5 Exciting Business Revival Success Stories
As businesses strive to survive in competitive markets, success is not a guarantee. Even the biggest corporations have the potential to fail.
While the following five companies are all household names, each of them has either gone bankrupt or has come close to shutting down at some point in the past. However, thanks to new management, creative business strategies and an awareness of brand potential, these major corporations are experiencing a revival.
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1. Hostess Twinkies
The Hostess Brand first formed in 1919. However, Hostess’ world-famous Twinkies pastries weren’t introduced until 1930. Despite Twinkies’ reputation as an iconic product, the company eventually accumulated $700 million in debt in 2004. By 2012, the original company folded, and new owners acquired the brand in 2013.
After two bankruptcies and five CEO changes in 10 years, Hostess closed 36 factories, abandoned 5,600 delivery routes and displaced 19,000 employees.
Once Hostess came under new ownership, the brand benefited from a modernized business plan. Its new owners, C. Dean Metropoulos and Andy Jhawar, invested a total of $250 million to revitalize the company, and their updated plant in Emporia, Kansas, hired 500 new employees.
Hostess still profits considerably from its most popular snack cake. Over one million Twinkies are produced every day, accounting for 80 percent of the brand’s total output.
The first Marvel comic was released in 1939, but the Marvel Universe wasn’t unveiled until two decades later in 1961. In 1999, Peter Cuneo became the CEO of Marvel, during a time when the company was in dire financial straits. However, Disney eventually purchased Marvel for $4.3 billion in 2009.
In 2000, Marvel owed approximately $250 million in high-yield debt, with only $3 million in the bank and 250 employees to pay.
However, Marvel was able to turn itself around thanks largely to the new licensing model put in place by CEO Peter Cuneo. This model included putting a renewed emphasis on print publishing as well as licensing out intellectual property and toy production to video game producers and Hollywood studios. The Marvel Cinematic Universe has been especially successful, grossing an estimated $10,916,958,583 around the world so far.
Nintendo’s first video game console, the Nintendo Entertainment System (NES), launched in 1983. They’ve been releasing new consoles ever since, selling over 703 million hardware units and 4.4 billion video games worldwide.
Two recent hardware systems, GameCube and Wii U, failed and threatened Nintendo’s viability in the console market. However, after the Nintendo Switch launched in March 2017, it managed to sell 2.74 million units within a month of being released. Releasing revamped versions of Nintendo’s most well-known games and relying on third-party developers to supplement game releases are two factors that have helped Nintendo become successful again.
4. LEGO Group
In 1932, LEGO was founded by Ole Kirk Kristiansen, with the famous interlocking LEGO brick launching in 1958. However, by 1998, the LEGO Group had to deal with its first financial deficit, and the company cut approximately 1,000 jobs in 1999. Despite this unfortunate turn of events, LEGO was still named “Toy of the Century” in 2000.
In 2003, net sales fell by 26 percent, toy sales fell by 29 percent and the company lost $223 million in pre-tax earnings.
LEGO reversed its fortunes by launching a “back to the core” marketing strategy, which put the company’s focus on the LEGO brick. LEGO established the Executive Innovation Governance Group. In 2014, the Lego Movie grossed over $469 million worldwide, and LEGO’s revenue grew to a total of $5.72 billion in 2015.
5. DeLorean Motor Company
John Z. DeLorean formed the DeLorean Motor Company in 1974, with the brand’s iconic DMC-12 debuting at the National Automobile Dealers Association meeting in 1977. By 1982, a combination of John Z. DeLorean’s legal battles and decreased sales directly led to the company’s end. However, Stephen Wynne stepped in and bought the rights to the DeLorean brand in 1995.
The New DeLorean Motor Company is headquartered in Humble, Texas. Thanks to a low-volume manufacturing bill, DeLorean is able to produce replicas of the 1982 model. While refurbished DeLoreans sell for $45,000 to $55,000, new DeLoreans are scheduled for production in 2017, and they’re expected to retail for less than $100,000.
The stories of these five companies can teach MBA students a variety of valuable lessons. Finding new success after failure required them to update and modernize their products and marketing strategies. By streamlining business practices, increasing manufacturing efficiency and recognizing the importance of brand loyalty, they’ve each managed to breathe new life into their respective companies.
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