Reasons for Wangan's tragedy

What caused a powerful and prosperous young computer empire to collapse in just five or six years? The reasons, of course, are complex. The first was Wang An's failure to surge forward and launch new people. In his later years, Wang An lost his vigorous and enterprising spirit, he was stuck in his old ways in business, and his judgment tended to be slow, so that the company lost its original advantage of rapid change, which can be regarded as one of the reasons for Wang An's decline. With his genius, actually did not find to cheaper and multi-functional direction of the development of personal computers, will certainly eliminate his single function word processor and large body type microcomputer. While IBM and other companies endeavored to develop personal computers, Wang An refused to listen to his subordinates and refused to develop such products. When the computer industry was developing in a more open, industrialized, and standardized direction, Wang An insisted on his own old proprietary production line. Wangan's products not only failed to catch up with the new computer trend of developing highly compatible personal computers, but also lost the valuable features and performance of Wangan's computers. In the high-tech and fast-growing industry of computers, new product development and market disengagement will inevitably lead to a company's failure.

In addition, another important reason for Wang An's decline was that it departed from the modern corporate expert group control, employing the best management, and instead, like many Chinese companies, continued the traditional family management style, cronyism, resulting in inappropriate hiring. In November 1986, Wang An appointed his 36-year-old son Wang Lie as the company's president, despite the opposition of many directors and subordinates. In fact, Wang Lie's performance was poor when he took charge of the research department, and none of the more than 10 products he announced in 1983 were realized. Because of his mediocrity and lack of his father's ambition, coupled with a poor understanding of the company's business, the board of directors was greatly disappointed, and some of the top management who had followed Wang An for many years left the company in anger, causing great damage to the company's vitality. From the end of 1986, Wang Lie went to the middle of 1988, only more than a year, the company's financial situation deteriorated sharply, the 1988 loss amounted to $ 424 million In September 1989, Wang An, who was critically ill, had to personally announce the resignation of Wang Lie, to find another high-minded. 1990 Wang An died, Wang An company deteriorated, not only gradually lost the market, but also gradually lost the confidence of customers.

The company also lost the confidence of its customers.

Also, in the last three critical years, the company was indecisive in its decision-making, and did not make a firm choice to reduce product costs quickly. Instead of producing new products that more customers would expect, they extracted money from customers' pockets through repairs, software replacements, and other surcharges on products already sold. This kind of focus on immediate profit, damage to the company's image, and erosion of God's trust will also inevitably lead the company to the end of the road.

According to an analysis by the Asian Wall Street Journal, the biggest damage Wangan has done to its customer base is the company's dramatic increase in the cost of replacing software necessary to keep computers running. Whoever buys a Wangan mainframe must pay $5,000, compared with $1,000 previously.

Wangan's relationship with the companies that marketed Wangan computers, which sold customized Wangan systems to customers with special requirements, also deteriorated. When these companies called Wangan's engineers with technical questions, they were charged $175 per call. All of this not only lost the trust of customers, but also greatly hurt the partners, and ultimately led to the irreparable decline, which is the tragedy of Wangan.