10 Industries On Life Support
Advances in technology are another drag on companies whose failures drag down their industry. The rapid pace of technological developments may create industries and business opportunities. But traditional companies not forward-thinking or nimble enough to adapt will court failure.
Adding to the vicious circle, struggling companies are often forced to cut prices and reduce production costs. Doing so hammers away at budgets for R&D, as well as capital and technology investments. The resulting stagnation drags down these businesses, and their overall industry, even more.
In singling out wired telecommunication carriers as among the 10 barely breathing industries, IBISWorld points that revenues have dropped nearly 55% since $341.8 billion in the year 2000. An additional decline of 37.1% is projected over the next six years.
Big players such as AT&T (T) and Verizon (VZ) still dominate the industry despite losing a steady stream of customers, he says, because of their prominence in the wireless space for which many former customers are jumping ship.Record stores, van Beeck says, are a "sad story" hard hit by changes in how their customers now find, buy and listen to music. There may still be a strong, core following for traditional vinyl, but many shops haven't found a way to expand beyond that niche. The industry saw revenue plummet 76.3% since 2000, to about $2 billion. IBISWorld expects the bad news to get worse as they lose nearly another 40% by 2016. Van Beeck says record stores are a case study in not adapting nimbly enough to changing times. Bookstores, which bear conceptual similarities to record stores, are themselves in rough shape these days -- with the once giant Borders (BGP) now in bankruptcy. Their declines weren't substantial enough to make the cut of his ranking, van Beeck says. In fact, they may offer some hindsight into what record stores could have done -- creating a more customer-friendly environment with cafes and a more diverse inventory. The photofinishing industry has also lost its focus and vibrancy. "While Eastman Kodak (EK), Fuji Film (FUJI) and Ritz Camera were once major and prominent companies, they are just a splash of what they were in their heyday," van Beeck says. With about $1.6 billion in revenue last year, they have faced a decline of nearly 70% during the past decade. Revenue could drop another 40% by 2016, IBISWorld estimates.
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