New answer to What is the biggest mistake that a big company has made?”

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New answer to ““What is the biggest mis­take that a big com­pany has made?””

New Answer
What is the biggest mis­take that a big com­pany has made?
Abdi Ismail Aabi
Abdi Ismail Aabi, His­tory enthu­si­ast | Con­form­ist | Mech­an­ic­al Engin­eer­ing Major
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Nike vs Adi­das In 1984, Michael Jord­an who was a young rising super­star at the time signed a con­tract with Nike after Adi­das failed to sign the rook­ie. As many sports experts pre­dicted, the Air Jord­an gen­er­ated bil­lions of dol­lars for Nike even after he retired while Adi­das declined. This may not seem a mis­take to some of you, but as someone who fol­lows sports on a daily basis, this is the biggest mis­take made by Adi­das.

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New Answer
What is the biggest mis­take that a big com­pany has made?
Shoaib Mah­mud
Shoaib Mah­mud, Busi­ness Con­sult­ant
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It’s a fact of life that people make mis­takes. Even me, and I’m awe­some. How­ever, whenev­er we’re facing a big screwup we’ve made or deal­ing with the reper­cus­sions of another error, it’s easy to for­get that mis­takes are a part of life. For­tu­nately, for most people, our greatest mis­takes on the job are minus­cule com­pared to some of the biggest blun­ders in busi­ness his­tory. It’s even com­fort­ing to know that some of the richest people in the world have made costly errors but went on to accom­plish great things. Here are eight of the biggest and cost­li­est mis­takes in busi­ness his­tory. 1. Excite could have bought Google for less than $1 mil­lion. Back in 1999, Excite was the No. 2 search engine and Google was the new kid on the block. Larry Page offered to sell Google to Excite for $750,000 (though with the stip­u­la­tion that Excite would replace their tech­no­logy with Google Search tech). There are sev­er­al pos­sible explan­a­tions for why Excite made this choice, but the end res­ult is clear. Excite was even­tu­ally bought by Ask-com — What’s Your Ques­tion?, which has a less than 2 per­cent share of the search mar­ket. Google has more than 60 per­cent of the U.S. search mar­ket share and much lar­ger share world­wide. And Google has more than $130 bil­lion in assets, so it’s worth more than 173,333 times what Excite would have paid for it. 2. Daimler-Benz loses $20 bil­lion on Chrysler. Though Chrysler has always been one of the big three auto­makers in the U.S., it has had trouble estab­lish­ing an inter­na­tion­al pres­ence. Daimler-Benz (i.e. Mer­cedes) saw an oppor­tun­ity here and merged with Chrysler at a cost of $30.7 bil­lion in 1998. This didn’t work out as planned. Though it was a the­or­et­ic­al 5050 split, Chrysler sales made up less than a third of rev­en­ue for the merged com­pany in 2006. In the end, Daimler-Benz decided it was bet­ter off without Chrysler and sold 80 per­cent of its stake in 2007 for $7.4 bil­lion. This unhappy trip down mer­ger lane cost Daimler-Benz over $20 bil­lion. 3. Kodak has the first digit­al cam­era back in 1977. Whenev­er tech­no­logy changes the land­scape of an industry, there are some busi­nesses that adapt and thrive and oth­ers that con­tin­ue doing the old thing until it’s too late. For Kodak, who fell from grace due to the advent of digit­al cam­era, the situ­ation is a little dif­fer­ent. Kodak filed a pat­ent for one of the first digit­al cam­er­as (one that used a mag­net­ic cas­sette to store images of about 100kb) back in 1977. How­ever, Kodak made so much money on film, it didn’t intro­duce the tech­no­logy at the time to the pub­lic. Kodak con­tin­ued its focus on tra­di­tion­al film cam­er­as even when it was clear the mar­ket was mov­ing to digit­al. When it finally got into the digit­al mar­ket, Kodak was selling cam­er­as at a loss and still couldn’t make strong gains again­st oth­er man­u­fac­tur­ers who had been pro­du­cing digit­als for years. 4. News Corp has a Myspace melt­down. In a world dom­in­ated by social media, it’s strange that Myspace, one of the grandad­dies of all social media sites, is hardly on the radar. To just say that it got beat by Face­book is over­sim­pli­fy­ing the issue, since many plat­forms cur­rently co-exist with Face­book. While MySpace was still on the rise, in 2005, News Corp bought it, pay­ing $580 mil­lion for the social media site. But News Corp man­aged it badly. The first few years were good and the value of Myspace was estim­ated at $12 bil­lion in 2008. Three years later, Myspace declined dra­mat­ic­ally. It failed to adapt and change with the times and people passed it by for oth­er social net­work­ing exper­i­ences. In 2011, News Corp sold MySpace for just $35 mil­lion, accord­ing to some estim­ates. 5. Block­buster turns down mul­tiple offers to buy Net­flix. It can be hard for some to ima­gine now, but there was a time when video rent­al stores like Block­buster Video were a reg­u­lar part of your week­end plans. Online video stream­ing ser­vices like Net­flix and small kiosk-based rent­al sys­tems like Red­box des­troyed the old video rent­al busi­ness mod­el. Block­buster came to the party late, even though it got an early invite. In 2000, Net­flix pro­posed that it would handle Blockbuster’s online com­pon­ent for it, and Block­buster could host its in-store com­pon­ent (thus elim­in­at­ing the need for mailed DVDs). Accord­ing to an inter­view with former Net­flix CFO Barry McCarthy, ““They just about laughed us out of their office.”” Block­buster went belly up and Net­flix went on to thrive. And since Net­flix is behind such shows as House of Cards, Orange is the New Black, and Dare­dev­il, I’d argue the world is a bet­ter place because of Blockbuster’s blun­der. 6. Grade-school math error costs NASA $125 mil­lion. Decim­als and frac­tions cause head­aches for many school chil­dren, and once, they even sty­mied some of the greatest minds in the coun­try. In 1999, a Mars orbit­er that Lock­heed Mar­tin designed for NASA was lost in space due to a sim­ple error where the engin­eers at Lock­heed used eng­lish meas­ure­ments while the NASA team used met­ric ones. The mis­match led to a form­a­tion on the $125 mil­lion craft mal­func­tion­ing and the probe being lost. Though it was unusu­al for Lock­heed to use eng­lish meas­ure­ments for a NASA design (since NASA has stip­u­lated using met­ric meas­ures for many years), there were still numer­ous occa­sions where the error should have been caught and wasn’t. 7. Quaker loses more than $1 Bil­lion on Snap­ple. You can still find Snap­ple bever­ages at most stores, but in the 90s, Snap­ple was a huge hit at small retail­ers. Quaker thought it could make bil­lions by buy­ing the com­pany and get­ting the pro­duct into more stores. Quaker paid $1.7 bil­lion for Snap­ple, but its plans didn’t work as hoped. Oth­er bever­age makers had noticed Snapple’s rise (and the amount Quaker was will­ing to pay for it) and they weren’t going to stand idly by while Quaker cornered the fruity-drink-in-a-bottle mar­ket. With com­pan­ies like Coca Cola devel­op­ing Fruito­pia in 1994 and the cre­ation of SoBe in 1996, Snap­ple didn’t turn out to be as prof­it­able as Quaker had hoped. In the end, Quaker sold Snap­ple for just $300 mil­lion to Tri­ac in 1997. Three years later, Tri­ac sold Snap­ple to Cad­bury Schweppes for $1.43 bil­lion (to be fair, Cad­bury got more than just Snap­ple). “”‹8. Out-of-con­trol con­trolled burn razes 48,000 acres in New Mex­ico. In order to pre­vent wild­fires from spread­ing too quickly, fire depart­ments and forestry agen­cies use con­trolled burns to remove poten­tial fuel. This went hor­ribly wrong in May 2000, when a con­trolled burn in New Mex­ico got out of hand. The Cer­ro Grande Fire star­ted as a plan to mit­ig­ate some of the wild­fire risk at the Ban­delier Nation­al Monu­ment. The con­di­tions that made the burn a seem­ingly good idea led to the fire spread­ing. In the end, 48,000 acres of land were burned, includ­ing the homes of 400 fam­il­ies. Though offi­cials were try­ing to pre­serve the monu­ment, their mis­take was costly. The GAO estim­ated the dam­ages from the blaze at around $1 bil­lion. These are some monu­ment­ally large and costly mis­takes, but many of the com­pan­ies and organ­iz­a­tions involved are still around and in some cases thriv­ing. It’s a remind­er that rises and falls are a part of busi­ness and life in gen­er­al. As the old say­ing goes, ““Suc­cess is going from fail­ure to fail­ure without los­ing your enthu­si­asm.”” For some busi­ness mis­takes you should try to avoid, read this art­icle on four com­mon Word­Press errors that busi­nesses make.
 — PETER ROESLER
8 of the Biggest Busi­ness Mis­takes in His­tory
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