Which businesses are have missed trends and continued to focus on the wrong problems?

Which Businesses Are Focused on the Wrong Problems?

25 October 2024|Best Practice, Business Success, Challenges, Change, Leadership, Multi-Channel, Opportunity, Question a Day, Strategy, Vision

Question a Day

 

In the fast-paced business world, failing to spot and adapt to trends can spell disaster for even the most established companies. Whether it's ignoring the digital transformation, missing the health and wellness movement, or sticking with outdated business models, some companies have continued to focus on the wrong problems. Here’s a breakdown of businesses and industries that have fallen into this trap, along with specific examples and what they could do differently to align with market demands.

1. Retailers Ignoring E-Commerce Growth

The rise of online shopping has reshaped the retail landscape, yet some traditional retailers have been slow to embrace e-commerce. Instead of investing in a seamless online experience, they’ve doubled down on brick-and-mortar stores, even as foot traffic declines and consumer preferences shift.

• Example 1: JCPenney — Despite the growth of online shopping, JCPenney focused on physical store revamps and in-store promotions. This strategy backfired as foot traffic continued to decline, leading to bankruptcy in 2020. While competitors were enhancing digital experiences, JCPenney was stuck trying to revive an outdated in-store model.
• Example 2: Sears — Sears missed the e-commerce trend almost entirely. Rather than investing in its online presence, it continued to prioritize its catalog and physical stores, both of which became obsolete as Amazon and other e-commerce players rose to dominance. The result? Declining sales, multiple rounds of store closures, and eventual bankruptcy.

Solution: Traditional retailers need to pivot to an omnichannel strategy, integrating physical and digital experiences to meet customers where they are. This could include investment in user-friendly websites, mobile apps, and seamless online-to-in-store experiences.

2. Media Companies Chasing Clickbait Over Quality Content

In the digital age, media companies are under constant pressure to generate clicks and ad revenue. Unfortunately, some have sacrificed quality journalism for sensationalism, missing out on building long-term trust and credibility with their audience.

• Example 1: BuzzFeed — BuzzFeed initially thrived on viral content, clickbait headlines, and listicles. However, as audiences grew weary of sensationalist content, BuzzFeed struggled to transition into serious journalism. The company is now trying to balance high-quality reporting with its click-driven roots, but it missed an earlier opportunity to establish itself as a credible news source.
• Example 2: The Daily Mail — Known for its focus on celebrity gossip and sensational news, The Daily Mail generates plenty of clicks but has faced criticism for lacking substance and reliability. In a time when audiences are increasingly skeptical of fake news, The Daily Mail’s strategy has hindered its credibility and hurt its reputation as a reliable source.

Solution: Media companies should prioritize high-quality, fact-checked journalism and focus on building trust with their audience. By investing in investigative reporting and meaningful content, they can build a loyal readership that values accuracy over sensationalism.

3. Food and Beverage Companies Stuck in Unhealthy Offerings

As consumer preferences shift towards healthier, natural, and organic foods, some legacy food and beverage companies have continued to focus on sugary, high-calorie products. This has led them to lose market share to emerging brands that prioritize health and wellness.

• Example 1: Coca-Cola — Despite the health and wellness trend, Coca-Cola’s core product line remains centered on sugary soft drinks, which are increasingly seen as unhealthy. While the company has added options like Coke Zero and invested in other beverage categories, it remains heavily reliant on sugary drinks in a market that’s moving towards lower-sugar options.
• Example 2: Kellogg’s — Known for high-sugar cereals, Kellogg’s struggled to adapt to the demand for healthier breakfast choices. Though they’ve introduced products like Special K and low-sugar alternatives, they’ve been slow to innovate compared to new brands that market clean, natural ingredients and low sugar content.

Solution: Food and beverage companies should invest in product innovation focused on natural, organic, and low-sugar alternatives. This includes expanding into plant-based products, whole grains, and other health-conscious options that align with current consumer demands.

4. Automakers Chasing EV Hype Without Addressing Infrastructure

As electric vehicles (EVs) gain popularity, many traditional automakers have rushed to produce their own EVs to compete with Tesla. However, many have neglected to consider the need for supporting infrastructure, particularly accessible charging networks, which is critical for widespread EV adoption.

• Example 1: Ford — While Ford has released popular EV models like the Mustang Mach-E, it has been slow to build or support a dedicated charging infrastructure, relying mostly on third-party networks. This limits the appeal of their EVs for consumers who need reliable and convenient access to chargers.
• Example 2: General Motors (GM) — GM has committed to an all-electric future, but it has similarly under-invested in charging infrastructure. By relying on public charging networks and partnerships rather than developing its own proprietary solutions, GM risks making its EVs less practical for everyday consumers.

Solution: Automakers should invest in charging infrastructure, either through partnerships with existing networks or by developing proprietary networks. This will help ensure that EV owners have convenient charging options, which is essential for mass adoption.

5. Social Media Platforms Prioritizing Engagement Over User Well-being

While social media platforms have been incredibly successful in driving engagement, some have ignored growing concerns about user well-being. By focusing too much on keeping users online and maximizing interactions, they risk backlash over mental health concerns, misinformation, and negative public perception.

• Example 1: Facebook (now Meta) — Facebook has faced criticism for prioritizing engagement and revenue over user well-being. Reports have shown that Facebook’s algorithms amplify divisive or sensational content, contributing to polarization and mental health issues. Despite these issues, Meta has been slow to make meaningful changes.
• Example 2: TikTok — TikTok’s algorithm is designed to keep users engaged for as long as possible, often showing sensational or addictive content. This has raised concerns about its impact on mental health, especially for young users. While TikTok has introduced some features to promote “healthy” usage, the focus remains on maximizing screen time.

Solution: Social media companies should prioritize features that promote mental well-being, such as screen time reminders, content moderation to reduce harmful content, and algorithm transparency. Aligning with user well-being can help build trust and sustainability in the long run.

6. Telecom Companies Stuck on Data Packages Over Customer Experience

Telecom providers are often so focused on selling data packages and upselling premium services that they neglect customer experience and satisfaction. As consumers expect seamless, responsive service, telecom companies focusing too heavily on revenue per user rather than customer happiness risk alienating their user base.

• Example 1: AT&T — Known for its aggressive upselling and high fees, AT&T has often been criticized for poor customer service. Rather than focusing on improving service and transparency, the company has prioritized revenue-generating products, leading to customer frustration and churn.
• Example 2: Comcast — Comcast is infamous for its poor customer service and confusing billing practices. By focusing on upselling and increasing ARPU (average revenue per user) rather than enhancing the customer experience, Comcast has consistently ranked low in customer satisfaction surveys.

Solution: Telecom companies should prioritize customer experience by simplifying plans, improving customer service, and creating transparent pricing. Focusing on customer satisfaction can lead to longer-term loyalty and reduce churn.

7. Tech Startups Obsessed with Scale Over Sustainability

Some tech startups are so focused on scaling quickly that they ignore sustainability and profitability. This “growth at all costs” mentality can be problematic, especially when investor funding slows or external conditions change. Companies that prioritize growth over long-term financial health often struggle when forced to become self-sustaining.

• Example 1: WeWork — WeWork’s focus on rapid expansion without a sustainable profit model led to its near-collapse. The company leased high-end office spaces and relied on venture capital to fuel its growth, but failed to create a path to profitability, resulting in a very public financial crisis.
• Example 2: Uber — Uber expanded globally at an unsustainable pace, spending billions on subsidies to gain market share. However, the company has struggled to achieve profitability and is still dependent on heavy spending, making it difficult to operate sustainably without further funding.

Solution: Startups should balance growth with profitability, focusing on creating a sustainable business model that doesn’t rely solely on continuous rounds of funding. This can mean prioritizing profitable revenue streams and cutting unnecessary expenses to ensure long-term viability.

Conclusion

In a world where consumer preferences, technology, and business models are constantly evolving, companies that cling to outdated priorities risk becoming irrelevant. By identifying and addressing misplaced focuses, businesses can better align with market trends, improve customer satisfaction, and ensure sustainable growth.

Final Takeaways:

1. Retailers need to embrace digital transformation.
2. Media companies should value quality content over clicks.
3. Food and beverage brands should align with health and wellness trends.
4. Automakers need to focus on charging infrastructure for EV adoption.
5. Social media platforms should prioritize user well-being.
6. Telecom providers should improve customer experience over aggressive upselling.
7. Tech startups should aim for sustainable growth and profitability.

By tackling the real issues and adapting to changing markets, these companies can correct their course and thrive in an increasingly competitive environment.