Case Study:

Four companies that failed spectacularly, and the lessons of their demise

Written by David Chancellor Thursday 17 September 2015
There are many reasons why businesses fail. Failure can be rooted in bad management, misguided leadership, strategic failings, market changes or just bad luck. Or, often, a combination of all these…

A recent study published in the Journal of Financial and Quantitative Analysis (a rip-roaring read!) suggests that more than 50% of companies won’t survive to age 16, with the highest corporate mortality occurring in the fourth year.

The Boston Consulting Group’s 2015 report, Die Another Day: What leaders Can Do About the Shrinking Life Expectancy of Corporations, involving 35,000 companies publicly listed in the US since 1950, claims that today almost one-tenth of all public companies fail each year, a fourfold increase since 1965. The “five-year exit risk” for public companies traded in the US now stands at 32%, compared with a five per cent risk 50 years ago.

Since this one-in-three chance of not surviving the next five years falls within typical CEO tenures and investor time horizons, we decided to analyse four companies that suffered early demise to learn why they “prematurely” failed.

Want to learn more about lessons learnt from the demise of companies that failed spectacularly?


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