Once the most prominent American retail group, Sears was founded in 1886 in Minneapolis, Minnesota by Richard W. Sears. The development of railroad structures allowed Sears to deliver products through this infrastructure. The dominance of this retail group was provided by the vast catalog that included various products for the home (Howard, 2017). The introduced structure did not limit the company, so actively introduced innovations.
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In 1925, the first department store was opened in Chicago. By 1929, at the peak of the Great Depression, stores reached 300. Pioneering the sphere of retail companies, Sears was the symbol of American capitalism. It was the largest employer and even the largest publisher due to its catalogs in America (YouTube, 2018). The situation started to change when in 1991, Walmart overtook Sears from the position of the largest retail. Losing the first position, the company began to fail in other segments too. Poor leadership, competition, and the appearance of more massive retail companies led to an ultimate decline of Sears.
The history of Netflix considerably differs from the dramatic decline of Sears. Netflix experienced both ups and downs in their development that built the largest entertainment company. Netflix was founded in 1997 by Marc Randolph and Reed Hastings in Scotts Valley, California. The initial service introduced by the company was DVD rental through the website. Customers ordered movies on Netflix and then received them through the mail (McFadden, 2020).
In 1999, Netflix introduced a subscription program expanding its customer base by 1 million. After declining the offer to collaborate from Netflix, Blockbuster opened a DVD retail service, becoming their main competitor (YouTube, 2016). Netflix could outperform its competitors and, in 2005, opened an internet video service. Adapting its programs for different setups, such as XBOX 306 and PlayStation 3, Netflix obtained ultimate popularity among the public (YouTube, 2016). However, during the development, Netflix committed some mistakes as well. Its cooperation and investment with Qwinkster DVD were a colossal misstep in their career, leading to declining. Netflix found the solution and in 2011 introduced the original show House of Cards that bet all previous records (YouTube, 2016). From that time, Netflix started to produce the hundredth of original content and aggressively continues developing now.
Comparing these two companies’ histories and present states, we could observe the impact of both internal and external factors. Sears was on the top of its sphere during the 20s century and provided unique service previously unknown for Americans. The company survived and grew during the economic downturns because of its uniqueness (Howard, 2017). With the pioneering new system, Sears expanded over the country, becoming the largest retail company of its time. Nevertheless, Sears appeared incapable of tolerating competition with low-price retails such as Target, Kmart, and Walmart (Howard, 2017). New companies introduced prices and discounts, while Sears offered luxurious traditional department stores. The poor leadership and inability to set an adequate strategy led to the company’s gradual demise.
Netflix appeared to be more tolerable of inner and outer changes in the world. The key factor was their ability to adapt their product for different instances. The rapid development of the Internet and the slight disappearance of their initial product, DVDs, made them choose another strategy (McFadden, 2020). They followed tendencies and adopted their product in PlayStation, smart-TV, and XBOX. Their quick actions during the decline in 2011 helped them recover and even increase the stock price. Additionally, Netflix did not limit their rate by the USA expanded around the world. Its response to internal and external factors was fast and initiative following all the trends. This ability helps them to be on the top of their sphere.
Sears and Netflix provide polar vision and reaction to changes in their spheres. From Sears’s history of decline, we could see a strong sense of traditions and nostalgia (Howard, 2017). The most successful retail company of the 20th century, the symbol of American capitalism, a pioneer in its cite, Sears was doomed to failure because of its inability to adapt. Sears resisted changing its traditions introduced over the century; therefore, it failed. In the case of Netflix, the company presents its flexibility and adaptation regardless of technologies and other difficulties. McFadden (2020) said the ability of Netflix to adapt to new technologies and change its course over time are the keys to its success. Netflix could have some barriers to change or transform; nevertheless, it successfully overcame them and followed modern trends.
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Netflix and Sears demonstrate two different approaches to changes: quick adaptation and fatal indifference. From the history of Sears, it is already known that the most significant change in its structure happened in the 1920s when the first retail shops started to open —following that, the company became the leader of its segment by pioneering setting traditions. The second dramatic change happened when low-cost retail shops analogous to Sears entered the sphere.
Losing their position, Sears just moved to another niche without changing old traditions. On the other hand, Netflix adapted from one technology type to another, enhancing its program and presenting new variations corresponding to modern demands. In the position of Sears leaders, I would prefer to follow and adapt to current trends. While in place of Netflix, I would carefully analyze further steps to avoid future mistakes.
Based on these two stories, it is clear that change is mandatory for a company’s prosperity. The scenario of Sears shows how an empowered empire could fall because of its incapacity to change according to trends. The case of Netflix shows how an unknown company could elevate to the top because of its flexibility and creative ideas. From ups to downs and from zero to hero, two different stories represent the importance of change.
Howard, V. (2017). The rise and fall of Sears. Smithsonian. Web.
McFadden, C. (2020). The fascinating history of Netflix. Interesting Engineering. Web.
YouTube. (2016). The History of Netflix. Web.
YouTube. (2018). The fall of Sears. CBS Sunday Morning. Web.