The ART Of Business

Some CEOs Never Learn

Here's an example of insanity rearing its ugly head again after the replication of the same mistake while anticipating a varied outcome:

Jones Soda used to be a hip, niche producer whose initial distribution strategy was built around selling through unique complementors like tattoo parlors and snowboarding shops.

The company had a small sales force that sought to grow the brand through its unique distribution channel. It was a solid model: an innovative manufacturer selling its innovations through loyal distributors. Exclusive deals with Panera and Barnes & Noble followed.

Then, the CEO at the time got a brilliant idea: Let's expand our sales and distribution further- and sell through Target and other Mega distributors. A tipping point, if you will. Sales volume surged, but profits evaporated.

Since early 2008- before the Great Recession hit- the company has hemorrhaged money; never earning a profit. The stock is stuck at around $1 a share.

Fast-forward to today: another CEO is brought in. What is the new strategy? To sell in 3,600 Wal-Mart stores, so as to increase sales volume. Wow...

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TAGS: Supply Chain
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