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5 Great Companies That Failed, And The Reasons That Led To It

Here is a look at some of the biggest mistakes made by big companies.

When you think about companies that failed, start-ups and mom-and-pop shops are usually what come to mind. However, some of the best and largest companies in the world also have their fair share of failures.

We look at some of the failures of these big companies and identify the possible reasons on why these companies failed.



Much like Yahoo and conventional shops such as Borders and HMV, Nokia failed to adapt to modern technology. While they were ahead, they let everyone else catch up, and were too fixated in what brought success in the past that they failed to innovate.

The company, in the early 2000s, were the largest mobile phone manufacturers and lauded for their groundbreaking designs and marketing capabilities. Fast-forward 15 years later, and the company has all but vanished. Microsoft bought Nokia for over US$ 7 billion in 2013, and in 2015, wrote off nearly US$7.5 billion on the acquisition.

MySpace/ Friendster



These industry leaders saw a new entrant enter the sector and not only gained market share, but also conquered the market. Today, Friendster has shut down and MySpace does not look like it is too far away either.

They may seem to offer the same product, but these companies differ a great deal from Facebook. Facebook constantly tries to remain relevant, change the way they work and come up with new streams of revenue to maintain sustainability. These are steps its predecessors just never took.


With losses amounting to over US$200 million, Zynga continues on its downward spiral since its spectacular listing on Nasdaq in 2011. Fuelled by many of its one-off success including its poker and farmville games on Facebook, its destiny appears to be tied to the dwindling numbers of people still on Facebook to play its games.

The advent of mobile gaming and profligate of games available on the market has probably led to its diminishing revenue and lower market share.

Lehman Brothers



Lehman Brothers’ collapse in 2008 was remarkable. With over 150 years of success in the financial markets, its sudden collapse at the height of the Great Depression caught many by surprise. Besides having wide-reaching repercussions affecting numerous investors’ livelihoods and pushing AIG, Morgan Stanley and Merrill Lynch to the brink, Lehman Brothers’ was so entrenched in the financial system that it almost brought total financial ruin to it.

The bottomline was that Lehman Brothers took too much risk by over-leveraging in the hopes of making fat profits. Instead, it incurred incredible losses to the extent that the US government decided not to save it. However, other institutions that it wrecked havoc on were saved, including AIG.

We can just imagine what would happen if AIG were to go bankrupt and pull a few others into financial ruin, and in turn those few others would pull a few more others.


Many people claim Enron was a ticking time bomb. However, this company was once one of America’s largest corporations and a cash cow generating bucket loads of revenue and profits.

Mismanagement, coupled with greedy executives and dodgy accounting turned this company insolvent. Many of the board members and executives had ties with top government officials leading many to understand a corrupt culture was prevalent, and much of its creatively crafted financials had to be restated upon closer inspection.


The broader stock market will survive any single company’s demise. However we must take lessons from these seemingly giant companies when it comes to investing and when it comes to handling our own lives.

For investing, we need to diversify broadly and through different asset classes.

For ourselves, we must continue to innovate, keep up with times, and not give in to short cuts and corruption, as they will ultimately catch up with us.

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