Elon Musk can’t seem to stay out of the headlines thanks to his outlandish tweets and erratic behavior — and the Tesla CEO could be permanently damaging his company’s bottom line. But stepping down from Tesla would also be damaging, experts say.
“Elon is inseparable from Tesla and the brand,” Romit Shah, an analyst for Nomura Instinet, said on Bloomberg Television as reported by Forbes. “If he were to leave or take a lesser role, I think that it would be devastating for shareholders. What needs to happen is just a come-to-Jesus moment for Elon.”
While Musk’s “come-to-Jesus moment” is still forthcoming, many other major corporations have already come out on the other side after missteps and failures. Check out these well-known companies that were failing big time but ultimately turned things around.
In today’s world, iPhones, iPads and Apple Watches have become ubiquitous, and Apple is one of the most valuable companies on the planet — but it was once on the brink of losing it all.
Two decades ago, Apple was losing $1 billion a year, and the media was predicting an imminent shutdown. But when Steve Jobs returned to the helm, that all changed, HuffPost reported. Jobs launched revolutionary products like the iMac and the iPod, bringing Apple back to the cutting-edge of tech and making it a hit with consumers and investors alike.
The adage “if it ain’t broke, don’t fix it” applies well to Coca-Cola’s cautionary tale. On April 23, 1985, the company announced it was launching a new product to replace its original formula that would better suit modern tastes — but in reality, it was a cost-cutting measure to eliminate some of Coke’s priciest ingredients from its recipe, Business Insider reported.
Coke drinkers were outraged by the change and organized protests to express their disdain through phone calls and letters. Less than three months later, the company brought its original Coke back.
In 2015, FAO Schwartz suddenly shuttered its flagship store on Fifth Avenue in NYC. It seemed like all had been permanently lost for the iconic toy store, but the company announced a surprising comeback, with plans to open a new location just blocks away from where it once stood in November 2018. It will also open a second full-size store in Beijing in 2019, and additional pop-ups throughout the world.
Jack in the Box
In 1993, an E. coli outbreak linked to Jack in the Box resulted in hundreds of infected customers and even four deaths. Although it seemed like this would be the end of the chain, they miraculously bounced back thanks in large part to a successful company makeover. In addition to reinventing itself with a new walking, talking Jack mascot, the company recommitted itself to food safety, raising standards and assuring customers about changes to its procedures.
When Jorgen Vig Knudstorp took on the role of CEO of Lego in 2004, the company was on the verge of bankruptcy, Business Insider reported. One of the major issues with the company was that it had no concept of how much it was actually spending to create its toys, and in some cases, was selling them for a loss. Not only did Knudstorp revamp Lego’s fiscal strategy, but he also changed their approach to design. Instead of relying on existing in-house designers, Knudstorp recruited Lego superfans to join the design team to make the toys more aligned with what customers actually wanted.
Marvel movies have now grossed a staggering $6.87 billion at the box office, according to Box Office Mojo, but in 1996, the company declared bankruptcy.
Marvel had started rolling out movies through licensing deals with other companies as part of its plan to get out of bankruptcy — Blade was sold to New Line and X-Men to Fox. Both were huge box office successes but brought little money back to Marvel. The company then decided to bring its movie production in-house, a move that allowed Marvel to keep all of their superheroes in the same universe. The possibilities for sequels and crossovers could now be endless.
With a $525 million financing deal from Merrill Lynch, Marvel released several mega-hits, including 2008’s “Iron Man” and 2012’s “The Avengers” — both of which blossomed into billion-dollar movie franchises — and was sold to Disney in 2009 for $4 billion.
If you don’t personally have a Netflix account, you probably have access to the streaming service through someone else’s login. But in 2012, the company almost dug its own grave by splitting its business into separate services for borrowing DVDs and streaming, while also upping the subscription price dramatically. As a result of these changes, Netflix’s share prices dropped 72 percent, according to Fortune.
Despite the price hikes — and a significant dip in subscribers to the DVD rental service — Netflix is one of the most popular brands that successfully reinvented themselves. The company won customers over by giving them access to content any time, anywhere, and by creating a user-friendly interface and its own original programming, Entrepreneur reported. Through these changes, they were able to more than double their customers in just four years.
Before an inventive rebranding campaign, Old Spice was just that stale bottle of aftershave your dad had in his medicine cabinet. In 2010, the company launched its “The Man Your Man Could Smell Like” campaign, featuring over 180 clever videos that starred Isaiah Mustafa. The videos gained millions of views, and a rep for Procter & Gamble Male Grooming told Mashable that Nielsen figures showed an uptick in Old Spice sales as well.
In March 2014, Sbarro filed for bankruptcy — for the second time — after it failed to boost sales by updating its menu and closing down its worst-performing stores, Forbes reported. But just three months later, the fast-casual pizza chain exited bankruptcy thanks to new investors and a new concept: to become the Chipotle of pizza with its Pizza Cucinova locations. Four years later, the company is still serving up slices.
Toys R Us
Could a re-brand be Toys R Us’ savior? The toy company previously declared bankruptcy and closed all of its stores, but in October 2018, financial firms with holdings in the original Toys R Us brand announced plans to relaunch as a wholesale business called Geoffrey’s Toy Box, USA Today reported. The new venture will feature Toys R Us’ iconic mascot, Geoffrey the Giraffe. The lenders also said they plan to open Toys R Us pop-ups within other retailers, and they plan to relaunch Toys R Us and Babies R Us stores down the line.
Wells Fargo lost its reputation as a banking institution, its trust with consumers and $500 million in fines imposed by the Comptroller of the Currency when it was revealed that the bank had been opening accounts without customer permission and signing up customers for auto insurance that they never asked for.
But Wells Fargo has taken steps to recover from the scandal: they increased their contribution to low-income housing, invested in technology and projects that aim to curb climate change, and revamped their management culture, Forbes reported. In June 2018, the financial publication said that Wells Fargo “is on the comeback trail.”
Keep reading to learn about the biggest moneymakers and flops of top companies.
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