What are the reasons for the demise of different corporations?
What are the reasons for the demise of different corporations
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What are the reasons for the demise of different corporations?
Reason 1. Poor service - Most big industries live under certain myths and woolgathering to the market realities. They are just drumming beating their product and services without having any grasp of the market demand and the reality. Just by saying and promoting that, your products and services will bring about a transformation and a result in the bottom line will not work for the corporations. Calling poor service good not in tuned with demand will only further harm the company.
Reason 2. Narrow definition - Another problem is that most corporations defines itself too narrowly that they are in a particular business and that is their core competency. First and foremost thing according to me is that there is no core competency there is only one competency that is your competitive competency.
Industries that deduce that they are riding some computerized growth escalator forever descend into stagnation and downfall. The history of every growth industry illustrates a self-deceiving cycle of swift expansion and undetected demise. Mergers and acquisitions do not make you better. They make you better only if they are able to generate synergies between the operations. No business is forever. Sticking to old theories and creating an elephant is going to lead to the dooms day.
Reason 3. The belief that the growth is assured by an expanding and more affluent population- this is true if the market is growing, as there is no problem to generate demand as the market will generate it on itself. The problem is that when market is booming it will generate a lot of competition. In order to counter the competition companies embark on to sell their product and service as quickly as possible without keeping in view the customer. Companies' sell whatever they are making or manufacturing rather than making what the customer wants. The result is that the first instance the customer finds a better product company find themselves in lurch. By that time, it is already too late!
Reason 4. The belief that there is no competitive substitute for the industry's major product- If you live under the dilemma that you are the best and there can be no competition for your product and services then very soon, you will be sitting out. Another reason the fact and it is very true in the case of big companies that they do not really understand their customers. It is easy to ride along on institutive guesswork over the years, assuming you know what your customers will and will not buy. It is also easy to get surprised-either by your competitors or by your customers.
Catching the needs and want of the public is paramount.
Reason 5. To much faith in mass production and in the advantage of rapidly declining unit Companies live under the dilemma that if they produce the goods in bulk there unit cost will decrease due to economies of scale and it can formulate or sustain their market position. It is true that with mass production, the unit cost will go down but it is also true that as production increase the firm focus shifts from satisfying customer needs to selling the product as much as possible in the shortest period. What really is emphasized is selling, nor marketing. Marketing is a science, which takes into account customer views and perception and provides them what they really want. Thus, there is a difference in selling a product or satisfying customer needs. Companies should introspect themselves from time to time so that they do not make strategic mistakes.
Reason 6. Poor communication- Poor communication is also one of the main reasons for the demise of the different companies. Communications should be transmitted through many mediums. One of the key adages of communication is that rumor fills a vacuum. If communication is not kept up throughout the life of the engagement, gossip and hearsay will take the pace of the fact. Communication should be clear and well communicated down the line.
Reason 7. Preoccupation with a product that leads itself to carefully controlled scientific experimentation, improvement and cost reduction- Companies spend too much of money on scientific research and development and finally they turn out to be a research lab without any understanding of the product and of the customer.
Reason 8. Strategy innovation had failed- Companies failed to innovate and solve problem in the way the customer wanted them to be solved. Firms failed to implement Strategy innovation strategy, which involves minor changes to the firm's business model or a radical departure, as when a firm decides to market its existing products and services to new customer groups.
Reason 9. CRM panacea- Another interesting fact is about Customer relationship management, which is very often incarcerated to improving customer service, which in fact is a small part. The big picture is finding out who are the most profitable customers and focusing on them. Investing in solutions like ERP, CRM requires proper training and orientation is like cooking a meal by connecting the fridge and the supermarket. This is one of the reasons why so many ERP packages fail to deliver. The rule that applies never look for efficiency over effectiveness.
Customer satisfaction: Define expectation + over deliver on them +credit
Reason 10. Narrow focus- Industry defines itself too narrowly and focuses on their core business regardless of the fact that there is a constant change in technology, demand, customer perception and demand of particular kind of goods and services. If a firm defines it too narrowly, they think that they are in business, which is bound to grow, and there will be no competition in future and the customer is bound to utilize or purchase the goods and services, which they produce. This is a bad attitude and this shows that companies do not care for the customers. Companies must realize that it is customer who is driving there industry and if they don't care for his desires and wishes he will move to a better product and services form the competitor or the new market entrant as soon as they are launched.
Reason 11.Change Management problem- Companies undertake change management philosophy to improve productivity, efficiency, and quality. Change management is an intervention process that focuses on continuous improvement. The evolution has to be planned, managed, implemented and monitored to bring about success. It is a cross-functional; management led philosophy, which results in improved customer satisfaction.
Reason 12. SCM and R&D dilemma - there also seems to be a serious gap between the SCM and R&D. Close consistency was missing which resulted in
Delayed introduction of new or modified product features in response to demand and competitor action.
Delayed formation of temporary strategic partnerships, alliances
Non-interactive customer relationships.
Non- Dynamic configuration of production processes.
Poor information integration, real time accessibility to reduces the bullwhip effect.
Non-flexibility in supply chain management.
Poor integration in the back end back-end operations product design and development, procurement, production, inventory, distribution, after-sales service support, and even marketing
Poor, collaborative planning, MRP, JIT, TQM, vendor management inventory, collaborative product and forecast replenishment (CPRF)
Reason 13. Poor Management - Management fails to see that the strategies, which they need for success, keep changing and so goes for the measurement of those strategies.
Robin Trehan
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