1.
10 Companies Back
from the Dead — Part 2
A Halloween Special
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2.
Lego
The Curse:
10 years ago, Lego was on the brink of bankruptcy, struggling to give
consumers what they wanted and effectively manage costs.
Reverse Spell:
In 2004, Jorgen Vig Knudstorp came in as CEO. Costs were analyzed,
redundancies were made, and the number of manufactured parts
was reduced to 6,000. Most importantly, creative control was put
into the hands of hardcore fans of the brand.
Back from the Dead:
Lego is now sold in more than 130 countries. In 2014, it surpassed Mattel
as the world ‘s largest toy manufacturer. But perhaps the biggest
testament to Lego’s turnaround was the release of The L-ego Movie
in 2014, which grossed over—$468m"‘worldvvide.
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Halloween Special
10 Companies
that came back
FROMMDEAD
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3.
Thomas Cook
The Curse:
After a debt—fueled expansion attempt, and low demand following the financial crisis,
Thomas Cook, the world’s oldest travel agency, found itself on the brink of
bankruptcy. In 2011 it was forced to renegotiate debts of almost £900m.
Reverse Spell:
In 2012, new CEO Harriet Green started cutting costs by closing stores, making
redundancies, selling off non—core businesses, and scrapping unprofitable product
offerings. Instead, Thomas Cook secured exclusive hotel packages, and added new
winter destinations, such as Barbados and Antigua.
Back from the Dead:
In Q3 2014, Thomas Cook announced its 8th consecutive quarter of increased profits.
Between 2012 and 2014, profits grew by over 70%, to £306m (as of June 2014). While
recovery is still shaky, future digitization plans should help drive further growth.
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4.
Merck
The Curse:
In 2005, Merck was embroiled in scandal with its arthritis drug,
Vioxx, linked to heart attacks & deaths.
Reverse Spell:
Lawsuits were settled for $4.85 billion, 5 factories were closed,
7,000 jobs were cut, & 8 new drugs approved
Back from the Dead:
By 2008, Merck’s stock price was almost double its April 2005 low.
In 2013, Merck’s revenue totaled $44.08B, while annual earnings
equaled $3.49 per share.
Halloween Special - ‘
10 Companies - '
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5.
Domino’s Pizza
The Curse:
In 2008, Domino’s Pizza ranked at the bottom of consumer surveys.
Its stock price sank from $21 to $3.03 per share in 3 just years.
Reverse Spell:
A new recipe was launched, along with a scathing ad campaign
attacking its old recipe. The business was streamlined, with a
greater focus on digital sales.
Back from the Dead:
Sales surged & share prices followed. By October 2014, share
prices had surged even further to $84.
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6.
Nintendo
The Curse:
In 2006, Nintendo was losing market share to Sony and Microsoft.
US hardware sales had plummeted by almost 50% in 20 years.
Reverse Spell:
Nintendo widened its target market to include non-gamers,
launching a low-priced, motion-controlled console called the
Wii in 2006.
Back from the Dead:
Both Microsoft and Sony released motion—sensor gaming in an
effort to mimic the Wii’s appeal, but were less successful. By the
end of 2013, 100.90 million Wii consoles were sold worldwide.
Nintendo’s 3DS handheld system has also performed well, ap-
proaching 50 million unit sales.
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10 Companies
that came back
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7.
Netflix
The Curse:
In 2011, Netflix hiked prices by 60% as they struggled to
transition from DVD-by—Mail service to online video streaming.
Their stock plunged.
Reverse Spell:
Unable to secure attractive licensing deals with studios, Netflix
created its own hit content, including House of Cards, Orange is
the New Black & Arrested Development.
Back from the Dead:
In July 2014, Netflix surpassed 50 million worldwide subscribers
for the first time, and overtook HBO in subscription revenue
($1.146B vs $1.141B).
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8.
General Motors
The Curse:
In 2008, rising gas prices impacted on the sales of GM’s
gas-guzzling SUVs and trucks. Coupled with outrageous company expenses of
$500 million - $2 billion each month, GM filed for bankruptcy in 2009.
Reverse Spell:
Bankruptcy allowed the company to shed crippling legacy costs. Gone are
underperforming brands such as Pontiac, Hummer, Saab, Oldsmobile & Saturn.
Back from the Dead:
In 2010, GM announced earnings of $4.7 billion — its first profit since 2004, & largest
in over a decade. Despite a record—setting number of recalls in 2014, sales do not
appearto have been impacted — at least not yet. In the first 6 months of this year,
revenue rose to $77B, up from $76B in the same period a year ago.
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9.
eBay
The Curse:
A dying business model caused eBay’s stock to plunge from $59 per share in
2004 to $26 per share by 2008.
Reverse Spell:
eBay shifted its focus away from auctions to fixed—price sales.
A new mobile app, with one-click shopping, was also launched ahead of
competitors.
Back from the Dead:
eBay’s stock is at its highest since January 2006, with a market cap above
$60 billion. eBay’s stock hit an all time high in 2014, with a market cap above
$62 billion. In September, the company announced that it will spin-off its
PayPal division in an effort to make both companies more competitive.
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10.
Apple
The Curse:
Apple had endured 12 years of financial loss, and with Gil Amelio
as CEO, the company was on the verge of bankruptcy.
Reverse spell:
In 1997 Steve Jobs returned as interim CEO after Amelio’s departure,
proceeding to axe expensive projects, like the Newton. Under Job’s
leadership, a lucrative deal was made with Microsoft, & the company
broadened its business scope beyond computers.
Back from the Dead:
Apple became a technology titan! At its IPO in 1980, stock was
priced at $22 per share. Today, Apple trades at $696 per share,
with a total market value of over $651 billion. That’s bigger than
the entire 1977 US stock market!
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11.
Starbucks
The Curse:
In Q3 2008, Starbucks posted its first quarterly loss since
going public in 1992. By Q4, its profits had declined 97%!
Reverse Spell:
Under the direction of reinstated CEO, Howard Schultz,
Starbucks closed underperforming stores, added & improved
products, refined the “Starbucks Experience, ” & expanded in Asia.
Back from the Dead:
By Q1 2010, Starbucks had tripled its quarterly profit to
$241 million, and by Q2 profits were up more than eightfold.
Starbucks is now the largest coffeehouse company in the world,
with over 23,000 stores in 64 countries.
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10 Companies
miiifiho Firmex