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10 Great Companies That Lost Their Edge

With today's rapid technological change, companies rise and fall faster than ever before.   The list below represents 10 companies that were once the most innovative in their industry, then lost their edge. It's no Hall of Shame—most of these firms remain able competitors that might innovate their way back to greatness one day.Rather, their stories illustrate the way missed opportunities and tunnel vision can send even a mighty enterprise off-course. The lessons apply to many firms, whether large or small. Here are 10 firms that enjoyed enviable success, followed by unenviable stumbles:It's awfully hard to change the world—more than once. Revolutionary companies face many challenges, none more difficult than staying ahead when intoxicated with the spirits of success. Here are 10 once-transformational companies that tumbled from the top.   (1 ) Blockbuster  This video-rental chain remained flat-footed when Netflix started sending videos through the mail and cable and phone companies started offering video-on-demand. It's now fighting back, but Blockbuster is chasing its industry instead of leading it.          (2) Dell Dell began selling its computers directly to consumers just as the Internet was taking off, propelling it past entrenched competitors like IBM and Hewlett-Packard. But a decade later, Dell faltered as mobile devices began to displace PCs, cheap Asian machines cut into profitability, and big customers began to demand end-to-end service, not just hardware        (3) Kodak  Its breakthroughs are legendary: The original Brownie camera, Kodachrome color film, the easy-load Instamatic. But Kodak fell behind during the digital era, with halting efforts to expand into many other business lines that didn't work out.          (4) Microsoft  It helped launch the PC revolution and still dominates much of the software industry, but Microsoft has also fumbled or passed up many great ideas that others capitalized on, like Web TV, E-books, smart phones, and the tablet PC. Following through on breakthrough ideas has become a pronounced weakness.

(5) Motorola It dominated the cell phone market as recently as 2003, but Motorola fell behind when competitors outmaneuvered it with smart phones able to handle E-mail and other data. Motorola's cell phone division became a perennial money-loser, and the company now plans to spin it off into a separate company.                                                                                                                                        (6) Sear  This retailer put catalogs on the map and sold suburban Americans many of their household belongings for two generations. But it failed to react aggressively as discounters like Wal-Mart and Target claimed its turf, and Sears is now a troubled chain seeking salvation—and customers.        (7) Sony The Walkman was once as ubiquitous as the iPod is today, and Sony dominated the market for TVs, cameras, video recorders, and many other consumer electronics. But Sony failed to foresee the move from hardware to software, which put the emphasis on the brains of the device rather than the circuitry. Competitors like LG, Samsung, Vizio, and Apple gobbled up its market share..        (8) Sun Microsoft For 20 years, this computer firm offered just the right hardware and software for the Internet revolution. But after the dot-com bust, cash-strapped customers began running their computer systems from inexpensive PCs instead of the high-end servers at the core of Sun's product line. Sun tried to adjust, but its value fell and the firm was snapped up by rival Oracle earlier this year.  (9) Toys "R" Us This retailer thrived in the '80s and '90s, as its concept for specialty megastores aligned with a surge in American consumption. As it went national, Toys "R" Us drove many competitors out of business and gobbled up others. But it failed to adjust to discounters like Wal-Mart and Target and online sites like Amazon. An ongoing turnaround effort has led to many store closings and a renewed focus on quality and service.        (9) Yahoo ! It was neck-and-neck with Google in the beginning, but Yahoo tried to charge for some services and strayed into far-flung areas like original programming and video streaming that it has since abandoned. And it famously turned down a 2008 buyout offer from Microsoft that would have brought more than twice the company's current value. A turnaround effort is bringing Yahoo back to basics like aggregating entertainment, sports, political, and financial news and optimizing search-engine revenue.