Wednesday, April 22, 2009

Data-Based Decisions, Again

In Failing to Push Paper in the Digital Age, Gordon Pitts explains how AbitibiBowater, (it’s one of those huge companies that most people never hear of—it’s the largest manufacturer of newsprint) ended up in bankruptcy.

Many of the issues that this 95-year-old company are financial: the company assumed bigger is better and over-leveraged itself becoming big.

But a part of the problem is a failure to carefully read industry trends. Pitts describes how the company tried to continue growing despite a 20-year downward trend in the demand for newspapers, and never fully responded to that trend. Furthermore, one of the companies this one bought had as one of its best assets a top-notch CEO. But the purchasers did not that CEO in their top job. So when the bottom fell out of the news industry this past year, the bottom fell out of this company.

Read the full article at

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