Every company takes risks and steps out of their area to try to enter markets and develop new products. The article Seven Ways to Fail Big really resonated with me and made me think of so many current and past companies that have failed at one or more of the seven ways.
I worked 84 Lumber for several years, with the competition of Lowe’s and Home Depot, it seemed as though they could never keep up, especially after the about $2 billion loss they took when the housing market crashed. 84 Lumber is essentially a lumber yard targeting contractors whereas Lowes and Home Depot are retail home improvement and appliance stores. However, in 2011, 84 Lumber launched a new store layout to now begin to attract the do-it-yourselfers that are shopping at Lowes and Home Depot; introducing design studios, pain, plumbing, grills, plants, etc. They are looking to incorporate this retail aspect into about 70 existing stores however, as in the article, did they stubbornly stay the course to long as a direct supplier to contractors before entering the world of retail. This was a strategic move my Maggie Hardy to help bounce back from the housing market crash and build their place in the retail competition. So far, it seems to be successful, their website boasts that they are now the nation’s leading privately held supplier to both contractors and do-it-yourselfers.
When a think of a company that tried to enter a market and sell a new product to existing customers (pseudo-adjacencies), I think of Amazon and the Fire phone. Amazon is the best at what it does – internet based retailer providing quick services. I think Amazon did a lot of good strategic moves as they went from an online bookstore and began to diversify in to downloading/streaming and then through its way into retail. The one area that they tried to enter too late in the game and what proved to be out of their wheel house was cell phones. Apply and Samsung dominate the cell phone industry and when Amazon tried to enter their Fire phone with 3D imaging and very high price tag, it never could compete. It tried to target the phone at current amazon prime customers but failed and they took a loss of $170 million.
Another example I think of is Blockbuster Video. The once flourishing brick and mortar video rental store is now non-existent. When Netflix and Redbox came about, they waited too long to get into the game and ended to their demise. You could also say the same about Ames, instead of competing with Wal-Mart, they started gobbling up Hills and other stores and acquired so much that they were saturated and unable to keep up with Wal-Mart.
It was interesting to see two companies, Southwest and GE, which took strategic steps at the right time who were not afraid to turn away from something that did not align with their specific strategy, mission, and values.