Source: Thinkstock
For the fortunate, death strikes swiftly. For others, it’s a fight to the finish, using tooth and nail. The business world is similar, although most companies don’t experience fast downfalls.
Companies come and go: It’s a simple part of the overall business cycle. Businesses are born, they age, then eventually die off, unless they can find ways to survive through innovation or by keeping their customers’ trust. Usually, new companies develop less expensive or superior methods and products, and ultimately run the old firms out of town. This is the most basic function of the economy at large, and the guiding principle behind the free market economic system.
At any given time, you can take a look around to see firms in all stages of their life cycle. Though a small handful seem to have achieved immortality of sorts, there will be a day when even the strongest and largest of companies will meet their match. Look at how Netflix came out of seemingly nowhere to take over its industry. Or how companies like Google and Facebook are incorporating new technologies, as well as developing their own, in an effort to insulate themselves from the dangers of innovative entrepreneurs.
They’re all steps to stave off death. Though right now it’s hard to imagine a world without Google, one day its number will be up as well.
There are any number of factors that can play into the prolonging or accelerating of a company’s natural lifetime. We saw many businesses be pulled apart prematurely during the financial crisis and recession, while others were able to find new life in the ruins of the economy. Yet others were severely damaged and are still fighting to pull their way out. For some of them, they won’t be able to pull it off. They’re caught in a corporate death spiral, and it’s only a matter of time before they’re done completely.
Read on to see six companies that are — or will be — circling the drain, despite their best efforts to stay alive.
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Dish Network
Dish Network is in a very unfortunate position. After going head-to-head with DirecTV over the years, the company looks to be in a prime position to simply be outgunned as the telecom industry consolidates. In this case, it’s not that Dish Network has necessarily done anything wrong, or made any PR blunders or anything like that. Simply put, the company won’t be able to survive against the new behemoths that are set to take over the industry: The Comcast-Time Warner Cable monster, and its AT&T-DirecTV counterpart.
It appears that Dish Network couldn’t find any ally — or hasn’t yet, at least — that will help it navigate the markets if the proposed mergers are pushed through, which most people suspect will happen. Dish does have a leg up on many other companies on this list, though. It still has time to figure out a way to stay alive, through innovating product offerings, pricing, or both. The company could take advantage of the fact that many people simply hate their competitors and use that as a springboard to success. But it will take some work, and Dish faces a grim forecast, as the telecom arms race has seemingly left it behind.
Source: Thinkstock
Radioshack
This one comes as a surprise to no one, really. Radioshack has been in trouble for many years, and quite frankly, it’s a bit surprising the company is even still around at all. But the guillotine appears to be coming down. Store sales have plummeted over the past couple of years, and it has quickly burned through its cash reserves. It now sits on considerable amounts of debt and hasn’t shown any sign that it will be able to turn things around.
A quick analysis by The Motley Fool really hit the nail on the head in summarizing Radioshack’s issues: “A Hail Mary financing deal could extend the company’s life and allow for closing more stores, but this doesn’t fix the fundamental problem plaguing RadioShack: no one shops there anymore.”
And that’s just it: The customers are gone, and they’re not coming back.
Source: Thinkstock
Darden Restaurants
Though Darden Restaurants itself may be an unfamiliar name, almost everyone knows its brands. Restaurant chains including Olive Garden and Red Lobster operate, or did operate, under the Darden name, although Red Lobster has since been sold off. The recession and rising level of inequality have been two driving factors that have led to investors sticking a proverbial fork into Darden, as middle-class consumers have shifted toward cheaper alternatives, and those on the upper end opt for more upscale choices.
Not only that, but there was also the damning analysis regarding Olive Garden’s breadsticks and unsalted water when cooking pasta, further putting the company into damage control. As things have become more bleak, the vultures have begun circling. Many analysts are looking at how Darden can liquidate and take advantage of its numerous real estate holdings to regain some capital. In all likelihood, we’re watching Darden, or at least some of its brands, die before our eyes.
Source: Thinkstock
JCPenney
Retail has had a tough go in the years following the recession, and it’s been even tougher on the big department stores. Sears and Macy’s have suffered from declining sales and foot traffic, but JCPenney is likely facing the bleakest outlook. The once-proud shopping mall anchor is now struggling to get customers in the door as people have opted to go online for better deals or simply shop at lower-priced alternatives as wages have stagnated over the years.
The fact is, JCPenney may be able to keep itself afloat for a while, but it’s likely on its way out. New strategies to combat shifting consumer needs and shopping methods have so far gone over with limited success, sending investors running. The company’s stock is under $10 per share and looks to drop even further. This is a prime example of a once-great American company succumbing to the trends of the market.
Justin Sullivan/Getty Images
Quiznos
In the sandwich game, there are winners and losers.Quiznos isn’t really a loser, but it just hasn’t been able to keep up with the explosive growth experienced by its competitors, namely Jimmy John’s and Subway. Years ago,Quiznos made some waves in the industry by toasting its subs, something that was then immediately copied by almost every other sandwich shop out there. Now, the chain is simply outgunned.
Quiznos has filed for bankruptcy and has seen dramatic contraction since 2008, closing thousands of stores across the country. Franchisees haven’t been happy with corporate pricing and policies, leading to a further toxic environment. It appears that Quiznos is headed for the door, and fast. So get in and enjoy a Peppercorn Prime Rib sub while you still can.
Source: Thinkstock
BlackBerry
Finally, another company that is seeing the tide take it out to sea is BlackBerry. Going up against Apple, Samsung, Microsoft, and a slew of other giant tech hardware and software companies is a tough prospect, and though it has fought on through the years, BlackBerry’s time is likely running out. Basically, the company hasn’t been able to compete with the incredibly popular mobile devices released by Apple and its counterparts, and as a result, revenues and market share have dramatically declined.
Though things look bleak, the company is still profitable and brings in hundreds of millions in revenue. There are even new devices planned for the future, with hopes that some customers will be willing to ditch devices from competitors. BlackBerry still has a pulse — it’s just getting fainter every year, and given enough time, it will likely be dragged under.
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