25Apr

The confusing aftermath of a bad credit

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179In industries the world over, partnerships falter and crumble. Organizations large and small strive to work together and create something more than they can create alone—only to have the relationships disintegrate. Remember Quaker Oats and Snapple? Novell and WordPerfect? AT&T and NCR? The confusing aftermath of shattered partnerships usually leaves organizations and employees in turmoil trying to figure out what’s next for them. In the process, everyone involved wastes valuable time and resources, not to mention the goodwill of customers, stockholders, suppliers, and employees.

There are two dynamics I look at when I conduct an analysis of broken partnerships: opportunities for synergy and the styles of conflict resolution. First, I want to know about the synergistic possibilities that suggested the partnership in the first place. Partners come together for a reason. Generally, it’s the hope of achieving just the right combination of product mix, technology, information, or market access that will differentiate them in the marketplace. They want the gold ring. I try to understand the motivation behind the partnership. What was the vision? Why did these partners come together?

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23Oct

Don’t react emotionally to your credit

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Technically, the launch went well. However, even before they had tasted it millions of Americans disliked new Coke. Across the country and especially in the South, the birthplace of Coca-Cola, consumers reacted angrily and emotionally to the new formula. Thousands contacted the organisation’s headquarters in Atlanta. Remarkably, many were not Coca-Cola drinkers, simply American consumers disappointed at a major change to an iconic American product.

By mid-July, the pressure had become enormous, and Roberto Goizueta, the chairman, together with other senior executives announced that classic Coke would return. The news was leaked the previous day, and ABC News had interrupted daytime programming to break the story. The next morning headlines were filled with what insiders called “The Second Coming”. On the day of the official announcement, Coca-Cola’s hotline recorded 18,000 calls. For the first time in over two months people were positive, glad that their voices had been heard and that such a change had been aborted.

The company’s executives might have feared the consequences of reintroducing classic Coke, resulting as it did from unhappy customers, bad press and ignominious defeat. But the opposite occurred: it proved massively popular. Against all expectations, classic Coke outsold new Coke, and sales overtook Pepsi early in 1986.

Attempting to explain the renewed popularity of classic Coke, senior executives told the Wall Street Journal: It’s kind of like the fellow who’s been married to the same woman for 35 years and really didn’t pay much attention to her until somebody started to flirt with her.

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