The term ‘bankruptcy’ is feared in both businesses and by entrepreneurs.
The mere fact that your company is headed towards such a phase is even more terrifying. The concerning issue here is how to overcome and move forward once you’ve hit that unfortunate curve in your journey.
There are many techniques that you can apply to pull your company out of such a situation. But more than just terminologies, there are also stories that can inspire and motivate us to never lose hope if we ever hit the low.
Here are 5 companies that you never thought would ever have to face bankruptcy, and the lessons they took away from managing to turn things around.
Apple is one of the world’s most renowned and fast-moving tech firms with millions of followers, as well as the ever-inspiring Steve Jobs.
But what you might not have known is that Steve Jobs was fired in 1985 and after that, the company suffered a fair amount of losses before he was rehired after 12 years.
When Microsoft released Windows 3.1 in 1993 and subsequently Windows 95, “it became a real competitor for Mac OS“. Apple, lost not only its customers to Microsoft but also fell behind in the market. According to Business Insider, Microsoft’s “low-cost personal computers” was a global sellout and overtook Apple quickly. As a result, “Apple went from being the wealthy market leader to an also-ran in the blink of an eye“.
Apple’s turning point came when they rehired Steve Jobs, who managed to secure $150 million from Microsoft to invest in Apple. A year later the iMac hit the markets and “for the first time since 1995, [Apple] returned to profitability“.
From the iconic Spider-Man to Captain America, Marvel has been a huge player in the comic book and character industry.
But when the comic market crashed in the mid-1990s, it also brought down Marvel’s well-established positioning. This prompted “Marvel to file for bankruptcy” as its alliances were being shuffled about its debt holders.
However, the crisis took a turn for the better when Avi Arad “wooed bankers with a stirring speech about the value of Marvel’s characters“. He not only managed to convince them of the value of Marvel’s superheros, but also introduced the idea of making movies based on them.
The rest is history and “today, Iron Man, the Avengers, Spider-Man, and X-Men are all billion-dollar franchises“.
The world’s largest coffeehouse with more than 23,000 stores in 72 countries, but even they had their lowest moments.
CEO Howard Schultz, grew the firm into a strong player with his hard work and loyalty, but this growth was too much, too fast. In early 2007, after the company had grown from 5,000 stores to 15,000, its stock also dropped 42%.
In response, Schultz closed 7,100 Starbuck outlets for three and a half hours to train baristas on how to make the “perfect espresso“. Moreover, he got down to the customers’ level by inviting them to email him personally with their feedback. And they did. With 5,000 emails.
Howard Schultz’s decision to connect with consumers showed how important it is to fully understand the needs of customers. The fact that he as the CEO, was willing to come down to the customer level also reflected well on his dedication to the company, and would go a long way in endearing the brand to the public.
And today, “Starbucks has more than $10 billion in revenue.”
Nintendo reminds us of our childhood days when the Game Boy was first introduced. There was a wave of fan following, and Game Boys were being sold at a rapid rate.
Nevertheless, even Nintendo couldn’t escape the competitive digital gaming market. Nintendo faced serious competition from both Sony and Microsoft when they launched the ever-popular PS2 and the Xbox. People left their Game Boys by the side and decided to invest in these new digital gaming gadgets instead.
Nintendo suffered grave losses as it lost its loyal customers and fan following. The turnaround came when Nintendo decided to move a step forward and “embraced its individuality with the DS, DS Lite, and Wii” and went on to “sell around 100 million units worldwide“.
Nintendo’s quick innovation helped it get back into the competition and is surprisingly, still omnipresent in the digital gaming world.
Netflix was only introduced in Singapore this year but it has always been the big thing in the West.
In 2011, CEO Reed Hastings made an announcement saying they “will no longer offer a plan that includes both unlimited streaming and DVDs by mail“. Subscribers would now have to join 2 separate services, and one of them was given the ridiculous name Qwikster.
In response, “more than 800,000 customers fled Netflix in a single quarter“.
Once Netflix realised how much their abrupt decision had cost them, they not only apologised to users but also withdrew Qwikster. However, redemption would only come later in 2013 with their original series House of Cards.
Sometimes, big enterprises may take sudden decisions which might not be beneficial in the long run and end up incurring more losses than profit. But that does not mean that there will no way to reverse the situation.
Timing Is What Matters
According to Ellen DeGeneres, “it’s failure that gives you the proper perspective on success“.
Failure is inevitable and rather than shying away from it, accept it. It will teach you the essence and determination it takes for one to achieve success, all over again.
The one common thing in the comebacks of these companies was their ability to quickly identify the issue without too much delaying. This enabled them to come up with a recovery plan in the shortest time possible.
The implementation might take time plus, it is important to keep track of the market’s reaction once the changes have been made. But with the right timing and patience, an enterprise will be able to reinsert itself into the market.
If big enterprises like these could make such impressive comebacks, one ought to learn and be inspired from them as there is so much to take away from their struggles and ultimately, their success.
Feature Image Credit:timedotcom, TechCrunch, denofgeek, Franchisopedia, Adweek.