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7 Companies that Made Catastrophic Strategic Mistakes

Entrepreneurs discovering the target market for their business
These famous companies made massive strategic mistakes and went down in history as some of the worst corporate blunders ever witnessed.

From Blockbuster’s infamous demise to Sears’s slow fade into retail history, many iconic companies have fallen after years of success due to strategic mistakes. What caused them to fall apart suddenly? 

In this blog post, you’ll see how these famous companies made significant strategic mistakes that ultimately led to their downfall. These seven companies ultimately failed due to an inability to adapt to technological disruptions, evolving consumer preferences, or economic uncertainty. 

Now, let’s get down to business. 


Strategic Mistakes: Overlooking Opportunities & Failure to Evolve

Blockbuster failed due to its strategic mistakes

Blockbuster was a leader in the movie rental industry for years, but its refusal to embrace the digital age proved to be its downfall. They had the potential to stay afloat by leveraging mobile technology and streaming services but ultimately failed to keep up with competitors such as Netflix and Redbox. This eventually led to a sharp decline in customer loyalty and business performance – something that couldn’t be reversed despite several attempts at revitalizing the company with new initiatives like no-late fees or lower subscription prices. Blockbuster’s inability to embrace changing technology, customer demands and evolving preferences ultimately doomed them to become yet another example of an iconic brand unable to survive in today’s ever-evolving technological landscape.

If you want to learn more, check out this video: The Decline of Blockbuster…What Happened? – YouTube


Strategic Mistakes: Overlooked International Expansion Opportunities

As of January 2023, cycling startup Peleton is still hanging onto the market for dear life. Initially, a rising star during the early days of the pandemic, the market turned course and Peleton was not prepared. 

Unfortunately, they didn’t pay much attention to opportunities outside the United States until it was too late, missing out on potential growth areas elsewhere.

Peloton could have taken a significant market share had they started international operations sooner. With the rise of e-commerce, the company had access to unprecedented customer data and insights that could have allowed them to make more informed decisions about expanding into other countries. 

Had they seized this opportunity, Peloton would have been able to capitalize on the growing markets outside of the US and gain a competitive edge over its rivals like SoulCycle. Instead, by not paying any attention to these opportunities until it was too late, Peloton left itself open to potential losses due to missed opportunities in growth areas in other countries.


Strategic Mistakes: Underestimating the Technological Disruption

Kodak failed due to its strategic mistakes

Aw, Kodak. Once a pioneering company, now a nostalgic brand that lives in the past.  Unfortunately for Kodak, the strategic mistakes in the face of technological disruption lead to a slow, painful death of an empire.   

Kodak underestimated the rise of digital cameras and other imaging technology – like greatly underestimated. Kodak didn’t recognize the sweeping changes in consumer habits that came with this new digital tech. The company chose to write off the emergence of the digital age as merely a trend and would not impact its market share. It committed a major business sin by assuming customers’ wants and needs instead of researching the market.

As a result, Kodak made a catastrophic strategic mistake and ignored making any adaptions necessary to stay competitive in the camera and photo industry. It was too late when the company recognized its strategy was incorrect. As the pace of change in the digital era accelerated, catching up late was impossible. 

This marked the end of Kodak’s dominance in photography and halted its innovation in imaging products and services. They had been slow to adopt digital technologies, which cost them dearly, eventually disappearing from the market. In the end, Kodak quietly filed for bankruptcy in 2012. 

If you want to learn more about Kodak, check out this video: The Decline of Kodak…What Happened? – YouTube


Strategic Mistakes: Failure to Adapt to the Digital Age

Blackberry failed due to its strategic mistakes

BlackBerry is another prime example of a company that failed to innovate or keep up with trends in its industry. Here smartphone use became ubiquitous, leading to the abandonment of their products for more modern options. As consumers moved away, BlackBerry just wasn’t able to keep up or design attractive enough features compared to their counterparts such as Apple or Samsung.

BlackBerry’s competitive disadvantage became evident when smartphone use became the norm. The company had failed to innovate and keep up with the latest trends, leaving consumers unsatisfied with their products compared to their competitors.

BlackBerry was left in the dust when Apple and Samsung released more powerful and attractive devices with state-of-the-art hardware and software features. Coupled with its lack of appealing design options, this contributed significantly to BlackBerry’s demise as other brands surpassed them in performance and popularity.

The story of Blackberry is a wild one. It’s captured in this excellent read: Losing the Signal: The Untold Story Behind the Spectacular Rise & Extraordinary Fall of Blackberry


Strategic Mistakes: Poorly Executed Rebranding & Lack of Innovation

JCPenny's failed due to strategic mistakes

JCPenney’s gamble backfired when it attempted to revamp its brand image in 2012. The result was a drastic transformation that alienated much of the company’s long-term customer base. Feeling disconnected from JCPenney, customers moved to other stores or opted for the simplicity of online retail. In the end, the company experienced a significant drop in sales. 

Already facing financial pressure, JCPenney was dealt a death blow with the onset of the pandemic. In 2020, after over 100 years in business, the retailer finally declared bankruptcy and was forced to close its doors. This misstep demonstrated how important it is for businesses to understand what their customers want and remain consistent with their branding efforts, as any radical departure may fail to meet desired response.

Want to make sure your business avoids these kinds of strategic mistakes? Take the first steps by conducting a SWOT Analysis. Read more in this post: Conducting a SWOT Analysis? Here are Critical Questions to Consider

Toys R' Us

Strategic Mistakes: Failure to Reach Out to a Younger Generation

Toys R Us Logo

As the market for techy toys grew, Toys R Us surprisingly never transitioned into selling online, nor did they make any effort towards better marketing themselves. Instead, the reigning toy giant opted to stay within traditional retail locations.

As a result, the company could not tap into the benefits of online marketing and sales. Moreover, It lost the opportunity to collaborate with online influencers who could have exposed Toys R Us to a new generation of young consumers and parents. Unable to stay competitive in an increasingly digital age, the company’s sales steadily declined. Much to the dismay of loyal fans who enjoyed visiting physical stores, Toys R Us went bankrupt in 2017.

If you want to learn more, check out this video: The Decline of Toys R Us…What Happened? – YouTube


Strategic Mistakes: Ignoring Changing Consumer Preferences

Sears Logo

Sears could not keep up with its customer’s changing wants and needs, leaving them increasingly outpaced by the competition. Their reluctance or inability to invest in ecommerce platforms or offer exclusive deals propelled their sales into a downward spiral. 

Despite 130 years of operating as a family-run business, in 2019, Warner Bros made the drastic decision to purchase Sears’ brand name, effectively ending the chapter that had begun in 1886. Sears’ failure to adapt is a reminder of how important it is for businesses to remain agile and responsive to shifting customer expectations.


For these former powerhouse brands, the price for such a poor strategy was a catapult into financial decline. Despite these companies’ once beloved status, the strategic mistakes proved to be a fatal blow from which there was no recovery. In this post, we examined what went wrong for Blockbuster, Peloton, Kodak, BlackBerry, JCPenney, Toys R Us, and Sears. You definitely don’t want to make the same strategic mistakes, do you? 


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