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It’s been proven time and again that when organizations are unable or unwilling to adapt to disruption, technological advancements, and evolving customer demands, they simply cannot survive in the long term.
Successful companies are a result of many things coming together, including smart risks, sustainable growth, financial gain, and corporate innovation. Unfortunately, there are a large mix of reasons why a company can fail, too, much of which comes down to neglected consumer trends and technology and not investing in the right sectors of the business.
Large Companies That Failed to Innovate
Whether it was due to too many stores existing, software solutions crumbling under an existing business model, a failure to adapt to the online advertising market, or a brand that simply failed to innovate, there are plenty of examples out there.
Below, we take a closer look at these 20 failed companies that learned this lesson the hard way.
1. Nokia
Nokia, the phone and cellular network company, was once known for being remarkably adaptive and forward-thinking, and so its eventual demise was a surprising one. The company consistently invested in research and development and invented its first smartphone in 1996.
But in the years that followed, this technology company failed to acknowledge the significance of software, including apps, and underestimated the rapid transition from standard mobile phones to smartphones.
Why the company failed
In 2007, Nokia was earning more than 50% of all profits in the mobile industry but most of those profits were not coming from smartphones. In contrast, the company’s biggest competitor, Apple, was paying equal attention to hardware and software development and was way ahead of the curve when it came to smartphone innovations.
By 2013, Nokia had just 3% of the global smartphone market and in August of the same year, it sold its handset and smartphone manufacturing business to Microsoft for $7.2 billion. It has since rebuilt and branched out into different areas. The once go-to phone maker now focuses primarily on telecommunications infrastructure as a data networking equipment manufacturer — and it’s seeing success. In the past year alone, Nokia Corporation’s market value has grown significantly, with its stock price rising by 44.03%.
Surprisingly, Nokia phones are back on people’s radar. The “dumbphone” trend, where folks revert to older-style and non-internet-dependent phones in an attempt to limit screen time, is on the rise. Nokia’s iconic 3210 has returned as a major player in this comeback. HMD Global is the company licensing the Nokia brand for phones (buying it from Microsoft in 2016), using the company’s legacy, simple approach, and a hint of nostalgia to market these devices, and it seems to be working.
2. Kodak
At one point in time, Kodak was the most famous and revolutionary name on the photographic film market. The company was largely responsible for developing cameras that were portable, affordable, transportable, and ultimately accessible to the average household. But Kodak failed to adapt to advances in technology following the invention of the consumer digital camera in 1975.
Why the company failed
Kodak long maintained the belief that its customers would continue to appreciate and value a printed image over digital photography. Unfortunately, that assumption was incorrect and the company failed to innovate—but by the time it halted sales of traditional film cameras in 2004, it was too late to recover its losses.
The company filed for bankruptcy in 2012 and has been working to reinvent itself ever since. In a strange turn of events, the company received a $765 million government loan from the Trump administration in 2020 to produce 25% of the active ingredients for generic medications in the United States.
While the company isn’t a key player in the photography camera space anymore, it has managed to somewhat financially recover by reinventing itself to focus on commercial printing, digital printing, and film manufacturing. There has also been increased demand for Kodak’s film products, particularly in the motion picture and still photography markets.
3. Blockbuster
“Neither RedBox nor Netflix are even on the radar screen in terms of competition.” This 2008 quote from Blockbuster’s CEO Jim Keyes came back to bite him — and hard. In the late 90s, Blockbuster owned 9,000 video-rental stores in the United States, employed 84,000 people worldwide, and had 65 million registered customers.
Despite partnering with Enron around this time to develop a video-on-demand service, Blockbuster was much too focused on the profits it was raking in from its video stores to commit to making the new service a success.
Why the company failed
The company seemed unwilling even to contemplate the fast-evolving shift in consumer behavior or how technological advances would impact its business model. Not only was Blockbuster incredibly slow to implement a DVD-by-mail service, but customers were quickly growing frustrated by the company’s late fees.
In addition, online business and the digital revolution were beginning to take off, and Blockbuster failed to innovate. The company also had to compete with other brands in the electronic entertainment industry, whether it was a video game or new method of watching films. It wasn’t long before Netflix started eating into the company’s profits and by 2010, the company decided to file for bankruptcy with over $900 million of debt.
4. Myspace
Myspace was once considered to be the coolest social networking site, and between 2005 and 2008, it was certainly the most popular. At its peak in 2008, the site was attracting 75.9 million unique visitors a month. Although it was viewed as one of the most innovative companies in the beginning, the business began to break down.
Why the company failed
There are two key reasons for Myspace’s demise. Firstly, Facebook came through with a far superior and more user-friendly service. Not only did it have cool features like the now iconic Facebook newsfeed, but it better facilitated communication and networking for its members.
Secondly, Myspace was poorly managed. The site was acquired by News Corporation for $580 million in 2005 and the company’s culture quickly shifted. Instead of focusing on optimizing the user experience or boosting its research and development team, driving ad revenue became a top priority and the site was quickly saturated.
As a result, Myspace members began migrating to alternative platforms. Between 2009–2011, the site lost over one million users per month. In 2011, Myspace was purchased by Specific Media for $35 million, over $500 million less than News Corp had paid six years previously.
5. Toys “R” Us
Toys “R” Us was a much-loved children’s brand and one of the largest toy store chains, with more than 700 stores across the United States. But in recent years, the kids’ toy retailer struggled to adapt to the rise of e-commerce and lacked creative vision.
Ultimately, it failed to innovate and provide a convenient, enjoyable, personalized, or competitively-priced shopping experience for its customers. It didn’t help matters that the company was suffocating under billions of dollars of debt, precluding much-needed investment in its stores to modernize its service offering.
Why the toy retailer failed
The company filed for bankruptcy in 2017, listing $7.9 billion in debt against $6.6 billion in assets. Toys “R” Us made a low-scale comeback in 2019 to compete with other toy vendors, opening two mall stores for the holiday season with a focus on open play areas, interactive displays, and spaces for private events like birthday parties. Both of these stores closed not long after they opened.
However, the company didn’t give up on its comeback dreams. As of 2025, Toys “R” Us operates two standalone flagship stores in the U.S.—one at the American Dream mall in New Jersey and another at the Mall of America in Minnesota. There are also over 450 shop-in-shop locations within Macy’s stores across the U.S. In the U.K., Toys “R” Us has partnered with WHSmith to open 76 shop-in-shop locations on high streets nationwide. While it’s no Amazon, Toys “R” Us also has an e-commerce platform.
6. Yahoo
Yahoo first launched in 1994 and quickly became a global leader and the go-to portal for email, news, and web searches. Despite its creation during the digital revolution, the company’s failure came about as the result of several bad business decisions and its lack of corporate innovation.
Why the company failed
In 2002, Yahoo missed an opportunity to buy Google for $1 billion and then Facebook for an alleged $1.1 billion in 2006. Yahoo has also been criticized for mismanaging Flickr and Tumblr, failing to prioritize the recruitment of high-caliber programming staff, and a lack of vision among its leadership team. This string of failures culminated in Yahoo’s sale to Verizon in 2016 for just $4.8 billion. For comparison, the company was valued at $125 billion at its peak in 2000.
Yahoo is making a quiet but strategic comeback in 2025, with a high-profile Super Bowl ad starring Bill Murray marking its return to major marketing. Under CEO Jim Lanzone, the company is focusing on core strengths like news, finance, and sports, where it now ranks among the top platforms in the U.S. The company is (finally) embracing AI, integrating technology from its recent acquisition of Artifact to personalize its News and Finance sections.
7. Xerox
In 1970, printer company Xerox launched the Xerox Palo Alto Research Center (known as Xerox PARC) to develop the technologies of the future. Technologies such as laser printers, the Ethernet, and a prototype of the modern PC were all invented at the Xerox PARC.
Why the company failed
While the company invested heavily in research and development and achieved some revolutionary innovations, it struggled to capitalize on market potential and achieve commercial success, eventually losing out to an organization with a better-established brand and a much bigger vision.
Despite having developed the graphical user interface (GUI) and a commercial version of the mouse, it was Steve Jobs and Apple who reaped the success for these inventions when the Macintosh Computer was launched in 1984. Ultimately, Xerox was unable to seize the right opportunities to leverage its ideas and innovations and run a profitable, commercial business.
Xerox is trying to have a better 2025, hopefully improving its performance and market position. The company has restructuring plans, which include diversifying into new areas like digital services and IT solutions.
8. Pan American World Airways
Pan American World Airways (Pan Am) at the time was the largest international air carrier in the U.S. The company began in 1927 and was one of the first American airline companies to fly internationally.
The company founded a mail carrier service before it even began carrying passengers to and from destinations. Once it added these flight routes and new destinations, it was viewed as an incredibly innovative company. Unfortunately, its large fleet size, fancy features, and trained personnel weren’t enough.
Why the company failed
Competition in the airline industry is ultimately what struck down Pan Am. Although it helped usher in and embrace many new innovations in the aviation industry, it wasn’t enough to keep the company afloat. Alongside this, the price of fuel and a waning interest in travel due to the recession.
The company called it quits in 1991 and had to sell all of its assets. A railway corporation later purchased the logo and bore the name Pan Am Railways. This was later bought out by another rail company.
9. Segway
Most will remember the personal motorized scooter invented by Segway, one that is still seen in many tourist destinations today. Segway came to the market in 2001, founded by Dean Kamen.
Company leaders at the brand overestimated how successful the two-wheeled invention would be. Even with commercial partnerships, physical stores, and its own e-commerce presence, it faltered.
Why the company failed
Although it may have seemed to be a good idea, the Segway PT wasn’t actually solving a true gap in the market. Regardless of whether or not it was a great invention, the company didn’t continue corporate innovation.
The Segway PT was difficult to ride and maneuver and led to many accidents and injuries. This self-balancing motorized gadget wasn’t nearly as easy to use as a standard scooter and the company failed to innovate despite all the technical flaws and as electrical scooters gained popularity.
Later, it was acquired by Ninebot Inc., and although it still sells some versions of the upright scooter, it has since expanded into electric scooters, go karts, and eMopeds.
10. Bed Bath & Beyond
Bed Bath & Beyond, once a dominant force in home goods retail, filed for Chapter 11 bankruptcy in April 2023 after 52 years in business.
Why the company failed
The company’s decline was marked by a series of strategic missteps, including a shift from popular national brands to private-label products under CEO Mark Tritton, which alienated loyal customers.
This change led to a significant drop in sales, with revenues falling 33% in the quarter ending November 2022. Coupled with mounting debt and an inability to compete with online retailers, the company exhausted its financial resources and was forced to close all 360 of its stores by June 2023.
In June 2023, Overstock.com (now Beyond Inc.) acquired the Bed Bath & Beyond name and associated intellectual property for $21.5 million in a bankruptcy auction, launching as an online-only retailer. In partnership with The Container Store, Beyond now features Bed Bath & Beyond-branded products in over 100 locations across the U.S. There has also been a $25 million deal with Kirkland’s Home to open smaller, 15,000-square-foot Bed Bath & Beyond stores nationwide.
11. Rue21
Teen apparel retailer rue21 was founded in 1970 (then known as Pennsylvania Fashions) and, by the early ‘90s, was the place to shop for school dances, summer break, or just to keep up with the latest trends. It was often seen as a slightly edgier, more laid-back, and budget-friendly version of Hollister or American Eagle.
The company, fueled by its success and popularity among youngsters, aggressively expanded in the early 2010s, opening hundreds of stores across suburban malls. At its peak, it had over 1,200 locations. However, this growth happened just as mall traffic began to decline and consumer behavior shifted toward online shopping, which was spiked by the COVID-19 pandemic. Instead of adapting, rue21 doubled down on brick-and-mortar, spreading itself too thin with stores in underperforming locations.
Why the company failed
While other fashion retailers invested in digital experiences and omnichannel strategies, rue21 was slow to modernize its website and lagged in mobile optimization, online marketing, and fulfillment logistics. The company filed for bankruptcy for the third time in May 2024, announcing plans to close all 540 stores.
Despite a $25 million investment from existing lenders in 2022, rue21 was unable to adapt to the changing retail landscape and failed to find a buyer willing to pay more than the liquidation value of its assets. However, in June 2024, rue21’s assets were acquired by YM, Inc., which owns Charlotte Russe and Urban Planet. Seven rue21 stores were reopened in Tanger Outlets centers, and there are plans to reopen up to 120 more soon.
12. BlackBerry
BlackBerry, once a pioneer in the smartphone industry, experienced a slow fade that was felt not only by the company but also by many avid fans. People loved BlackBerry devices for their tactile keyboard, which made typing faster and more accurate than on early touchscreen phones. The phones were also incredibly durable, with battery life that outlasted most competitors. It was the phone for executives, celebrities, and even world leaders.
Even now, there’s a deep nostalgia for BlackBerry. But alas, BlackBerry’s reign did not end with a bang. The company’s refusal to adapt quickly to touchscreen trends and app ecosystems, combined with the meteoric rise of iPhones and Androids, left it behind.
Why the company failed
BlackBerry’s focus on physical keyboards and proprietary operating system left it unable to compete with other phone manufacturers’ user-friendly interfaces and extensive app offerings. The company’s delayed response to market trends and overconfidence in its existing product line contributed to its downfall.
By the time BlackBerry attempted to pivot, the market had already moved on, and the company shifted its focus to cybersecurity and enterprise services. The company officially exited the smartphone business in 2016 and shut down legacy support for its operating systems in 2022. Every so often, a BlackBerry news story pops up, teasing the comeback of the beloved phone — but so far, nothing has materialized.
Other Failed Companies
The list of companies that failed to innovate doesn’t end here. In addition to these examples, there are major company fallouts in other categories, too.
JCPenney
JCPenney was one of America’s largest department store brands. Although it quickly adapted and became one of the first online retailers to get a website and have both an online and catalog business, it couldn’t quite keep up. After too many shifts of its model and intended audience, it hasn’t made a successful comeback.
IBM
In the technology company sector, International Business Machines (IBM) initially found success after the personal computer revolution and invested in consumer electronics. After the creation of the IBM personal computer, it quickly became an enormous hit. The American multinational technology company managed to climb into the spot of the most valuable company in the world in the 1980s and later branched into enterprise software. The company lost its touch regarding innovation, though, and crashed and burned later.
Tower Records
The retail music store Tower Records also experienced a major loss. Although it wasn’t slow to innovate, this came at an expensive cost. It also had to compete against illegally downloadable music online, and the retail music chain shut down in 2006. It came back from the grave in 2020 as an online retailer.
WeWork
WeWork, once valued at $47 billion, filed for Chapter 11 bankruptcy in November 2023. The company’s rapid expansion and unsustainable business model, which involved long-term lease commitments and short-term client agreements, led to significant financial losses. Leadership issues, including the ousting of founder Adam Neumann, and the impact of the COVID-19 pandemic further exacerbated WeWork’s challenges. Despite efforts to restructure and cut costs, the company could not recover and filed for bankruptcy.
Borders
A key competitor to Barnes & Noble, Borders was once a major force in the book retail world. However, it failed to embrace the digital reading revolution with e-books and online retail, choosing to outsource its online sales to Amazon instead of building its own platform. While competitors invested in e-readers and diversified their offerings, Borders clung to traditional retail. It filed for bankruptcy in 2011 and closed its stores shortly after.
Polaroid
Famous for its instant film cameras, Polaroid had one of the most iconic and beloved consumer products in photography. But it failed to adapt to the shift toward digital photography and smartphones. After filing for bankruptcy in 2001 and again in 2008, the company has since pivoted to novelty products and retro-style cameras, but it remains a shadow of its former self.
AOL
A pioneer of the early internet, AOL was once the gateway to the World Wide Web for millions. Known for its dial-up services, “You’ve Got Mail” alerts, and massive media acquisitions, AOL struggled to evolve beyond its dial-up internet services and lost relevance in the broadband era. A disastrous merger with Time Warner in 2000 further accelerated its decline. While the brand still exists in limited form under Yahoo’s parent company, its relevance is long gone.
Sears
Sears was once America’s largest retailer, complete with mail-order catalogs and department stores that customers loved. Unfortunately, the company failed to modernize its business model to keep up with e-commerce. It neglected its physical stores and suffered from years of poor leadership. Instead of adapting, Sears sold off valuable assets and doubled down on a failing strategy. It filed for bankruptcy in 2018 and has closed most of its stores, becoming one of the most striking examples of retail’s inability to evolve.
While many of these brands failed to innovate, it’s not the end of the story for all of them, like Tower Records, IBM, and Nokia. Outstanding technological innovation mixed with new leadership and direction changes means many of these companies have come back from the dead or rebooted. Some haven’t been so lucky, making for cautionary tales across many industries.
This article was originally written by Laura Ross and Melissa Epifano and updated by the Thomas Insights team in April 2025.