First, when I google "why did creative fail", this blogger gave the best answer. He seems like a insider of the tech industry and I shall
Not parroted his views on the products.
However, at his hey days of late nineties, Creative did diversfy. It is a capital Venture company, investing on small Tech start-ups that look very promising with over 100 million profits in just 1 year. Thereafter, it is a roller coaster ride.
Even within the core audio market, there is clear market segment that creative want to capture and that is one period of time they were into the Internet business, broadband etc.
Also, unlike NOL which is slow in getting mega and green vessels and expanding at the wrong time. SIM did correctly spot the trend of personal entertainment devices, which is like known as MP3 player.
So what went wrong? Was it possible to spot it earlier? If u look at Creative numbers prior to 2004, the FCF is super high and beautiful albeit volatile, but never negative. So if u think only debts kill a company, u like me, could be placing too much faith in numbers such as FCF.
When its operating numbers start faltering, creative place big bets on ther personal entertainment devices market, believing that as first mover, they can capture that market. The segment revenue grow very strongly as it challenge Apple and it became the biggest segment of revenue generator but it's margin became raZor thin and subsequently become loss making.
That could well be the first red flag that "outsider" could spot without hindsight.
After looking at Creative and look at Venture, I read it's AR all over again. I think the remark of moving to higher margin product is "bullshit" but the actual fact is their major customer in printing and imaging is not doing as well due to competition and is starting to rely on in-house capability to produce. Nonetheless, that Venture never show a negative operating profits and did diversfy successfully means it might have avoid death. But was it just economic bad times? Not, I do not think Venture could go back to days where it could be a sexy "grower" again even if economy do turn very quickly. It might however be able to grow slowly.
This reading exercise highlight the risk of 1-2 major customer/ segment/ where if u fail, we could well be seeing dogs.
Then, it's sembcorp marine going the way of Creative? Was it a economic bad time or was it going to be killed by competition. I am hell cutting loss when marine announce Operating loss, even for sembcorp industries.
So, if u are looking at UMS or namlee who is highly dependent on 1-2 major customer, it pays to look at the customer closely.
When I am Driving to see a doctor today, I have this thought. I am like creative...
I used to be the "golden boy"
But have since lost some of the mojo judging by my pupils' results.
So how to prevent a Creative? Diversfy and capture new markets fast!! I better try new ways of teaching and see the results first! Different pupils are like consumers, what worked in the past seriously is not working well now, and my hybrid method of changing and improving my teaching at the corners is seriously not working well.
I have 2 new products, and 1 new production method, I only have 2 more months to show results. Hope reception is good.