Darwin was right … those who adapt will survive and in the race to survival smaller species seem better placed. This seems also to be true for firms. The biggest ones are not –always- the most resistant to shocks and the quickest to change.
Browsing recently through my archives I found back the articles that the Italian press dedicated to Richard Ginori, a eighteenth century firm that went bankrupt in early 2013. Richard Ginori, a porcelain manufactory, was established in 1735 near Florence and became known for its luxury products which were sold, among others, to the Pope. It was a shock for the Italians when this manufactory declared its bankruptcy in February 2013 with hundreds of workers losing their jobs.
Although Wikipedia will give you plenty of information about the history of the brand, you’ll find relatively little on the reasons of the bankruptcy.
Here it is. The company underwent a rich history of events and the last important milestone was actually set in 2006. That year the manufactory was bought by Bormioli Rocco & Figli, the management of which decided to change the product portfolio to allow for a broader distribution in supermarkets. This decision, as the next 6 years showed, was actually the death warrant of the 278-year old company which moved downwards from an exclusive and luxury brand to a middle tier one. It faced the pressure of supermarkets to squeeze prices and ran into competition with lower quality products made in Asia. The company was trapped and lost its DNA in this strategy change. Death followed quickly.
Advice for your marketing strategy
The story of Richard Ginori is one among many others (think for instance about BlackBerry which, in the matter of slightly more than 10 years, went from being one of the most adored companies in the world to an unprofitable firm. Fortunately there are also some more happy examples of companies embracing a strategy move (think about Volkswagen in the 90’s for instance). Some firms even went back and forth from successes to failures : think about Nokia for instance (currently recovering with its Lumia but still in very bad shape a few months ago) and of course Apple (I actually don’t know in which phase they are currently in but this is certainly not the most fortunate one).
This tells us that firms must monitor continuously what their customers are doing, willing, and where they are heading to. And firms must be ready to cope with changes at all levels to cope with the development of new habits, new trends that may endanger their business model. Market research in general and consumer behavior analysis help discover those trends and habits; yet analyzing the market is usually done when launching a new business and too rarely performed in the course of a firm’s activity. When we give trainings on market research techniques we always insist to apply these tools regularly (once every 6 or 12 months for instance) so systematically detect new opportunities. Market surveys are especially useful for this; the “instrument” enabling the administration of the survey is usually standardized and it becomes easier to collect data on a regular basis.Tags: firms in difficulties, market research belgium, marketing strategy