Many marketing “gurus” talk about the benefits of focusing your business on a niche market. What they don’t talk about are the dangers…

Businesses can be so laser focused on their current market, they fail to notice the larger trends that are happening in their industry.

Here are some examples of businesses that made just that mistake – and paid a serious price!

Nokia Experiences A Rapid Fall

A fall from grace can occur at lightning speed…

Take Nokia, for example. In just five years, Nokia went from being the dominant player in the mobile business to completely abandoning selling handsets…

The fact that Nokia failed to notice the changes in its industry is actually pretty surprising. Historically, they’re a company that responds well to change…

The company began as a wood pulp mill, switched to making boots and tires, then finally moved into electronics and telecommunications.

And the venture into the electronics business proved to be Nokia’s most profitable. – the company doubled down and focused solely on handsets and networks. By 2007, it held 50% of the global market for smart phones.

But then… in came the iPhone, soon followed by Google’s Android.

Consumers wanted hardware and software brought together…

Consumer electronics, telecommunications, and software were no longer separate industries!

Nokia was slow to adapt – they failed to introduce their own touch screen capability or develop their own operating systems and apps.

Nokia had to cut 10,000 employees and close multiple plants…

And their handset business? Sold to Microsoft.

Toys “R” Us Loses Its Way

Toys “R” Us was once a behemoth in the toy retailing industry…

Huge megastores absorbed competitors – and put many, many others out of business.

But in the 2000s, the company failed to adapt fast enough to larger trends in the industry.

Toys “R” Us once had a monopoly on the best selection of toys at the lowest prices…

But then came online retailers like Amazon and a host of others. Amazon could now match Toys “R” Us on price – and offer a selection that no brick and mortar business could compete with.

Toys “R” Us was also being regularly bested on price by discount stores like Wal-Mart.

Smaller and more nimble toy merchants adapted by offering better service, or stepped it up wih an amazing in-store experience…

Toys “R” Us tried to remodel and relaunch the business, but it failed pretty dismally – and in 2005, the company was bought out by private investors.

Dell’s Disappearing Market

Dell is a fantastic entrepreneurial story… they exemplify the benefits of identifying an untapped niche market.

Unfortunately, it’s also a case study of what happens when you fail to adapt to changes in your industry…

At 19 years old, Michael Dell started PC Limited with $1,000 and a revolutionary new idea about the way the computers should be sold.

He would remove the middleman and sell direct to the consumer…

When the Internet arrived – giving Dell direct access to the customers he needed – his business boomed!

Dell built a solid business focused on the niche market of the DIY consumer who wanted an affordable computer…

A decade later, there was another major shift in the industry – one that Dell failed to notice this time.

Mobile devices arrived on the scene, and directly undermined demand for the cheap PCs that Dell sold. Dell eventually adjusted their strategy, but by the time they did, they’d already lost their position as market leader.

How To Avoid The Same Mistake

You can avoid the mistakes these market leaders made…

Yes, the “riches are in the niches,” but you need to pay attention to the larger trends in the industry…

Specialization still requires that you’re willing to change direction when necessary – and sometimes very quickly.

Fail to adapt and your business may just go the way of the dinosaurs…

In your corner,

Charlie