Supply Chain

Some CEOs Never Learn

Oct. 23, 2010

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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About the Author

Andrew R. Thomas Blog | Associate Professor of Marketing and International Business

Andrew R. Thomas, Ph.D., is associate professor of marketing and international business at the University of Akron; and, a member of the core faculty at the International School of Management in Paris, France.

He is a bestselling business author/editor, whose 23 books include, most recently, American Shale Energy and the Global Economy: Business and Geopolitical Implications of the Fracking Revolution, The Customer Trap: How to Avoid the Biggest Mistake in Business, Global Supply Chain Security, The Final Journey of the Saturn V, and Soft Landing: Airline Industry Strategy, Service and Safety.

His book The Distribution Trap was awarded the Berry-American Marketing Association Prize for the Best Marketing Book of 2010. Another work, Direct Marketing in Action, was a finalist for the same award in 2008.

Andrew is founding editor-in-chief of the Journal of Transportation Security and a regularly featured analyst for media outlets around the world.

He has traveled to and conducted business in 120 countries on all seven continents.