---
title: "Case studies of successful and failed enterprises"
subject: "Entrepreneurship Development"
chapter: 7
key: "semester_7/entrepreneurship_development:success-and-failure-case-studies"
source: https://www.bctengineer.com/q/semester_7/entrepreneurship_development/success-and-failure-case-studies
site: BCT Engineering
---

# Case studies of successful and failed enterprises

Entrepreneurship Development · Chapter 7: Entrepreneurship and Economy

- Asked in: year not given, 6 marks
- Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14
- Page: https://www.bctengineer.com/q/semester_7/entrepreneurship_development/success-and-failure-case-studies
- Whole chapter: https://www.bctengineer.com/md/semester_7/entrepreneurship_development/chapter-7

## Question

Discuss the reasons for the success and failure of enterprises with one example of each.

## Short answer

Success comes from solving a real need, adapting and managing cash (Amazon); failure comes from ignoring change and clinging to one product (Kodak).

## Answer

#### Success example: Amazon (USA)
Started in 1994 as an online bookstore. Reasons for success:
- Strong customer focus: wide choice, low prices, fast delivery, easy returns.
- Reinvested its cash into logistics and technology instead of paying dividends.
- Expanded from books to many goods, a marketplace for sellers, and cloud services (Amazon Web Services).
- Willingness to experiment and tolerate failed projects; long-term thinking.

#### Failure example: Kodak (USA)
Kodak dominated film photography and even invented the first digital camera (1975). It failed to adapt:
- Feared that digital cameras would cut into its profitable film sales.
- Slow decision-making and over-dependence on one product.
- Competitors with digital technology took the market; Kodak filed for bankruptcy protection in 2012.

#### Common factors
| Success | Failure |
|---|---|
| Real customer problem solved | No market need |
| Capable, balanced team | Weak or divided team |
| Adaptation to change (pivot) | Resistance to change |
| Cash control, financing at right time | Running out of cash |
| Good timing and execution | Poor timing, weak execution |
| Learning from feedback | Ignoring competitors and feedback |

Studies of startups often report lack of market need and cash shortage as the two leading reasons for failure.

**Answer:** Success comes from solving a real need, adapting and managing cash (Amazon); failure comes from ignoring change and clinging to one product (Kodak).

## Check yourself

The answer's key points as multiple-choice questions, with the correct option and why.

1. Which was a reason for Amazon's success?
   A. Paying all profits as dividends
   B. Staying only in book retail
   C. Avoiding experimentation
   D. Reinvesting profits in logistics and technology with a strong customer focus
   Answer: D. Amazon reinvested profits, focused on customers and expanded into marketplace and cloud services. (Key point: Amazon's success reasons)

2. Why did Kodak fail even though it invented the first digital camera?
   A. It feared digital cameras would hurt profitable film sales and was slow to adapt
   B. It never invented any technology
   C. It had no film business
   D. It expanded too quickly into cloud services
   Answer: A. Kodak depended on one product, decided slowly and feared cannibalising film sales, so competitors took the digital market. (Key point: Why Kodak failed)

3. Which pair matches a success factor with its failure counterpart?
   A. Cash control vs strong brand
   B. Adaptation to change (pivot) vs resistance to change
   C. Capable team vs good timing
   D. Real customer problem vs running out of cash
   Answer: B. Success is linked to adaptation and pivoting; failure to resistance to change. (Key point: Common success factors)

4. According to the answer, which two reasons do studies often report as leading causes of startup failure?
   A. Too many customers and too much cash
   B. Lack of market need and cash shortage
   C. Strong competition and high profits
   D. Over-hiring and low taxes
   Answer: B. Studies often report no market need and running out of cash as the two top reasons for failure. (Key point: Leading failure reasons)

## Related in Entrepreneurship Development

- [Entrepreneurial ecosystem components and success stories](https://www.bctengineer.com/question.md?key=semester_7%2Fentrepreneurship_development%3Aentrepreneurial-ecosystem-components) — Entrepreneurship Development, chapter 7

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