From Apple to Starbucks to Lego, these highly successful companies of
today battled huge losses before coming out on top!
Failure is an inevitable part of business world. There are very few businesses that are seen to succeed in one go or make it big without experiencing considerable number of failures. Rather, when we talk about some of the popular and biggest businesses such as Apple, Lego, Starbucks, FedEx, and Marvel; the one shared thread that we recognize amongst them is that how these companies had to face huge failures and lost their valuable money/investment before carving a landmark success story for themselves in the business world.
Let us now dwell a little further
and understand what exactly went wrong with these businesses and what growth
strategies they adopted which eventually helped them to bounce back again.
# APPLE
“The market penetration strategy
adopted by Apple is all about amalgamation of ingenious product development
along with powerful marketing, pricing strategy, and community leveraging”
The first name that comes to mind
which turned its tables from being on the verge of getting bankrupt to being
the most successful companies in the world is certainly APPLE. The success
story of Apple is nothing less than an inspiration for many entrepreneurs world
over. The company reached an early momentum with coming up of truly unique and
innovative products, but eventually experienced a major fall and started losing
its market. This was mainly attributed to the exit of its founder Steve Jobs
coupled with lack of innovation and falling short of customer’s needs;
resultantly popularity and demand of its products plunged.
Rather, in 1997 Apple was on the
brink of bankruptcy. But, then with implementation of right growth strategies
which focused on market penetration it bounced back and today has become the
first $1 trillion company. Basically, the company focused on coming out with
its famous core product, the iPhone and developing the strategy for increasing
its sales every year. For this it focused on amalgamation of innovation along
with powerful marketing and pricing strategy and of course community
leveraging.
Over the years, it has consistently introduced new versions of iPhones with added enhancements and upgrades, including releasing its high-end iPhone X. As a result of its market penetration, Apple has a larger market share than all of its competitors combined with over 50 percent market share in 2021. Understandably, Apple focussed on developing a loyal customer base with powerful marketing strategy and emotional engagement with its customers. And, so whenever the company comes up with a new iPhone model every year, these loyal customers (who have become fully dedicated to the brand) are the early ones to buy the phone; even though the product price is higher as compared to other competitor models.
To add to this, with successful
rebranding campaign, launch of new products such as iMac, iPod, and iPad and
the constant revamping of consumer expectations, Apple has gradually turned
itself around to become one of the biggest tech organization in the world.
However, this happened, only after a 12-year downward period and several
product flops.
# STARBUCKS
“The market penetration strategy of
Starbucks is based on quality based differentiation, customer orientation,
embracing of technology to engage customers better, and offering sales
promotions.”
Another one such example to
consider is that of STARBUCKS which though today is one successful coffee
giant, but it once faced a serious financial crisis. This happened in 2008 when
owing to extensive overexpansion plans, growing coffee competition, cheaper
options for customers and higher cost of dairy products, the coffee giant
witnessed a huge slump in business. However, it quickly took action by focusing
on quality based differentiation (enhanced coffee quality), ad campaigns,
reorganizing of supply chains and even closing number of outlets, which helped
in turning things in its favor. Another thing it did was reworking on its
market penetration strategy to understand where it was going wrong. So, it
started customer oriented products, such as premium coffee, tea, cappuccino,
and espresso, building personal relationships with customers, embracing
technology to engage customers better, and offering sales promotions such as a
free Frappuccino which worked in its favor, thereby reigniting the brand trust.
Resultantly, today it has become one of the prime coffee brands in the world. As on date, Starbucks boosts of having presence in more than 80 countries with over 32,000 stores worldwide. In order to grow and maximize its revenues in these current markets, the brand implements market penetration by opening more Starbucks owned outlets or licensed and franchised cafes.
# LEGO
“The market penetration strategy
implemented is based on knowing the targeted audience, innovative products to
appeal all customer segments, digitalization, and entering new markets with
existing products”
And lastly how can we forget not to
mention the case of LEGO which went from nearly being bankrupt to becoming the
most powerful brand in the world today. The company found itself in financial
calamitous state in the early 2000s, with the company even selling some
products for less than they cost to manufacture. One of the major reason was
LEGO losing it sight in identifying of its target audience; resultantly they
made groundless assumptions leading to coming out with products which were not
at all in sync with their customers’ needs and wants.
But, then a corporate restructuring, well-researched innovative products based on targeted audience along with resorting to streamlined operations, helped LEGO to regain its focus, thereby making it one of the largest brand comebacks of all time. Further, implementation of new market penetration strategy which focused on offering plethora of products specifically designed to appeal all the customers segments in order to reach out to substantial range of customers coupled with entering new markets such as China and India with exiting products really helped in making things work rightly in its favour. And, today it is at the top again!
“We need to constantly become
better, or otherwise there will be someone out there who will catch up to us.”
- Knudstorp, former CEO of LEGO
Besides, in order to ensure that
existing customers keep purchasing its products, the company reintroduces 60-65
percent of their existing sets every year. They also offer several large and
complex sets targeted to teenagers and adults to increase their sales.
Failure is not the end of the road, even if it seems like it!
While, undoubtedly failures or
let-downs in business can indeed be discouraging and at times making one feel
that that you have hit the end of the road, but such is not the case. Just take
a look at these businesses who failed miserably before becoming a success
story. Failures, on the contrary if taken
in a positive stride, provide valuable lessons and experiences that can pave
the way to the success road. It is just a sign of what you have been doing
wrong which could be with regards to not listening to your targeted audience,
over expanding of your business too soon, wrong spending of resources or maybe
not finding your product-market fit. The underlying principle is to understand
as to what went wrong and what needs to be avoided or altered in the future in
order to avoid a recurrence. As Henry Ford rightly said, “failure is the opportunity
to begin again more intelligently”.
So, which of the growth strategies of these three biggest brands of the world has impressed you the most? Comment Below.
