Innovation is essentiell and Karstadt failed at this point (not only with the business model).

Malls face strong competition from trading over the internet where you are able to avoid crowds, nasty people and dissatisfied cashiers.

Facing strong competition and being unable to change the business model made this ship sink.

Much more interesting question is if the company would have survived with a flexible strategy and an innovative business model?

I really much agree on your point that the main reason for Quelle’s decline was to have missed the chance of innovation. But, I think for being innovative, you have to be aware of the need for innovation and therefore you have to have some slack time to distance yourself from the daily business. In my opinion, there have been some seriouse operational flaws that blocked the Quelle management from innovation or from being able to ask the three central questions. Only to name a few of the flaws: First of all Arcandor did not achieve to build synergies among buying departments timely, secondly they stopped to increase their marketing spendings after the phenomenal jubilee season 2002 and thirdly they had constant quarrels in the top management.
But how to prevent an organisation from getting lost in operational problems to keep the overview and the chance to be innovative??

Thanks for your comments. @Bettina, your are right that with hindsights it is easy to see what went wrong.

But even with foresight we can see certain characteristics in the field of strategizing. First, we are overconfindet about our future and our ability to predict the future. We believe that with market resarch (about past behavior) we can foresee the future. You find an interesting article by Charles Roxburgh from McKinsey at https://www.mckinseyquarterly.com/ghost.aspx?ID=/Strategy/Strategic_Thinking/Hidden_flaws_in_strategy_1288 Another great article about innovation killers in our resource allocation in firms you find with Clayton Christensen http://www.ascendcfo.com/pdfFiles/HBR-How%20Financial%20Tools%20Destroy%20Your%20Capacity%20to%20Do%20New%20Things.pdf

Interesting to read that Karstadt implemented ‘myworld.de’ already in 1995. Sad at the same time, that it never had relevance in the customers’ minds. What went wrong?

Annika

hindsight is easier than foresight. I would like to know what could have been the rescue for Karstadt and Quelle from your point of view. No, I have to correct myself I would rather like to know what is the great innovation idea for other mail-order houses when there is a competitor like amazon waiting for you.

Bettina