Failure stories allow us to learn from the mistakes that others have made, and they also highlight the importance of critical thinking in business. There are many factors at play when it comes to companies fail, particularly in their market expansion. In some cases, it’s a matter of poor planning or lack of experience; in others, there was just something about the idea itself that wasn’t appealing enough for customers to buy into it. Regardless of what led to these companies’ demise, however: there’s always something valuable to be learned from their failure stories!
You’ve taken the plunge. You’re going to expand your business. You have a good motivation for bringing your business into global stage or you just started a new business and don’t know where to begin. Or maybe you feel like you are driving directly to the failure trap. Whatever it is, you’re ready to take some initiatives for your company — and then reality hits: You don’t know exactly how to do what needs doing; you realize there are lots of competitors and market is not very easy to understand; maybe there isn’t actually enough demand for what you’re offering; maybe something else happens…anyway, something goes wrong and instead of success stories we get failure tales. And no one wants their story told like this! But here’s the thing — entrepreneurs are supposed to be brave! So let’s take a look at some common reasons why companies fail.
Main Reasons for Failure
Apart from the business model, there are many other reasons that can lead to a collapse. Here we have reviewed more than 30 failure stories and mapped out some common mistakes:
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Companies do not properly understand market dynamics before entering a new market, so they cannot win over their competitors well enough despite their strong skillsets or technologies.
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Many companies have failed because they focused on fast execution rather than seeking to learn from their mistakes quickly. They did not put enough emphasis on adapting to new market conditions.
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Some companies have certain issues in alignment with their management teams, not allocating enough resources and operational processes, which leads them into unprofitable situation eventually., etc
You should take these points into consideration before expanding you business. You can ask yourself several questions, such as what kind of market do you want to enter? What are your skillsets and technologies? How can you differentiate yourself from competitors? What type of management team and operational processes do you need to set up in order to succeed?
Mistake 1: Not Understanding the Market
The first reason for failure in a new market is not understanding the market. It is very important to understand your target customers, their needs and expectations before entering a new area. Understanding markets before entering a new market is crucial as different dynamics and expectations exist between different industries or geographical regions.
It is crucial to understand the market, but it’s not as easy as you think. You should start from comprehending buyer segments, their expectations and pains, competitors and other relevant factors. You should be aware of the following:
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The first step in understanding a market is to make a precise analysis of its structure and characteristics;
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Before entering a new segment it’s necessary to specify your goals and key points (what do you want from this particular project?) that need careful consideration when expanding into another region or country; otherwise you will lose focus on what is most important
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You must create an effective business development, sales and marketing strategy that will help you achieve your goals;
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It’s very important to identify and start from right entry positioning where you can reach out easily and sell products or services at reasonable prices
Being successful requires hard work, research and making sure you have the right people in place to gather feedback from customers. It’s also something that must be done continuously through the life of your business. This can be time consuming but it’s worth it because it will help ensure your company’s success.
Mistake 2: Focus on Fast Execution, Not Fast Learning
If you want to be successful in growing your business, it is very important that you understand the importance of learning and iterating fast. You cannot succeed if you focus only on execution speed without fully understanding what your customers need and how they behave. You need to be able to rapidly learn from customer feedbacks so that you can keep refining your solution until it matches perfectly with their needs.The key point of having a market-fit solution is understanding your target audience and defining right channels to reach them.
The best way to do this is by using an agile structure which will allow people in different parts of the team (marketing, sales etc.) to work with each other in order for them all to learn from each other’s experience. It also helps with creating a shared vision among everyone involved in creating the product so that everyone is aligned towards achieving the common goal of building a successful business around your global journey!
Mistake 3: Neglecting Teamwork
Another common reason for startup failure is not focusing on the team. The success of a business relies on its employees and their ability to work together effectively. That’s why you need to align your team members with a common goal and create an agile working environment that enables them to adapt quickly in order to meet business demands.
Alignment of sales and marketing teams in a common goal is one of the key points of success. If teams are not aligned or work with each other, it will be difficult for employees in both departments to come up with strong strategies for acquiring new customers or increasing conversion rates.
Realising you are in the Failure Trap
You might feel like you are in the Failure Trap when you:
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Your teams have different goals and these goals are not completely suitable with company objectives. Sometimes, teams may compete each other for more visibility instead of achieving their objectives.
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You lose to create interest in your solution, cannot convert them into your customers or your customers are no longer satisfied with the products and services you provide them.
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The momentum of bringing new things to the table has stopped and there is nowhere else to go, no new opportunities for growth in sight.
How to turn it around?
In hard times it is important to ask yourself why you are doing what you are doing and stick to your fundamental objectives in market expansion, entry or growth project.
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What is the problem that you are trying to solve?
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What is the value that you are trying to create?
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Which channels would bring the highest return to reach your potential customers, understand their expectations and delivering value?
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What did go wrong?
While answering these questions, it will become clear where exactly things went wrong, and what we need to do differently in the future.
Particularly in the beginning, it can be easy to get swept up in the excitement of your idea. But excitement is no guarantee for success. Take a step back and assess what needs to happen next. What do you need to do first? What resources do you need? And who can help?
You also need to be flexible so that when things don’t go according to plan—which they often won’t—you can pivot and adapt accordingly.
Asking questions is key here; research and try to learn best practices have done before. Analyze the key steps, root cause and decision factors in their journey.
It’s been very interesting to see the different stories from different markets. Some of the stories shared were about how they failed and then started again, while others were more about learning from their mistakes in order to keep moving forward. It’s clear that there are many lessons that can be learned from these failure stories; however, one thing is certain: anything worth doing will take hard work and perseverance!
Taking some curial points into consider and creating a well functioning business plan could make you away from the failure.
