February 3, 2019
You hear it all the time, “change can be a good thing.” And although we as people are creatures of habit and typically do not like change, sometimes recognizing what it takes to adjust to the business environment around you, can be the difference between surviving and thriving.
While we’ve previously published stories about companies that did not change and how that led to their demise, here are 15 examples of companies that reinvented themselves to remain ahead of the curve and scored big financially.
More than 20 years ago, Amazon was a very different company. It’s hard to believe this go-to online retailer that sells everything you could possibly think of — from TVs and computers to groceries and household items — started off as an online book retailer.
In July 1995, CEO Jeff Bezos launched Amazon.com, which has changed drastically since the mid-90s. Back then, the website contained a lot of blue, hyperlinked text — quite different from the colorful photos and well-organized categories you’ll see on the site today.
Author Brad Stone — who wrote the book, “The Everything Store” about Amazon and Bezos — told NPR in 2013 that he thinks Bezos started off selling books because it was “a good place to start: [Books are] small, they ship easily in the mail, the selection that the internet enables was a great strategic advantage over the traditional chain booksellers of the time like Barnes & Noble and Borders.”
Indeed, buying books on Amazon was — and still is — easy and preferable to going to a physical bookstore for many people. Although Amazon experienced success with its book-selling strategy, in time Bezos reinvented Amazon to sell more than just books.
In 1996, the retailer introduced an affiliate program — known as the Amazon Associates Program — which helped the company expand its reach, according to CBS News. And after announcing its IPO in 1997, Amazon introduced “1-Click shopping” and began offering different products and services in various categories: music, DVD/video, home improvement, software, video games, gift ideas, kitchen and more.
These days, the company is making big money. For the second quarter of 2018, Amazon earnings reached $52.9 billion. In early September 2018, Amazon also became the second U.S. company after Apple to hit the $1 trillion mark in market value.
American Express was founded during the same excitable westward expansion that spawned Western Union. After gold was discovered in California in 1848, droves of pioneer settlers headed West and relied on express riders — the Pony Express being the most famous — to send and receive packages and currency from the East. Two of the founders of American Express, Henry Wells and William Fargo, split off to found Wells Fargo.
Like Western Union, American Express has continuously reinvented itself over its history. In its early days, American Express’s best customers were banks, which relied on American Express to shuttle stock certificates, notes and even currency between remote branches. In 1882, American Express began offering its own financial product, the money order. The company issued the world’s first traveler’s checks in 1891. At the turn of the 20th century, American Express went global, opening currency exchange offices across Europe.
After World War I, American Express entered the luxury travel business, organizing international tours and chartering cruises, including the first-ever “around the world” cruise in 1922. But the reinvention that made the biggest impact to American Express’s bottom line was its entry into the charge card business. The very first American Express charge card was issued in 1958. It charged $6 per year for membership, $1 more than its competitor (Diner’s Club), to establish itself as a prestige card. Today, American Express still thrives as a global financial services and travel company.
Apple has done more than reinvent itself; you could say it reinvented the “reinvention” business. Legendary CEO Steve Jobs didn’t invent any of the machines that made Apple a household name, but he and his design team made them infinitely better. Apple didn’t invent the personal computer, but the intuitive icon-based interface on the original Apple Macintosh blew the doors off the existing DOS-based home PCs. Apple didn’t invent all-in-one PCs or lightweight laptops, but it did introduce its own models with such style and user-centered design that no one remembers the awkward clunkers that came first.
Apple’s greatest reinventions came when it turned its attention away from computers and toward hand-held devices. Again, the iPod and iPhone were not the first MP3 player or smartphone, but their Zen-like design and advanced touchscreen technology revolutionized the gadget industry. With the iPad, Apple combined all of its recent reinventions — touchscreens, lightweight design, plus incredibly powerful processors and batteries — to breathe life back into the tablet, a gadget sector that was pronounced dead back in the 1990s. Apple’s next reinvention remains to be seen.
In 2013, Warren Buffett was the fourth wealthiest person on the planet, worth a reported $58.5 billion, thanks to a lifetime of savvy investments through his holding company Berkshire Hathaway. A Nebraska native, Buffett is nicknamed the “Oracle of Omaha” for his nearly prophetic intuition for picking winning stocks.
But few people know the strange story behind the creation of Berkshire Hathaway, the global investment powerhouse. In 1927, the Hathaway Manufacturing Co. built a textile mill in New Bedford, Mass. In 1955, it merged with Berkshire Fine Spinning Associates to become Berkshire Hathaway.
In the early 1960s, the U.S. textile industry was shrinking, and Buffett started buying Berkshire Hathaway stock for cheap and selling it back to the company for a profit. Then the company owners made a critical mistake — they made Buffett mad. The CEO quoted a price to Buffett on a package of stock, but tried to lowball him when it came to the actual sale. A peeved Buffett responded by buying a majority stake in the company and forcing the owners out.
Buffett eliminated the textile business in 1985 because of foreign competition, but kept the company’s name as the corporate holding company for his billions of dollars in global investments. It’s hard to imagine a more profitable corporate reinvention that Buffett’s takeover of Berkshire Hathaway.
Buffett once said that his takeover of the textile company was his worst trade. But it gave him a name for his powerful investing firm.
In 1984, IBM was the undisputed king of the computing world, with its iconic PC. IBM was successful because it didn’t try to do everything itself. Unlike Apple, which built every piece of hardware and wrote every line of software for its computers, IBM bought hardware components from smaller manufacturers and shipped its PCs preloaded with Microsoft Windows.
Ironically, the very strategy that made IBM the darling of Wall Street almost led to its demise. So-called “PC clones” soon flooded the market, each built with cheaper components and running the same versions of Windows. The large and lumbering IBM was slow to innovate, allowing nimble competitors to undercut its prices. In 1993, IBM posted the then-biggest loss in the history of corporate America — $8 billion.
The company, which had weathered technological revolutions from punch cards to supercomputers, had to make an incredibly difficult choice: innovate or die. The brave decision was made to abandon the core of its business model — building and selling low-margin PCs, computer chips, printers and other hardware. IBM’s new focus would be providing IT expertise and computing services to businesses.
By 2010, IBM had acquired more than 200 companies in the IT services sector. It also invested heavily in its server business, becoming the No. 1 seller of enterprise server solutions in the world by 2013. The reinvention of IBM is studied in business schools as a model of corporate evolution in the Internet age.
Lego has been around since 1932 and for years has been a hallmark toy in many children’s lives. At one point in 2014, Lego was even the top toy company in the world, surpassing Mattel’s Barbie doll, reported the Wall Street Journal. But the Danish toy company wasn’t always a star performer.
According to a 2015 Fast Company article titled “How Lego Became the Apple of Toys,” the company was reportedly on the brink of bankruptcy about 10 years ago. The growth of video games and the internet threatened the toy company. In reaction, Lego reportedly made a few mistakes. Eventually, by cutting costs, improving processes and managing cash flow, the company started to bounce back.
Next came a Lego line called Lego Friends, which appealed to young girls and fought the perception that only boys could play with the building blocks. But in 2014, when “The Lego Movie” hit theaters, things really started to change. The movie and its products helped Lego get the revenue boost it needed to overshadow Mattel in 2014, according to the Journal. Thanks to innovative products and a successful string of movies, Lego is more than just a toy now — it’s also a cool franchise.
According to Box Office Mojo, “The Lego Movie” grossed more than $469 million worldwide. Its sequel, “The Lego Batman Movie,” grossed $311 million worldwide. And according to the company’s 2017 annual report, net company profit was $7.8 billion.
In 2001, the book “Fast Food Nation: The Dark Side of the All-American Meal” came out — and it didn’t have that many nice things to say about fast food giant McDonald’s. Rob Walker wrote in a New York Times book review, “The aim of [author Eric Schlosser’s] book … is to force his readers to stop and consider the consequences of McDonald’s and its likes having become inescapable features of the American (and, increasingly, global) landscape — to contemplate ‘the dark side of the all-American meal.’”
Although it’s hard to tell if the book’s release directly — or indirectly — hurt McDonald’s reputation and brand in a monetary sense, the Wall Street Journal did report in 2003 that the restaurant posted its first quarterly loss in 38 years as a publicly traded company.
In the years since “Fast Food Nation,” McDonald’s has tweaked its menu offerings. McDonald’s currently offers healthy options including salads, milk, fruit and more, and makes its nutritional information available to consumers. In addition, McDonald’s has reinvented the fast food world by offering “All Day Breakfast.” No longer is McDonald’s only seen as the place to grab a Big Mac loaded with 500-plus calories.
In the second quarter of 2018, McDonald’s earned $5.4 billion in revenue. It was trading at $161.72 per share on Sept. 4, 2018. McDonald’s plans to spend more than it’s second-quarter earnings by shelling out $6 billion to make cosmetic upgrades for its restaurants. By 2020 McDonald’s will have new counters to enable table service, expanded McCafe counters and self-order kiosks.
The National Geographic Society published its first magazine in 1888 and printed its first stunning color photographs of far-flung locations, wild animals and exotic cultures in 1914. The yellow-bound magazine became a coffee-table staple for generations of American families, but started to hemorrhage subscribers in the 1990s as younger readers dismissed it as their grandparent’s mag.
National Geographic Society CEO John Fahey didn’t wait around for his publication to suffer the same fate as iconic photo magazines like Life. Instead, he spearheaded an effort to reinvent the National Geographic brand across all media platforms, especially the National Geographic Channel, launched in 2001.
In its TV programming, National Geographic shifted from sober nature documentaries toward an eclectic mix of reality series like “Ultimate Survival Alaska,” “Border Wars” and “Polygamy USA.” Some of the credit for National Geographic’s transformation belongs to Rupert Murdoch, a majority shareholder who is no stranger to sensationalistic success. Meanwhile, social networking and photo-sharing sites have given National Geographic a whole new way to showcase its gorgeous, award-winning photography.
Today’s generation probably doesn’t remember that in the late 1990s and early 2000s, “Netflix and chill” wasn’t as easy as firing up the laptop and picking out a movie or TV show to binge-watch with no commercial interruptions. Instead, Netflix was kind of like an online Blockbuster.
In 1998, Netflix launched the first DVD rental and sales site with Netflix.com. One year later, the company debuted its subscription service, which allowed movie buffs to rent unlimited DVDs for a low monthly cost and receive them by mail.
It wasn’t until 2007 that Netflix transitioned to online streaming. Finally, viewers of all ages would have access to some of their favorite shows and movies, as well as original Netflix content.
Although the company has received some negative feedback from customers due to pricing changes, it’s experienced financial success over the long term. For example, Netflix stock was trading at $3.55 at the beginning of 2008. On Sept. 5, 2018, the stock closed at $341.18.
These days, it’s safe to say that Netflix is one of the best stocks to invest in. In July 2018, Netflix announced 5.15 million new subscribers during the previous quarter, bringing its total base to 130 million.
The history of Nintendo began long before the Japanese gaming company released its monstrously popular Nintendo Entertainment System (NES) console in 1985. Nintendo Koppai was founded all the way back in 1889 as a playing card company by Fusajiro Yamauchi. In 1949, Fusajiro suffered a stroke and his 22-year-old grandson Hiroshi took over. Over the next 63 years, Hiroshi Yamauchi would transform Nintendo into the world’s most successful gaming company.
Anxious about the limited market for playing cards, Yamauchi tested other products and services, including a taxi company, instant rice, hourly hotels and toys. Nintendo had its first hit toy in 1963 with the Ultra Hand, an extendable plastic grabber with suction-cup fingers. Taking an interest in video game popularity, Nintendo got the rights to distribute the Magnavox Odyssey in Japan, the world’s first home video game console. In 1977, Nintendo released its first game console, the TV-Game 6, offering six versions of the same tennis game; it was eclipsed by Atari’s iconic 2600 console.
Yamauchi’s big break came at the arcade. In 1980, legendary Nintendo video game designer Shigeru Miyamoto created the first arcade version of “Donkey Kong,” featuring the hammer-wielding hero who would become Mario. When the NES console arrived in the U.S. in 1985, it featured Miyamoto’s classic “Super Mario Bros.” launching the best-selling video game franchise of the next three decades. Yamauchi remained at the helm of Nintendo until his death in 2013 at the age of 85.
In 1871, Finnish mining engineer Fredrik Idestam built a second paper mill on the banks of the Nokianvirta River near the town of Nokia in southwest Finland. He named his paper company Nokia Ab. In 1898, the Finnish Rubber Works began manufacturing rubber tires and galoshes. The companies were joined by a third manufacturer, the Finnish Cable Works, in 1912, eventually becoming the Nokia Corporation. Nokia brand rubber boots, with their clean and colorful design, were the company’s first breakout success.
In 1963, Nokia’s electronics division began making radio phones for the military and emergency services. By the late 1970s and early 80s, Nokia was making the world’s first commercial radio phones and car phones, cumbersome devices weighing a few pounds each. In the 1990s, Nokia sold off its rubber and paper divisions and focused exclusively on cell phones operating on the newly minted digital GSM network.
For an impressive 14 consecutive years — 1998 to 2012 — Nokia sold more cell phones than any other company in the world. But by 2014, Nokia was trying to find its footing in the smartphone market. Might be time for another reinvention.
Old Spice is no longer associated with “old” men, thanks to successful rebranding attempts. The antiperspirant — which debuted in 1937 as Early American Old Spice for women and then in 1938 as Old Spice for men — is now a popular brand for all ages, but it wasn’t always that way.
After experiencing decades of success, Old Spice began to lose sales as competition increased. A 2014 case study by the University of Southern California found that by the early 2000s, the company suffered from “an outdated brand image.”
In 1990, Procter & Gamble — which owns brands from Pampers to Gillette — bought Old Spice from the Shulton Company. P&G attempted to rebrand the product, but it wasn’t until Old Spice launched its “Swagger” Campaign in 2008 that it started attracting the younger demographic it needed to compete with brands such as Axe, according to the study. Old Spice’s real moment of reinvention, however, came two years later.
In 2010, NFL player Isaiah Mustafa starred in Old Spice’s “The Man Your Man Could Smell Like” campaign. You might remember it: Standing in front of a running shower with nothing but a towel on, Mustafa tells female viewers, “Hello, ladies. Look at your man, now back to me. Now back at your man, now back to me. Sadly, he isn’t me.” He goes on to suggest that if men switch to Old Spice, they can smell like him.
When the ad debuted on YouTube during Super Bowl weekend, it became a viral hit. And the campaign made an impact on sales, as well. AdWeek reported in July 2010 that overall sales for Old Spice body wash products jumped 107 percent after two new TV spots and online response videos debuted.
Royal Dutch Shell
One of the world’s largest and richest energy companies can trace its beginnings to a small antique store in London’s East End. In the 1830s, Marcus Samuel ran an antiques and collectibles shop specializing in decorative shells he imported from the Far East. His sons expanded this into a broader import/export business. Their ships would leave London stocked with machinery and tools and return from Japan and China with rice, silk and copperware.
By the late 19th century, the stage was set for a global oil boom. The internal combustion engine was fueling a transportation revolution that ran on oil. The Samuels built the world’s first bulk oil tanker to navigate the Suez Canal in 1892, adding tremendous efficiency to the oil delivery pipeline to Europe. In 1897, they renamed their shipping business the Shell Transport and Trading Company.
In the early 20th century, Shell merged with Royal Dutch Petroleum — its closest competitor in Far East oil fields — to join forces against John D. Rockefeller’s Standard Oil. The new Royal Dutch Shell Group replaced its former logo, a mussel shell, with the scallop shell, now visible at 44,000 Shell stations worldwide. The logo isn’t just a symbol; it’s a nod to the company’s beginnings as a decorative shell importer.
Samuel Morse sent the first telegraph message from Washington, D.C. to Baltimore, Md., in 1844, introducing the world to long-distance communication. Entrepreneurs rushed in to capitalize on this revolutionary technology, laying miles of telegraph lines to connect America’s young cities. One of those fledgling telegraph companies was the New-York and Mississippi Valley Printing Telegraph Company, founded in 1851. The company soon merged with competing telegraph networks and changed its name to Western Union.
At the peak of popularity, Western Union sent out more than 200 million telegrams in 1929. That business declined with the advent of cheaper long-distance phone service and was finished off by the Internet. Fortunately, the company has always had diverse interests. It started its wire money transfer business back in 1871.
The company also introduced a fax service in 1935, launched the first commercial communications satellite in 1974 and started one of the first commercial e-mail services, EasyLink, in 1982. Today, Western Union is the world’s largest money transfer service with more than 515,000 agent locations in 200 countries. The company sent its last telegram in 2006.
Wipro is one of the world’s largest and most successful IT services companies. Known as the “IBM of India,” its 145,000 global employees serve more than 900 clients in 61 countries. With billions of dollars in annual revenue from IT outsourcing and software engineering, it’s more than a little surprising to learn that Wipro is short for Western India Vegetable Products.
In 1945, Wipro began manufacturing and selling vegetable oil to Indian housewives. Over the next two decades, the company diversified into soaps, detergent, talcum powder, light bulbs and other consumer goods. It wasn’t until 21-year-old Azim Premji took over the company from his father in 1966 that Wipro first expanded into IT.
Premji moved the company’s headquarters to Bangalore — India’s Silicon Valley —in the 1980s, and started building PCs and designing enterprise software. Today, more than half of Wipro’s $6.9 billion revenue comes from the U.S., where it provides outsourced research and development and IT consulting services. Wipro still sells toiletries, lighting and other consumer goods under a corporate subsidiary called Wipro Enterprises Limited.