW products. Getting people to collaborate and keep things consistent wouldn't have been hard, it just wasn't done.
Another fun thing: something can look like a blunder but is planned and works out as intended.
New Coke is what I have in mind. They took the most successful cola in the world, that they had a campaign touting the fact that it was less sweet than Pepsi (sweetness can actually exacerbate one's thirst) and announced it would now be sweeter. Long story short, they then announced Classic Coke being OG formula (minus the cocaine) and along the way, replaced sugar with corn syrup and no one was the wiser. I think they even recovered some market share from Pepsi.
That's always been a rumor, never confirmed. At least, the part about it being planned to get away with replacing the sugar. Every time Coca Cola has been asked about it, their response has been "We're not that smart, and we're not that stupid".
Snopes has an article about this.
Was the 'New Coke' Fiasco Just a Clever Marketing Ploy?
Was the 'New Coke' fiasco really a clever marketing ploy?
www.snopes.com
So no, this wasn't some 4D chess move. Coca-Cola just made a mistake.
That's not strictly true.
Coke was losing market share. In particular the Pepsi "taste test challenge" adverts from the 80s were proving extremely effective: apparently, even most Coke executives preferred Pepsi under it (The taste test of course was a sort of trick). It was very valid for Coke to get worried and decide to shake things up.
The funny thing was that from their pre-release marketing and early into New Coke, people did say that that New Coke tasted better. But then a backlash kicked in which wasn't much about flavour doing Coke all sorts of damage, so they reverted. The conversion to corn syrup was mostly just a dumb luck coincidence around the same time. But the corn syrup saved them a lot of money, and the reversion to Original Coke ended up a publicity goldmine. But there was a lot of dumb luck in that.
We still use conventional sucrose for the sugar in Europe. I think it's superior to corn syrup.
Ten years ago, Disney made one of the biggest flops of all time: John Carter (2012)
Gross Budget $306.6 million
Box Office $284.1 million.
This should have been a soft ball. This character helped inspire the creation of Superman and Star Wars.
For myself, I disliked that I didn't really understand the parameters of what the bad guys could do. So much else of it was terrific.
Poor marketing is blamed for the films financial failure. There is a number of fan trailers out there that are better than the real ones.
Example:
At least it didn't damage the entire industry as Heaven's Gate did.
Gross Budget $306.6 million
Box Office $284.1 million.
This should have been a soft ball. This character helped inspire the creation of Superman and Star Wars.
For myself, I disliked that I didn't really understand the parameters of what the bad guys could do. So much else of it was terrific.
Poor marketing is blamed for the films financial failure. There is a number of fan trailers out there that are better than the real ones.
Example:
At least it didn't damage the entire industry as Heaven's Gate did.
I don't get why they didn't call it something like "John Carter of Mars", since that would at least reinforce that it was a sci-fi film of some sort.
I've never even heard of that film, but it looks like a lot of fun! I'll have to track it down this weekend.
It actually was named John Carter of Mars at first...but then the movie Mars Needs Moms flopped at the box office, which Disney thought was due in part to its title, and therefore dropped "Mars". They also didn't go with the actual book title A Princess of Mars, because they thought it sounded too much like a chick flick.
There is not much surprise in the fact that the marketing director for John Carter and the Walt Disney Studios chairman at the time both lost their jobs over this film.
Not sure it is fair to put this here. Those trying to short sell Gamestop stock didn't necessarily make a bad decision. They were attacked by pissed off Reddit people.
The financial fallout was spectacular.
en.wikipedia.org
EDIT: Philosopher Stefan Molyneux reads a letter seemingly penned by one of the instigators of the Gamestop Short Squeeze Rebellion of 2021
The financial fallout was spectacular.
GameStop short squeeze - Wikipedia
en.wikipedia.org
EDIT: Philosopher Stefan Molyneux reads a letter seemingly penned by one of the instigators of the Gamestop Short Squeeze Rebellion of 2021
So split the difference and call it John Carter and the Princess of Mars.
It is. Not a great film by any means, but more watchable than a lot of the rubbish that goes on to rake in millions nowdays.
Mind, the magic bad guys were weird and unexplained and really not like that in the later books where they appear.
You'd think that, wouldn't you? But again, they had to drop Mars from the title because, with Mars Needs Moms bombing, CLEARLY audiences weren't interested in movies that involved Mars. Couldn't have anything to do with that movie just not being very good.