Tuesday, February 8, 2011

Companies Losing Customers

Companies locked in a struggle to remain viable and maintain their profits and sales sometimes begin to run out of customers. This happened to GM (NYSE: GM), which had a 50 percent share of domestic car sales in the mid 1960s. GM’s portion of the American market is 20 percent today. Most of the business GM lost went to large Japanese manufacturers Toyota Motor (NYSE: TM), Honda (NYSE: HMC) and Nissan. The effects of GM’s failure where the loss of hundreds of thousands of jobs and an eventual Chapter 11 filings.

One reason that companies lose customers is that new competition often offers lower prices for similar products or services. American steel firms dominated the industry from the late 19th century until four decades ago. Japanese manufacturers began to offer cheaper products. More recently, steel production in China has increased sharply. The largest steel company in the world is India-based AcelorMittal which operates in more than 60 countries

Buggy whip companies could have been the first car makers, and newspapers could have been the first firms to put large amounts of news online. Neither happened. One new set of businesses were born. Older ones lost customers and some lost enough so that they were no longer viable.

0 comments:

Post a Comment