Failed Businesses

Spoorthi
 FAILED BUSINESSES
Aim of the project:
The primary aim of this project is to conduct a
comprehensive analysis of the reasons behind the failure of
two prominent businesses, Kingfisher Airlines and Nokia, by
examining the internal and external factors that contributed
to their downfall, including leadership, management,
organizational culture, marketing strategies, financial
management, and operational efficiency, with the objective
of identifying common patterns and lessons that can be
learned from their experiences, analyzing the role of
leadership, management, and organizational culture in their
failure, and providing recommendations for businesses to
avoid similar pitfalls and achieve long-term success,
ultimately contributing to the existing body of knowledge on
business failure and providing valuable insights for
entrepreneurs, managers, and policymakers to drive business
growth, create jobs, and stimulate economic development.
Introduction:
Business failure is a pervasive phenomenon that can occur
due to a multitude of complex and interconnected reasons,
and it can be succinctly defined as the inability of a business
to achieve its objectives, leading to financial, operational, or
reputational difficulties, as exemplified by the cases of
Kingfisher Airlines and Nokia, two erstwhile prominent
businesses that succumbed to failure in recent years.
Kingfisher Airlines, an Indian airline that commenced
operations in 2005, failed to sustain its success due to a
plethora of internal and external factors, including
inadequate leadership, poor management, insufficient
financial resources, lack of innovation, inefficient operations,
and an inability to adapt to changing market trends. Similarly,
Nokia, a Finnish multinational telecommunications company
that dominated the mobile phone market in the 1990s and
early 2000s, failed to innovate and adapt to the paradigm
shift towards smartphones and touch-screen devices,
ultimately leading to its downfall. The failure of these
businesses serves as a poignant reminder of the importance
of effective leadership, prudent financial management,
innovation, and adaptability in business, and highlights the
imperative need for entrepreneurs, managers, and
policymakers to learn from the failures of others and
implement strategies to mitigate the risk of business failure,
such as prioritizing innovation, efficiency, and adaptability,
and promoting a culture of entrepreneurship, innovation, and
risk-taking, in order to drive business growth, create jobs, and
stimulate economic development, and ultimately, to reduce
the risk of business failure and achieve long-term success and
sustainability.
1.Nokia

Overview of Nokia
Nokia is a Finnish multinational telecommunications,
information technology, and consumer electronics company.
Founded in 1865, Nokia is one of the oldest and most iconic
technology companies in the world.
History of Nokia
Nokia's history dates back to 1865 when Fredrik Idestam, a
Finnish mining engineer, founded a paper mill in Tampere,
Finland. Over the years, the company expanded into various
industries, including rubber, cables, and electronics. In the
1960s, Nokia began to focus on telecommunications, and in
1979, it launched its first mobile phone, the Mobira Senator.
Rise to Prominence
In the 1990s, Nokia became one of the leading mobile phone
manufacturers in the world. Its iconic phones, such as the
Nokia 3310 and Nokia 8110, became synonymous with
mobile phones. Nokia's market share peaked in 2007, with
over 40% of the global mobile phone market.
 Decline and Transformation
However, Nokia's fortunes began to decline in the late 2000s,
as the company struggled to adapt to the shift towards
smartphones and touch-screen devices. Despite efforts to
revamp its product lineup, Nokia's market share continued to
decline. In 2014, Nokia sold its mobile device division to
Microsoft, marking the end of its era as a leading mobile
phone manufacturer.
Current Status
Today, Nokia is focused on providing network infrastructure,
software, and services to communication service providers
and enterprises. The company has also made significant
investments in 5G, artificial intelligence, and the Internet of
Things (IoT). Nokia continues to be a major player in the
telecommunications industry, with operations in over 130
countries.
Key Products and Services
Some of Nokia's key products and services include:
1. Network infrastructure solutions, including 5G, LTE, and IP
networking
2. Software solutions, including network management,
analytics, and security
3. Services, including consulting, deployment, and
maintenance of network infrastructure
4. IoT solutions, including device management, data analytics,
and security
 Awards and Recognition
Nokia has received numerous awards and recognition for its
innovative products and services, including:
1. "Best Network Infrastructure Provider" at the 2020 Mobile
World Congress
2. "Innovation Award" at the 2019 5G World Forum
3. "Best IoT Solution" at the 2018 IoT World Forum
Reasons for failure:
 Financial Reasons -
1. Over-reliance on Symbian: Nokia's failure to adapt to
the changing market and its over-reliance on the
Symbian operating system led to a decline in sales and
revenue.
2. High Research and Development Costs: Nokia's high
R&D costs, which were around 10% of its revenue, put a
strain on the company's finances.
3. Failure to Generate Cash: Nokia's failure to generate
cash from its operations led to a decline in its financial
performance.
4. Decline in Market Share: Nokia's market share
declined significantly, leading to a decrease in revenue
and profitability.
5. Poor Financial Planning: Nokia's financial planning was
criticized for being overly optimistic, leading to a
mismatch between revenue projections and actual
performance.
6. Inadequate Cost Control: Nokia's failure to control
costs, particularly in its manufacturing and supply chain
operations, led to a decline in profitability.
 Marketing Reasons -
1. Failure to Create a Strong Brand Identity: Nokia's
failure to create a strong brand identity that resonated
with consumers led to a decline in sales and revenue.
2. Poor Marketing Strategies: Nokia's marketing
strategies were criticized for being ineffective and failing
to target the right audience.
3. Lack of Differentiation: Nokia's products were not
differentiated enough from those of its competitors,
leading to a decline in sales and revenue.
4. Failure to Engage with Developers: Nokia's failure to
engage with developers and create a strong ecosystem
around its platforms led to a decline in its market share.
5. Inadequate Social Media Presence: Nokia's social
media presence was inadequate, leading to a lack of
engagement with customers and a decline in brand
awareness.
6. Poor Product Positioning: Nokia's products were not
positioned effectively in the market, leading to a decline
in sales and revenue.
 Operational Inefficiency Reasons -
1. Inefficient Supply Chain Management: Nokia's supply
chain management was inefficient, leading to delays and
shortages of components.
2. Poor Manufacturing Quality: Nokia's manufacturing
quality was poor, leading to a high number of defective
products.
3. Inadequate Testing and Quality Assurance: Nokia's
testing and quality assurance processes were
inadequate, leading to a decline in the quality of its
products.
4. Failure to Adopt Agile Development Methodologies:
Nokia's failure to adopt agile development
methodologies made it difficult for the company to
respond quickly to changing market trends.
5. Inadequate Inventory Management: Nokia's inventory
management was inadequate, leading to a buildup of
unsold inventory and a decline in profitability.
6. Poor Logistics and Distribution: Nokia's logistics and
distribution operations were poor, leading to delays and
inefficiencies in getting products to market.
 Managerial Inefficiency Reasons -
1. Poor Leadership: Nokia's leadership was criticized for
being ineffective and failing to make strategic decisions
quickly enough.
2. Lack of Vision: Nokia's leadership lacked a clear vision
for the company's future, leading to a decline in its
financial performance.
3. Failure to Adapt to Changing Market Trends: Nokia's
leadership was slow to respond to changing market
trends, leading to a decline in sales and revenue.
4. Poor Communication: Nokia's leadership was
criticized for poor communication with employees,
 customers, and investors, leading to a decline in trust
and confidence in the company.
5. Inadequate Talent Management: Nokia's talent
management was inadequate, leading to a lack of skilled
and experienced employees in key areas.
6. Poor Decision-Making: Nokia's decision-making
processes were criticized for being slow and ineffective,
leading to a decline in its financial performance.

2.Kingfisher Airlines

Overview of Kingfisher Airlines

Kingfisher Airlines was a privately owned Indian airline that
operated from 2005 to 2012. It was founded by Vijay Mallya,
a Indian businessman and politician, and was headquartered
in Bengaluru, India. The airline was known for its luxurious
amenities and services, and was considered one of the
premier airlines in India.
 History of Kingfisher Airlines
Kingfisher Airlines began operations on May 9, 2005, with a
fleet of four Airbus A320-200 aircraft. The airline initially
operated domestic flights within India, but later expanded its
operations to international destinations. In 2008, Kingfisher
Airlines acquired Air Deccan, a low-cost carrier, and merged it
with its operations. This acquisition helped Kingfisher Airlines
to expand its route network and increase its market share.
Key Features and Services
Kingfisher Airlines was known for its luxurious amenities and
services, including:
1. Luxurious Seating: Kingfisher Airlines offered luxurious
seating options, including business class and first class seats.
The airline's business class seats were designed to provide
maximum comfort and luxury, with features such as lie-flat
beds, gourmet meals, and personalized entertainment.
2. In-flight Entertainment: The airline offered a wide range of
in-flight entertainment options, including movies, TV shows,
and music. The airline's in-flight entertainment system was
designed to provide passengers with a wide range of options
to choose from, and to make their flight more enjoyable.
3. Gourmet Meals: Kingfisher Airlines offered gourmet meals
designed by celebrity chefs. The airline's meals were
designed to provide passengers with a culinary experience
that was similar to what they would experience in a fine
dining restaurant.
4. Fine Wines: The airline offered a selection of fine wines
and champagnes. The airline's wine list was designed to
provide passengers with a wide range of options to choose
from, and to complement the airline's gourmet meals.
5. Personalized Service: Kingfisher Airlines was known for its
personalized service from trained cabin crew. The airline's
cabin crew were trained to provide passengers with a high
level of service, and to make their flight more enjoyable.
6. Frequent Flyer Program: The airline had a frequent flyer
program, King Club, which offered rewards and benefits to
loyal customers. The King Club program was designed to
provide passengers with a wide range of benefits, including
priority check-in, extra baggage allowance, and access to
airport lounges.
Achievements and Awards
Kingfisher Airlines received several awards and accolades
during its operation, including:
1. Best Airline in India: Kingfisher Airlines was awarded "Best
Airline in India" at the Skytrax World Airline Awards in 2008.
2. Best Domestic Airline in India: The airline was awarded
"Best Domestic Airline in India" at the Travel Agents
Association of India (TAAI) Awards in 2009.
3. Best Airline in Central Asia: Kingfisher Airlines was awarded
"Best Airline in Central Asia" at the Skytrax World Airline
Awards in 2010.
 Fleet and Destinations
At its peak, Kingfisher Airlines operated a fleet of over 60
aircraft, including:
1. Airbus A320-200: The airline operated a fleet of Airbus
A320-200 aircraft, which were used for domestic and
international flights.
2. Airbus A321-200: The airline operated a fleet of Airbus
A321-200 aircraft, which were used for international flights.
3. ATR 72-500: The airline operated a fleet of ATR 72-500
aircraft, which were used for regional flights.
Kingfisher Airlines flew to over 60 destinations in India and
abroad, including major cities in Asia, Europe, and the Middle
East.
Conclusion
Kingfisher Airlines was a privately owned Indian airline that
operated from 2005 to 2012. The airline was known for its
luxurious amenities and services, and was considered one of
the premier airlines in India. Despite its success, the airline
faced significant financial difficulties and operational
challenges, which ultimately led to its shutdown in 2012.
Reasons for failure:
 Financial Reasons –
1. High Operating Costs: Kingfisher Airlines had high
operating costs due to its luxurious amenities and services.
2. Debt Burden: The airline had a significant debt burden,
which made it difficult to manage its finances.
3. Lack of Cash Flow: Kingfisher Airlines faced a severe cash
crunch, which made it difficult to pay its employees,
suppliers, and creditors.
4. Inefficient Financial Planning: The airline's financial
planning was criticized for being inadequate and
ineffective.
5. Over-expansion: Kingfisher Airlines expanded its
operations too quickly, which put a strain on its finances.
6. Failure to Hedge Fuel Prices: The airline failed to hedge
fuel prices, which exposed it to significant fuel price risks.
 Marketing Reasons -
1. Poor Brand Positioning: Kingfisher Airlines' brand
positioning was criticized for being unclear and ineffective.
2. Inadequate Marketing Strategies: The airline's marketing
strategies were inadequate and failed to attract enough
customers.
3. Lack of Differentiation: Kingfisher Airlines failed to
differentiate itself from its competitors, which made it
difficult to attract and retain customers.
4. Ineffective Advertising: The airline's advertising
campaigns were criticized for being ineffective and failing
to resonate with customers.
5. Poor Customer Service: Kingfisher Airlines' customer
service was criticized for being poor, which led to a decline
in customer loyalty and retention.
6. Failure to Engage with Customers: The airline failed to
engage with its customers, which made it difficult to
understand their needs and preferences.
 Operational Inefficiency Reasons-
1. Inefficient Route Network: Kingfisher Airlines' route
network was criticized for being inefficient and failing to
match demand with capacity.
2. Poor Fleet Management: The airline's fleet management
was criticized for being poor, which led to a decline in
operational efficiency.
3. Inadequate Maintenance: Kingfisher Airlines'
maintenance practices were criticized for being
inadequate, which led to a decline in safety and
operational efficiency.
4. Lack of Operational Flexibility: The airline lacked
operational flexibility, which made it difficult to respond to
changes in demand and market conditions.
5. Poor Supply Chain Management: Kingfisher Airlines'
supply chain management was criticized for being poor,
which led to a decline in operational efficiency.
6. Inefficient Check-in and Boarding Processes: The airline's
check-in and boarding processes were criticized for being
inefficient, which led to delays and inconvenience to
passengers.
 Managerial Inefficiency Reasons-
1. Poor Leadership: Kingfisher Airlines' leadership was
criticized for being poor and ineffective.
2. Lack of Vision: The airline's leadership lacked a clear
vision for the company's future, which made it difficult to
make strategic decisions.
3. Inadequate Communication: Kingfisher Airlines'
communication practices were criticized for being
inadequate, which led to a decline in employee morale and
motivation.
4. Poor Decision-making: The airline's decision-making
processes were criticized for being poor, which led to a
decline in operational efficiency and financial performance.
5. Lack of Accountability: Kingfisher Airlines' leadership
lacked accountability, which made it difficult to hold
employees and managers accountable for their actions.
6. Ineffective Organizational Structure: The airline's
organizational structure was criticized for being ineffective,
which led to a decline in operational efficiency and
financial performance.
Findings and Suggestions:
Findings for Nokia
1. Failure to adapt to changing market trends: Nokia failed
to anticipate and respond to the shift towards
smartphones and touch-screen devices.
2. Inadequate innovation: Nokia's innovation efforts were
insufficient to keep pace with competitors, leading to a lack
of competitive products.
3. Poor leadership and management: Nokia's leadership
and management were criticized for being slow to respond
to changing market conditions.
4. Inefficient operations: Nokia's operational efficiency was
compromised by high production costs and poor supply
chain management.
Suggestions for Nokia
1. Invest in research and development: Nokia should have
invested more in research and development to stay ahead
of the competition.
2. Diversify product offerings: Nokia could have diversified
its product offerings to include more smartphones and
touch-screen devices.
3. Improve leadership and management: Nokia should
have brought in new leadership and management to inject
fresh ideas and perspectives.
4. Streamline operations: Nokia could have streamlined its
operations to reduce costs and improve efficiency.
Findings for Kingfisher Airlines
1. Poor financial management: Kingfisher Airlines' financial
management was criticized for being inadequate, leading
to significant debt and financial difficulties.
2. Inefficient operations: Kingfisher Airlines' operational
efficiency was compromised by high operating costs and
poor route management.
3. Lack of innovation: Kingfisher Airlines failed to innovate
and differentiate itself from competitors, leading to a lack
of competitive advantage.
4. Poor leadership and management: Kingfisher Airlines'
leadership and management were criticized for being
ineffective and lacking transparency.
Suggestions for Kingfisher Airlines
1. Improve financial management: Kingfisher Airlines
should have improved its financial management by
reducing costs, increasing revenue, and managing debt
more effectively.
2. Streamline operations: Kingfisher Airlines could have
streamlined its operations to reduce costs and improve
efficiency.
3. Innovate and differentiate: Kingfisher Airlines should
have innovated and differentiated itself from competitors
to establish a competitive advantage.
4. Improve leadership and management: Kingfisher Airlines
should have brought in new leadership and management
to inject fresh ideas and perspectives.
Recommendations:
- Businesses should prioritize innovation and adaptability in
order to stay ahead of changing market trends.
- Effective leadership and management are critical to
driving business success.
- Businesses should be proactive in identifying and
addressing internal and external factors that could
contribute to failure.
- Policymakers should provide support and resources to
help businesses innovate and adapt to changing market
conditions.
By following these recommendations, businesses and
policymakers can work together to promote business
success and reduce the risk of failure.
Conclusion:
In conclusion, this project has provided a comprehensive
analysis of the failure of Nokia and Kingfisher Airlines, two
prominent businesses that failed to adapt to changing
market trends and ultimately succumbed to failure.
Through a review of existing literature and case studies,
this project has identified the key factors that contributed
to the failure of these businesses, including inadequate
leadership, poor management, insufficient innovation, and
inefficient operations. The findings of this project highlight
the importance of adaptability, innovation, and effective
leadership in driving business success. They also
underscore the need for businesses to be agile, flexible,
and responsive to changing market conditions, and to be
willing to pivot, adjust, and reinvent themselves in order to
stay relevant and competitive. The project's analysis of
Nokia's failure to adapt to the shift towards smartphones
and touch-screen devices, and Kingfisher Airlines' failure to
manage its finances and operations effectively, provides
valuable lessons for businesses, entrepreneurs, and
policymakers. By learning from the mistakes of these
businesses, organizations can avoid similar pitfalls and
achieve long-term success and sustainability. Ultimately,
this project demonstrates that business failure is often the
result of a combination of internal and external factors,
and that businesses must be proactive in identifying and
addressing these factors in order to succeed. By prioritizing
innovation, adaptability, and effective leadership,
businesses can reduce the risk of failure and achieve long-
term success and sustainability.
Bibliography:
1. Nokia's official website: (link unavailable)
2. Kingfisher Airlines' official website (archived): (link
unavailable)