Within a few short weeks the reports came out about 2 traditionalGlobal 5000 firms — American Airlines and Eastman Kodak — filed for bankruptcy. At the same time Facebook is filing for what is shpaing up to be one of the largest IPO’s ever. None of this is exactly news. American is one of the old line carriers that has never gone thru a restructuring or merger along the lines of United, US Air and Delta as example. The Kodak story has been watched for years as the transition from the film and camera business to the digital world never happened. Facebook represents the latest information and technology oriented firm to go big.
This shift change in businesses, like ships passing in the night, is not just about being in the right sector. It is about the companies and how they operated. We looked at the growth rate of all Global 5000 companies over the past 5 years which is 6.2%. Selecting the industries represented by these 3 firms, we find:
- Airlines = 6.1%
- Electronic Equipment = 7%
- Information Services = 5%
Now, looking at the CAGR of these 3 companies over that time frame, we find growth rates of:
- American Airlines (AMR) = minus 0.4%
- Eastman Kodak = minus 11.6%
- Facebook = 135% growth
There are a couple of interesting aspects here for marketers, enterprise sales and your internal database. For those selling to these firms, are the companies still built into your sales plans and quotas? At the same levels? It is unlikely that all thre of these companies will be purchasing what they have in the past at the same levels. What adjustments are you making?
One other implication here is that the fading companies look quite different than the fast growth firms like Facebook. Their cost structure and employment levels are very different as the new firms are not people intensive businesses. Add up a number of these transitions and it is easy to see how the unemployment picture is still a challenge. At the sales and marketing level for an individual company, the makeup of your products and services need to be adjusted as the makeup of the marketplace goes through transitions.