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 ...

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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