Your decisions are largely founded on the ideas that you have in your mind. It might have been something that you came up with on your own or you might have picked it up elsewhere. This is also true for business – your ideas and decisions are certainly intertwined. A business idea – any business idea – seems great when initially conceptualized. The proof, however, would only come when it is put into actual practice. Only then would it be seen if it is even worthy of being considered. This might seem like a risky way of doing things, but it’s the only way to be sure when it comes to business.
History has shown us plenty – too many, in fact – of business decisions that went nowhere. It might have been a great idea at the time, but time and circumstances have proven it to be otherwise. The wisdom of hindsight is often displayed with some terrible business decisions.
The following are some prime examples of the worst business decision that have ever been made. Most, if not all, of these might seem terribly obvious today, but it was perhaps not so bad of an idea when the decision was made at the time. This will serve to inform, perhaps even entertain a little, but also serve as reminders that not all ideas and decisions are going to wind up successful.
20TH Century Fox’s MAJOR Star Wars Blunder
Today, everybody knows about Star Wars and what it is all about. Being one of the biggest film franchises and merchandising juggernaut, Star Wars is probably the pre-eminent sci-fi adventure that has fans all over the globe. But there was a time when Star Wars was not yet known the way it is today, when the smallest news about is enough to make fan boys crazy. That was before it came out in theaters in 1977, of course, before it became one of the biggest blockbusters of all time. At the time, 20th Century Fox had no way of knowing how big Star Wars would eventually become – becoming the billion dollar empire that it is today. It covers not just the movies, but toys, comic books, t-shirts, etc.
So it was that back in 1977, Fox executives made a decision that has likely haunted them through the years. They actually signed over Star Wars’ entire product merchandising rights to George Lucas, who was responsible for the creation of Star Wars. The price for signing everything away? It was a mere $20,000 – certainly nothing compared to what Star Wars eventually made both at the box office and through its products and merchandise.
Mars Rejects ET
There was once a time when Mars actually rejected ET, when that lovable extraterrestrial came calling. The year was 1981, and the Mars Company got what they probably felt like an unusual offer from Amblin Productions. The call was about a certain cross promotional deal that the film company was pitching to Mars. Amblin wanted to use Mars’ leading product, M&Ms, in their new film, which would in turn provide free advertising for the product. In return for that, Mars could feature the film in their products’ packaging, thereby helping in promoting the movie. It was a good enough opportunity to cross promote between the two distinct products, allowing each to reach more people. However, the marketing and advertising experts over at Mars rejected the idea. The film company had no choice to turn to M&Ms competitor, Reeses Pieces, and made them the offer. The surprising result was that the sales of Reeses’ increase over 65 percent in the next few months after the film was released – which happened to be ET the Extra-Terrestrial, one of the biggest box-office hits of all time.
The year was 1962 and the world was on the verge of a musical, some even say cultural, revolution courtesy of four tousle haired youths from Liverpool, England. But that revolution was still about a couple of years away and the world was totally unsuspecting. The group that would one day help change music forever were still just a largely unknown group that were still struggling to gain recognition and respect. So the Beatles tried auditioning at Decca Records’ London office that year.
Unfortunately, the Fab Four’s road to superstardom did not begin at that very edition. That’s because the one who was in charge of the audition decided that the group just was not good enough and that their sound was similar to another group that was already established – which turned out to be The Shadows. Add to that, the Beatles’ manager, Brian Epstein, was even told that groups were already on their way out, four piece groups in particular. Well, tough luck for Decca as we all know how big the Beatles later became. And even that’s something of an understatement.
Overconfidence Backfires on Kodak
Confidence is a good thing, especially in business. However, too much of it can eventually lead to some bad times for a company, as Kodak found out. The Eastman Kodak Company was for a long time the dominant force in the United States’ film marketplace. This dominance probably led them to have a false sense of security, that bad times were never ahead for the company and that they couldn’t be toppled from their lofty spot at the top. This was likely the case back in the early 80’s, when Japanese based company Fuji penetrated the US film market. Fuji offered customers lower prices on films and related supplies. Kodak wasn’t actually threatened by it since they believe that their loyal customers are going to stick to them no matter what.
In 1984, Fuji made a major breakthrough. They were able to get the rights to become the official film for the Summer Olympics to be held in Los Angeles that year. Kodak actually passed up the chance to be the Games’ official film. In any event, Fuji finally had that needed chance to increase their US presence. It was a mistake that Kodak never really got over from, along with other major mistakes. Among the most prominent was their decision to not fully develop the digital camera that they were able to develop back in 1975. Their decision was based on their fear that it could affect their own dominance of the film business. They did the same to the core technology of the cell phone, which they were also able to develop. Those missteps led to the company filing for Chapter 11 bankruptcy in 2012.
Those are just some of the worst business decisions ever made. There are many, many more, but these are also some of the most prominent ones just based on the companies and even the personalities involved. At the time that the decisions were made, the ideas behind it seemed sound enough, although in the long run that did not prove to be the case. The cases shown here should serve as lessons for anyone who’s aspiring to go into business so that they would carefully weigh their decisions before finalizing it. And it is also good to be reminded that while it is not good to reject some ideas outright, careful consideration and circumspection should come before accepting and adopting any of it.