UK Companies that Succeeded Companies that Failed

UK Companies that Succeeded:

• Hanover Insurance (circa late 1980s) - Achieved an "extraordinary comeback from near-bankruptcy twenty years earlier" by implementing a company philosophy of integrity which "literally 'integrated' a large number of conflicting values". They trained their adjusters for "fast, fair, and friendly" service, constantly seeking to reconcile spurious claims with good service. By 1988, their profits stood at over $100 million, and their stock value had multiplied fourteen times.
• Hotpoint (various periods of success, notably mid-1980s onwards) - Had been "extraordinarily successful". They demonstrated a remarkable consistency in their ability to resolve dilemmas better than Creda or Thorn. Their better resolution of dilemmas correlated with better financial performance in 1987, showing a 12.5% return on sales and 34.7% return on capital employed. Their success under Chaim Schreiber involved a "partnership philosophy" with profit sharing, retirement benefits, and a focus on group performance and quality. They were also noted for their ability to combine scale and flexibility.
• Creda (moderately successful, notably mid-1980s) - Was "moderately so" successful compared to Hotpoint and Thorn. They attributed much of their success to their decision to improve functional coordination. In 1987, they showed a 9.1% return on sales and 23.1% return on capital employed. They aimed for better integration of differentiated subsystems as a strategic goal.
• Cook (early 1980s to early 1990s) - Moved from being barely profitable with a 2 percent market share to a highly profitable business with over a 30 percent share by delivering high-quality service to its customers.
• Richardson Sheffield (late 1980s to early 1990s) - Rose from being an almost bankrupt U.K. knife producer to becoming a world leader in profits and market share by its novel approach to customers, building customer value in stages.
• Weir pumps (early 1990s) - Renewed and achieved industry leadership.
• Edwards High Vacuum (early 1990s) - Renewed and achieved industry leadership by challenging its industry's values with durable pumps delivered quickly.
• British Airways, Wal-Mart, Japanese automobile producers, and Banc One (throughout the period discussed in "Rejuvenating the Mature Business") - These were cited as examples that rejuvenators followed, implying their success through dynamic strategies and challenging industry norms. Banc One, for instance, emphasised operational efficiency and technology, focusing on different business practices than leaders. Japanese automobile producers' success was founded on quality and productivity.
• Toyota (1980s onwards) - Achieved significantly lower defect rates and costs compared to U.S. firms like GM due to high standards of quality and efficient production. They also successfully bridged market segments with products like Lexus.
• Nintendo (early 1990s) - Generated exceptional added value for its partners with high sales and profits per employee.
• Benetton (early 1990s) - Was highly successful with creative management of its value chain, using retailers and suppliers for ideas and market trend testing.
• Lucas (period not explicitly stated but discussed in the context of rejuvenation) - Achieved successful rejuvenation in its brake factories through selling ideas, training, cell production, fewer supervisory levels, quality targets, and improved labour relations.
• British Steel (period not explicitly stated but discussed in the context of transformation) - Turned losses into profits by eliminating inefficient work practices and increasing productivity after a change in management perception.
• GEC (under Arnold Weinstock, mid-1960s onwards) - While the long-term strategic direction was later questioned, Weinstock's initial focus on cash and financial controls led to significant increases in productivity and profitability in the short to medium term. He transformed GEC by treating it as a series of autonomous operating companies focused on financial performance.

UK Companies that Failed or Faced Major Difficulties:

• Thorn (1980s) - "Fared disastrously, losing £10 million in 1987" and was sold off to Electrolux. They were consistently ranked last in resolving dilemmas compared to Hotpoint and Creda. Their distance to the ideal dilemma resolution position was the largest, correlating with poor financial results. Poor labour relations also hindered rationalisation.
• AEG, Hoover, Bauknecht (by the mid-1980s) - These European appliance firms experienced a decline in profitability, with AEG and Bauknecht going from profits to losses, and Hoover's profitability significantly decreasing. This suggests a failure to adapt to competitive pressures.
• Rolls-Royce Motors (early 1990s) - Was "lulled into complacency by strongly rising sales and profits during the 1980s and did not see the shifts that led to large losses in the early 1990s". They had not paid sufficient attention to internal indicators like rising costs and external factors like relative quality and customer satisfaction.
• Caterpillar (late 1980s/early 1990s) - Weak signals of an impending crisis were "drowned out by the false signals of a booming market and high profits." When the market downturn came, "Caterpillar's profits collapsed and its competitor Komatsu moved ahead". This indicates a failure to heed weak signals and adapt proactively.
• U.S. automobile manufacturers (late 1970s/1980s) - Showed early signs of "lost competitiveness" with Japanese firms gaining market share and being rated higher in efficiency and reliability. The U.S. companies' response was delayed until falling share significantly impacted profits.
• Textile companies of Lowell, Massachusetts (by 1920) - Despite rising sales until 1920, their market share had been declining since 1870 as the southern industry grew more efficient. When the market stopped growing in 1920, the manufacturers "suddenly collapsed" due to their earlier failure to adapt.
• Plessey (period leading up to GEC takeover) - Had a "fearsome reputation as a hire-and-fire company" with "random sackings" and subjective management appointments that were often disastrous. This likely contributed to instability and hindered consistent performance.
• Ferranti (late 1980s/early 1990s) - Suffered a "£215 million fraud" in its American subsidiary, which "so weakened the company" that it jeopardised a major contract. This demonstrates how external shocks and internal vulnerabilities can lead to significant business difficulties.