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There are multiple factors working behind the scenes which catalyse either positively or negatively to impact on various sorts of businesses. Lack of a good leader to pioneer the project forward is the main reason.
Bad team work also arises out of this cause. Secondly, Lack of funds or capital loss would be the next immediate reason for failure. Thirdly, poor focus on the customers' desires or failure in identifying the niche customers for the business also leads to overall business failure. While the other businesses flourish because of high customer satisfaction.
One of the most striking and puzzling phenomena in the business world is that when successful companies experience major changes in their environment, they fail to adapt.As a result of this failure, and the inability of these companies to defend themselves against competitors armed with new products, new technologies or new policies, their sales are falling, their gains are eroded and their best human assets are leaving, and the value of their shares is falling. Some of them can recover, after painful rounds of downsizing. Business and restructuring, but most are not recovering.Why then do big companies fail? It is always assumed that the problem lies in paralysis. When companies face sudden changes in working conditions, the company freezes, such as the gazelle, which is frozen in front of the car lights, but this assumption is not always supported by facts. The writer found only a limited number of evidence of paralysis. On the contrary, the managers of these companies were aware of these risks early, analyzed the consequences for the business, and launched a series of hasty measures in the face of it.The problem is not in the inability to take action, but in the inability to take proper action, there may be several reasons for the problem, ranging from administrative obstinacy to inefficiency, but one of the most common causes is what is called: active inertia, The self is usually immobile (imagine a stationary pool ball on the table), but physicists also use the term to refer to the insistence of moving objects to stay in motion.Active inertia is the tendency of institutions to adopt stable behavioral patterns. Even in the face of violent environmental changes, the largest companies in the market remain locked in the ways of thinking and work that have had successes in the past, speed up previously tried activities and try to get out of the hole. The truth on falling deeper.It is likely that if the managers assume that their enemy is paralysis, they will automatically conclude that the best defense is the movement, but if they finally understand that the movement itself may be the enemy, they will review their assumptions before any They will also automatically gain a better understanding of what they need to achieve, and likewise prevent them from achieving it, thereby reducing the chances of joining the ranks of their failed leaders.Victims of active inertia:To test the potential destructive effect of active inertia, Firestone Tire & Rubber, which led the market in its industry, hopes to face the challenge of change, not because it has not taken action, but because it has not taken the appropriate action.In the early 1970's, Firestone had seven decades of uninterrupted growth and rose to the throne of the burgeoning tire industry in the United States, along with Goodyear, its competitor in Akron, Ohio. Firestone executives had a clear vision of their company's position and strategy, That the three largest automakers in Detroit are their main customers, and that Goodyear and other tire makers in America are their competitors, and that their only challenge was keeping pace with the steady growth in tire demand.The success of the company was rooted, and its culture and operations reflected the vision of its founder, Harvey Firestone, who insisted on treating his customers and employees as part of the Firestone family. The Firestone Country Club opened its doors to all employees, regardless of their position. Harvey himself made close friendships with managers. Executives of the largest automakers (even his granddaughter married Henry Ford's grandson), Firestone made very loyal managers by incorporating them in the values of the family business and satiating them by seeing the world that Akron is the center of the world.The company's operations and capitalization were designed to capitalize on the growing demand for tires by increasing new production capacity. For example, during budget preparation, first-line staff (sales and marketing) identify opportunities in the market and turn these opportunities into offers for investment in additional production capacity , Middle-class managers then choose the most promising opportunities and present them to the executives, who were inclined to agree quickly to the middle-class recommendations.The firm's success has given the company a strong and unified sense of its strategies, values, relationships with its customers, employees, operations and investments. In short, the company has a clear formula for success that has proven effective since the turn of the century.But overnight, everything changed. A French company, Michelin, introduced the radial tire to the US market (meaning that the internal wire matrix of the frame is perpendicular to the direction of movement and parallel to the radius of the frame) and based on the superior design , The semi-diagonal tires were safer and longer lifespan. Besides being more economical than the usual tires, which are parallel tires (ie, the wire matrix is parallel to the direction of movement), Michelin already managed to take over European markets. When Ford announced in 1972 That all of its new cars will contain the Pulleys half the country, it was clear that Michelin was on its way to acquire also the US market.Firestone was not surprised by the invention of the country's tires. Through its massive operations in Europe, Firestone itself witnessed the rapid adoption of European tires in the 1960s. Firestone predicted the rapid spread of these tires between US manufacturers and consumers. , And took action
Why a business fails
1, Poor Management
2, lack of proper capital Management
3, failing to adapt new things (for example Nokia & Blackberry fail to compete with the smartphones which having Android software)
4, loosing customer focus
5, lack of future vision
6, lack of quality in product or service
7, fails to get customer feedbacks
Why some businesses become sucessful
1, Have excellent vision (Apple & Tesla)
2, Focusing on a key area : For example Samsung and LG both are making smartphones and home appliances. Samsung more focused on smart phones so they are very sucessful in that area while LG more focused on Home appliances and they are sucessful in that area
3, Adapting new things very fast : Samsung perfectly used Android system and they become sucessful in smartphone sales
4, Giving Excellent customer services
5, Always keen for customer feedback
It all has to do with customer service. A happy client tells 3 to 5 about his/her experience while an unhappy customer tell over 30.. specially now with social media it propages very fast and get to millions of viewers.
Never let 1 client go unhappy. It takes 3 to 6 months to see results good or bad.
