By 24/7 Wall Street: Companies locked in a struggle to remain viable and maintain their profits and sales sometimes begin to run out of customers. This happened to GM, which had a 50% share of domestic car sales in the mid 1960s. GM's portion of the American market is 20% today. Most of the business GM lost went to large Japanese manufacturers Toyota Motor, Honda and Nissan. The effects of GM's failure where the loss of hundreds of thousands of jobs and an eventual Chapter 11 filings.
Sears used to be a dominant retailer. So did JC Penney. These wound up losing market share because of competition from Wal-Mart and a number of specialty stores such as Abercrombie & Fitch. This is nothing new. Microsoft was the only broadly available PC operating systems for years. Yahoo! was the No. 1 search engine until it was replaced by Google. Dell's leading spot in the PC industry was eroded by Hewlett-Packard which bought Compaq, and several Asian firms led by Lenovo and Acer.
One reason why companies lose customers is a lack of innovation. The Post Office did not move into the fax business. It did not offer e-mail addresses like AOL did. In other cases, large companies loosened their grip over the marketplace over time. Ninety-year old Kleenex had more than half the market share in tissues for decades. Store brands have pushed the market share of Kleenex down to 46% although it is still a highly profitable brand for parent Kimberly Clark.
Another reason that companies lose customers is that new competition often offers lower prices for similar products or services. American steel firms dominated the industry from the late 19th century until four decades ago. Japanese manufacturers began to offer cheaper products. More recently, steel production in China has increased sharply. The largest steel company in the world is India-based AcelorMittal which operates in more than 60 countries
Buggy whip companies could have been the first car makers, and newspapers could have been the first firms to put large amounts of news online. Neither happened. One new set of businesses were born. Older ones lost customers and some lost enough so that they were no longer viable.
Take a look at the ten companies running out of American customers and see which one you're most surprised to find in this list. Visit 24/7 Wall Street for more information.