First written on November 01, 2008 Revised and Updated Friday, February 19, 2010 Feedback on article Great info. will surely be back..~ Business flops of famous brands When the foundation of a pyramid erodes, the top can be supported on nothing but money’ - Dr. Laurence J Peter Business flops or failures are fairly common amongst SMBs. However, even giant organizations can also make mistakes which can be very expensive. We are giving below two old case studies and the same is self explanatory. Ford Edsel Fiasco In 1952, Henry Ford II proposed to the then executive committee at FMC that they develop a revolutionary new car. This car was named 'Edsel' in memory of the founder's only son. By 1957, the Edsel had rolled out of the assembly lines. Millions of dollars were spent in promoting the new model of Ford and expectation level was very high. Unfortunately, the Edsel did not catch the fancy of the public. There was too many quality related problems. The push buttons tended to stick, hoods and doors would not open and oil leaks appeared after delivery. By the time the car was abandoned, FMC had lost an estimated USD 350 million. This was the largest write off then in US business history. The name Edsel became synonymous with massive failures for quite sometime till bigger business failures occurred. In the Edsel fiasco, no executive lost his job. All the people associated with it were relocated in the company. The designer of the car went on to become the chief stylist of commercial vehicles and another senior executive became an assistant to the then Divisional VP, (Late) Mr. Robert S McNamara, who later became a senior official in the US government.  He also served as President of the World Bank for some time. The failure of the car was attributed to wrong car for the wrong market at the wrong time. The executives were blameless. RCA computer division Fiasco RCA led by David Sarnoff, was a pioneer in color televisions in USA and made huge profits. In 1969, his son, Mr. Robert Sarnoff wanted to emulate his father in the field of general purpose mainframe computers. RCA was a dwarf as compared to IBM in computers. Robert Sarnoff brought in an executive from IBM to head their computer division. This executive brought in a number of IBM men, fired a lot of old guard at RCA or relegated them to non-person status. This new team tried various tactics and strategies to capture the market but failed at every step. Finally, Robert Sarnoff, called off the venture and received a USD 490 million write off, setting a new high in write offs then. In this fiasco, the division was closed but the top executive brought in from IBM to head the project stayed on and became a free floating apex with nothing to do in the words of Dr. Laurence J Peter. Over a period of time, RCA was acquired by GE. I conclude this article with a famous quote of Dr. Laurence Peter. He said ‘when the foundation of a pyramid erodes, the top can be supported on nothing but money’. Written by Madhavan Gopalachary The views, opinions and interpretations are personal. Sponsorship does not mean that the sponsors endorse them. © Copyright, Feb-10 . MMG Communications. Without prejudice. All rights reserved