History is littered with bad business decisions that have led to the demise of big corporations, a significant drop in shares, or the passing up on lucrative deals and opportunities.
Even the biggest companies make mistakes most of the time and here is a list of some of the biggest business blunders ever made.
1. Japanese Firm Lost $225 Million Due To Typo Error
Typographical errors are relatively common in the office. It can become troublesome especially if you are trading in stocks and shares.
A Japanese employee learned this lesson the hard way when he accidentally switched around the figures for the sale of a single share for 610,000 yen.
This meant that 610,000 shares were sold for just one yen each. While there were attempts to cancel the transaction, it was too late, and his mistake cost the company $225 million.
2. Microsoft Rejected
Ross Perot had a chance to invest in Microsoft in 1979 but he didn’t view Bill Gate’s $40 to $60 million price tag for Microsoft as reasonable.
At the time, Perot’s Electronic Data Systems was worth approximately $1 billion, but the deal didn’t go through, and Ross Perot later told the Seattle Times that he believed passing up on the deal was “one of the biggest business mistakes I’ve ever made.”
3. Excite Passing On Google
In 1996, the former Excite CEO George Bell had the chance to purchase Google when it was still very small, for a reasonable and very meager price of just $750,000.
The only condition of the sale was that Excite would have to use Google’s search engine software. The deal didn’t appeal to the CEO of Excite, George Bell and he passed on it.
Google is currently worth $365 billion while Excite was bought out by AskJeeves after a significant drop in the value of their stock price.
4. London Publishers Rejecting Harry Potter
J.K. Rowling took her first book, Harry Potter and the Philosopher’s Stone, to lots of publishers including HarperCollins and Penguin but none of the publishing giants were convinced by Rowling’s wizarding world, and straight-up rejected it.
A small and lesser-known publisher named Bloomsbury agreed to take it on; after the CEO’s eight-year-old daughter begged her father to print it.
Years down the road and its become a very successful franchise worth around £19 billion, and the publishers who passed up on this are regretful of their decision I’m sure.
5. Decca Records Rejecting The Beatles
In 1962, Decca’s A&R Representative, Mike Smith invited the Beatles to an audition but was not impressed with their performance and ended up not signing them.
This decision meant that he rejected a band that would go on to be one of the best-selling in the entire world.
The Beatles instead joined EMI Records and of course, the rest is history.
6. New Coke Failure
Blind taste tests were carried out by Coca-Cola in 1985, and they learned that customers preferred the sweeter taste of their main competitor, Pepsi to theirs.
This did not sit well with Coca-Cola so they decided to change their 100-year formula and create “New Coke”, which inevitably crashed and burned.
The fans were not supportive of this newer, “better” formula, and demanded the old one back. After a while, “New Coke” was taken off the market for good.
7. Blockbuster Video Passing On Netflix
Home video rentals used to be king before Netflix. Blockbuster Video had the opportunity to purchase Netflix in the early 2000s for $50 million, Blockbuster declined, and this decision thus led to their demise.
According to former Netflix CFO Barry McCarthy, “They just about laughed us out of their office.”
Netflix is now one of the biggest brands in video sharing across the world while the home video rental market has since been relegated.
8. Software Error In Price
Alitalia Airlines had a massive slip up in 2006 that cost them $7.72 million.
When it comes to E-commerce, so many price glitches have occurred and most of the time this has been noticed and rectified, but not in this case.
Alitalia Airlines business-class flight from Toronto to Cyprus was listed as $39 instead of $3,900, this error led to 2,000 tickets being sold to bargain hunters on the site.
The company did try to cancel the purchases, but eventually honored them.
During the post-war boom of the mid-1950s, Ford was worried that newly-affluent consumers were trading their old Ford in for cars from rival brands. To compete, the company spent millions of dollars to send its researchers into the field on a quest to develop a new mid-priced brand that would fill the gap in its stable of cars.
But throughout Edsel’s three-year run, Ford only managed to unload 118,000 of them. The company lost $250 million on the debacle—a sum equal to more than $2 billion of today’s dollars.
10. Toy Story
When toy story was being developed, Pixar contacted several toy companies to see if they would allow the rights for their toys to be featured. Many of them didn’t agree – this included Fisher-Price and Mattel.
After its release, demand for dolls and other stars of the film increased significantly, to the extent that toy stores ran out of stock. Also, other brands were quick to book their place in the Toy Story sequels realizing their mistake and the sales they missed out on.