If you observe the global news, beside the COVID-19 pandemic and related recovery and reset, Russia-Ukraine conflict, US-China trade war, then restructuring in the various form if you read in the theme, you will notice for the past 2 years alone, has most of the capital intensive business happen here and there. Whether restructuring by insolvency or under the investor pressure to sell or being acquired by another company in a variety of methods. Some are waiting for the government intervention and rescue, some are renamed at this point of time. Some are acquisitions to diversify from their existing business, such as from chip making or airlines. Some acquired traditional business or technology companies once upon a time had a glorious past, but were not able to catch up with the changing market and started to decline business.
Acquiring competitor business to eliminate market competition is one of the common strategy practices. But as the world and more and more countries implement anti monopoly regulations and laws, it becomes harder to implement it. If you observe carefully, in the market, they have a lot of traditional business setup that carry forward for their glory past. Whether or not relevant to current and future only a couple years from now can be told. Whether it is inertia for human nature, or too risky to lead the innovation, only in the future can tell.
But history repeatedly tells us a lesson: inertia and lack of innovation, or you miss catching the next wave of big things, it has a huge impact for the company. No product can remain in the leadership over a long period of time. Next generation of products once in the market will disrupt the existing market.
The world entered the Digital Economy in 1995, and since then, more and more business transactions and digital products are traded via the Digital Channel. If you recall from the past, once upon a time, software products needed to have nice physical packaging, until now the norm of digital download. Same goes for CD albums to digital music stores, and now music stream subscription.
For those generations of 8x and 9x will know the rise and fall of the original internet empire Yahoo. From the decline the invitation to buy Google for USD 1 million and look down on the power of the search. Now everyone knows, in terms of internet search, Google search is de factor number 1. Everyone using Yahoo Search nowadays? 5 years later from decline to buy Google at USD 1 million, acquisition price of USD 3 billions, but again, Yahoo made another strategy mistake to buy it at that time. As everyone knows, Yahoo has collapsed, and Google is valued at over USD 1.437 Trillions now in 2022.
Failure to buy Facebook at USD 1 billion, is another well known classic strategy mistake. Most people cited Yahoo somehow along the years lack of suitable CEO, repeatedly made “immature” decisions, where all lack “strategic vision”. Refused to sell to Microsoft at USD 44 billions in 2008 and ended up selling at USD 4.8 billions to Verizon in 2017. Of course it got more such as acquired Flickr and Tumblr, but end up not knowing what to do with them and end up selling them. Perceived themselves as a media company by making money based on advertising rather than such as a technology company sell software, end up entire company is focus on keep buying 3rd party company and end up not knowing how to used what they own. It is just one of the lessons in history. But we hope to provide insight here, as the theme is the same. It involved change in the market, and inertia and inability to make disruptive innovation or catch the next wave of big things. It once again proves to the world, regardless of how big you are, it will never be static and changeless. The dynamic nature of the market makes the rise and fall of great companies.
E-SPIN Group in the enterprise ICT solution supply, consultancy, project management, training and maintenance for corporation and government agencies did business across the region and via the channel. Feel free to contact E-SPIN for your project requirement and inquiry.
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