Of Twinkies and Brownies
February 22, 2012,
Warren Shoulberg Publisher/Editorial Director
Both are case studies of what happens when bad things happen to good brands.
The first was the bankruptcy filing last month of Hostess Brands, the company that makes Twinkies, among other baked goods. For this corporate entity it's a return trip to bankruptcy court, giving it that Chapter 22 designation that economic pundits love to point out.
Hostess' problems are many, from an expensive overhead to a consuming public that is increasingly moving away from eating unhealthy stuff - at least unhealthy stuff that tastes like crap. If you have not eaten a Twinkie since you were 12, you should keep it that way. It is a dreadful thing to put into your mouth and you should stick with your memories, which are much more tasty.
The other news involves Kodak, which also filed for bankruptcy, doing so last week after a slow death spiral that began nearly a decade ago. Kodak - which many of us of a certain age first came into contact with when we purchased a Brownie camera - has suffered for years from the decline in printable photography and the move toward digital pictures. No amount of Paul Simon-inspired imagery could slow that process down.
The irony is of course that Kodak is credited with inventing the digital camera, but it never pursued it as a viable commercial product, choosing instead the razor/razor blade model of selling film. Even more ironic is that in the product category Kodak chose to try to resurrect its business - printers for computers - it went with a model that put the profit on the machine rather than the ink. In other words, the exact opposite of both conventional practices and its own successful experience in film.
In hindsight, it's easy to dissect and second guess what both Hostess and Kodak should have been doing. The former needed to branch out into products better suited to changing consumer tastes and the latter needed to capitalize on its own strengths. But the damage has already been done and while no doubt some of the names and some of the products will outlive their corporate owners, neither company will ever be what it once was.
The take-away here is that all business entities need to examine their own organizations to make sure they are not committing the same sins. The roles of both home textiles suppliers and general merchandise retailers are full of companies that did not do that and paid the price ... often the ultimate one.
The stories of Hostess and Kodak once more are proof that business plans that are neither fully baked nor completely developed are rarely well done.
| Publisher/Editorial Director, Home & Textiles Today