In 2001, Polaroid declared bankruptcy, in 2014, Nokia did the same.
This is a reminder that even the most famous brands might face critical problems. We have selected some interesting cases that show how seemingly trivial mistakes led to the end of business giants.
Lehman Brothers Bank
Lehman Brothers was considered one of the world's leading investors, its collapse being a shock to the entire US financial system. Since 2006, the company's revenue has got to $ 46.7 billion, but in 2008, Lehman Brothers filed for bankruptcy.
This happened for 2 reasons. The bank's owners invested a lot of money in mortgages, which became the main cause of the financial crisis in the United States. Moreover, the government refused to provide the financial support requested by the bank.
South Sea Company
The story of this English trading company goes back to the eighteenth century. The company was founded in 1711 in England, in order to do business in South America. Among the first shareholders of the company were famous personalities, such as Isaac Newton and Jonathan Swift. However, the stock price soon began to fall, thousands of people lost their money and the company went bankrupt. While investigating this event, the detectives identified cases of fraud among the company's management.
Pan Am
After World War II, Pan Am made a significant contribution to the development of international tourism and air passenger transport. However, unfavorable circumstances led to the collapse of this successful company. The 1988 attack, during which terrorists detonated a Pan Am aircraft in the sky caused irreparable damage to the company's reputation. On December 4, 1991, the airline declared bankruptcy.
Nokia
Nokia has been the leading mobile phone maker since the turn of the century. However, it subsequently lost market share to other better performing companies. In 2014, Microsoft bought the production of Nokia mobile phones, after which they announced they would stop using this brand.
Enron
The bankruptcy of this American energy company was not only one of the largest in the world, but also one of the most dramatic. After the company's bankruptcy in 2001, thousands of people lost their jobs and investors lost large sums of money. Even worse, many of Enron's former and current employees have lost their savings in pension fund accounts totaling about $ 2 billion.
General Motors Company
For 77 years, General Motors was the largest automaker in the world. The company's bankruptcy was, in fact, called the bankruptcy of the entire US auto industry. Even before the 2008 crisis began, in 2005, the company suffered losses of $ 10.6 billion. In 2007, losses amounted to $ 38.7 billion, and sales fell by 45%. As a result, with an asset size of $ 82.3 billion, GM has already accumulated $ 172.8 billion in debt.
WorldCom
Even the largest American telecommunications company, which provided more than half of the country's Internet traffic, has collapsed. The reason – financial fraud. According to WorldCom, a financial error of $ 3.8 billion was found in their financial documents.
Olivetti
The first modern Olivetti M20 personal computer was launched in 1982. In 1983, Olivetti introduced the M24, an IBM PC clone. However, Olivetti could not compete with a faster and more reliable microprocessor than the Intel 80386.
In 1995, Olivetti launched a complete home multimedia PC called Envision. However, the project failed. Luxembourg company Bell S.A. obtained the Olivetti package of control actions in 1999.
It is said that the higher you get, the more painful you’ll fall. That is, the better known and appreciated a company is, the greater the responsibilities and the risks. Remember that being big doesn’t mean you’re invulnerable. As we have seen, the thing that might ruin your business often comes from withins. So be careful who you employ and what you invest into.
We wish you luck and hope you’ll never repeat the experience of the above mentioned companies!
