When a company goes out of business, this means that the company shuts its doors and is not any longer operational. Some companies shut down, because they go bankrupt or there is not a high enough demand for their services any more. Other reasons could be larger corporations entering directly into market, such as Wal-Marts (Which is putting the smaller department stores out of business.)
Why Companies Go Out Of Business?
- Because of the world economy going down and financial crisis in Europe, many businesses are starting to go out of business.
- Another factor that can affect a company is lack of inventory or a product that is not being sold, this can affect a businesses’ ability to keep its doors open.
- Some businesses that used to be highly profitable are starting to close their doors because of the changes in technology.
Businesses Going to Close in Year 2011-2012
- Blockbuster use to be a major business but it has lost $65 million in the last quarter. Being able to watch movies online via companies such as Netflix, and the DVD kiosks machines, such as RedBox, have put Blockbuster out of demand.
- The Dollar Thrifty Automotive Group, which is a car rental business, is another company that is going out of business. Both Hertz and Avis Budget are looking at buying the company. The Dollar Thrifty Automotive Group is 1.5 billion in debt and only operates 95,000 vehicles, which Hertz has 420,000 operational in its fleet.
- Radio Shack has been around since 1921 and was bought by the Tandy Company in the 1960s. There have been rumblings that Radio Shack is going to be bought out by BestBuy and of course, Best Buy will not keep the Radio Shack name.
- T-Mobile, which is a wireless server, has too much competition and is losing to its competitors, and will probably be going out of business in 2011 or by 2012. It is the 4th rated cell phone service in America, because most Americas prefer AT&T Wireless or Verizon Wireless for their cell phone service. T-Mobile was actually down in profit in 2009 and only has 34 million customers. T-Mobile is looking at a possible merger with Sprint-Nextel or Virgin Mobile, but will have to change their name.
Closing business is going to be the only option these companies have because of the economy and other factors.