We’ve often heard success stories of the world’s biggest market leaders like Amazon, Apple, Samsung, Microsoft, Facebook, among others.
Several businesses look up to them for inspiration and a sense of direction.
There are quite a number of case studies on their business strategies and how these strategies can be adopted in enhancing business growth.
However, in building a great product, one has to understand why products can fail or perform terribly in the market.
There are a couple of products that had the largest market share for decades but later failed terribly in the market.
One might wonder what went wrong? Big companies like Kodak, Nokia , and Toys R Us made billions of dollars in revenue for years.
They were the leading brands in their industries at some point, but still got thrown out of business by their competitors.
Nokia, in 1998 became the bestselling mobile brand in the world and its revenue shot up significantly from $1 billion in 1995 to almost $4 billion in 1999.
The Nokia 1100 was the bestselling mobile phone of all time in 2003.
In 2007, Apple introduced the iPhone but Nokia still sold most smartphones around the world while Apple with just 5% of the market share.
In 2010, Nokia introduced new sets of smartphones that were projected to push the iPhone out of business but this was not the case.
Their revenue, however, dropped drastically in that same year and sales kept declining until it was acquired by Microsoft in 2013.
How and why did Nokia fail after being the market leader? Nokia’s products were inferior to Apple’s, they clearly lacked vision and their organizational culture stifled their ability to innovate.
Kodak was another giant in the photography industry in 1970 but later filed for bankruptcy in 2012.
For hundreds of years, Kodak was at the forefront of photography with dozens of innovations and inventions accessible to their consumer.
Its core product was film and printing of photos. In 1956, Kodak became more dominant and practically pushed their competitors off the market.
However, the rise of digital photography in the late 1980s took a toll on sales of analog cameras.
By 1984, customers switched to Fuji because it provided more value in terms of addressing customer behavior and was also 20% cheaper.
The biggest turning point for the industry was photography moving away from analog to digital which Kodak was not ready for.
Smartphones also took the world by storm and consumers went from printing pictures to storing and sharing pictures on social media platforms.
Even though Kodak jumped on the digital trend bandwagon, it was late and Kodak was still focused on printing while selling analog cameras and film. Kodak failed to reinvent itself and was complacent.
Toys R Us is no different from Nokia & Kodak. Toys R Us also faced the wave of digital movement, where consumers were leaning towards digital devices instead of toys.
Amidst the rising interest in e-commerce, Toys R Us failed to adjust and adapt. They also failed to keep up with the changes the industry was going through.
They failed to innovate unlike their competitors did to adapt to the changing preferences and buying habits of the new generation.
These companies had enough market power to reinvent themselves in a way that embraced both innovation and changing behaviors of customers.
They had enough room and finances to try new things and leverage on their selling power.
However, they failed to see beyond the value they were already offering. Change is inevitable and as such products should be modeled in a way to embrace change.
Currently, in Ghana there’s been a rise in online payment platforms and this market is getting more saturated as consumers get more comfortable with using these platforms.
The new wave of going cashless also contributes to this saturation.
As such, banks and mobile network providers are now creating their payment services for both money transfers and bill payments such as water and electricity bills.
DreamOval offers financial solutions for banks and other fintechs looking to maintain an edge on the market and find creative solutions for a moving market.
As competition gets tougher and the market gets saturated, how is Dreamoval offering its experience to bring value to the brands it supports? We can think that all these banks, financial institutions and mobile service networks will be offering the same services as online payment platforms.
Will that mean these payment platforms will be kicked out of business? How will that affect their business model? How prepared are these payment platforms for this major wave? Will there be another Nokia, Kodak, or Toys R Us? It is therefore important for all these online payment platforms to start thinking of ways to create unique experiences for their customers.
We are innovating and bringing change to the financial industry through Billbox. Billbox is a secured bill payment system that enables integration into bill payment services beyond Ghana.
Through Billbox, our solutions have been able to adapt to additional African markets such as Zimbabwe, Cote d’Ivoire and other African regions.
With the recent launch of remittance services by Billbox (Billbox Remit), our network of financial institutions are leveraging this technology to provide remittance services to their customers and partner bank’s customers seamlessly.
What can we learn from the demise of these companies?
Businesses should be prepared to shift from protecting their competitive advantages to making a revolutionary change.
To develop a great product, it is relevant to understand the industry you are in, the trends, and the changing behaviors of customers.
At this stage, market research is very key and businesses should seek to take advantage of the data available in the market from consumers and their competitors.
It is also relevant to understand the level of customer satisfaction with your product features, functions, and service to continually satisfy their needs.
Kodak for instance saw the disruptive forces affecting their industries but failed to realize sharing photos online was the new business not an opportunity to expand their printing business.
An organizational culture that embraces change and ensures innovators have enough voices to be heard and listened to at the top contributes to building a great product.
In the case of Nokia and Toys R Us, their organizational culture stifled their ability to innovate.
They were internally aware of the changes but there was no urgency from the top to reinvent the wheel.
The vision of company leaders can help get the right mix of strategies that would help in future growth.
A company that is established without vision and goals will most likely be highly dependent on outside factors and these factors could either make a product a success or ruin it.
The latter usually happens, because in a world where technology constantly evolves, it is best to have a sense of direction and focus.
A sense of direction helps the business to differentiate between fads and futuristic technology so as to invest wisely.
To achieve the above, businesses must have the right product organization. Businesses need the right people for the right role to conduct better product testing, measure data, define features, iterate on product development, and manage the development process.
Author : Nura Abdul-Rahman
Project Manager, DreamOval Limited