I had a picture of Wendy on my wall, Weinstein recalls. Quaker Organic Instant Oatmeal is USDA-certified organic and made with 100% whole grain oats. Although the merging sounded strategically compelling, the two companies could not manage to merger due to cultural variation. In most corporations, brand marketing sounds like a form of warfare. However, within three years Quaker . In November 2000, shortly after Triarc sold Snapple to Cadbury Schweppes, I posed those questions to Triarcs top executives: chairman and majority owner Nelson Peltz, CEO Mike Weinstein, and marketing director Ken Gilbert. Snapple's purchase was made just as sales in the category were slowing down and competition from newcomers and large beverage giants such as Pepsico and Coca-Cola was heating up. The acquiring management also fumbled on Snapple's advertising, and the differing cultures translated into a disastrous marketing campaign for Snapple that was championed by managers not attuned to its branding sensitivities. It took Novell Inc. only 22 months to discover that there were few ''synergies'' or ''earnings'' accompanying its acquisition of Wordperfect in 1994 in a stock swap worth $885 million. Definition, Meaning, Types, and Examples, What Is Horizontal Integration? With a $35 billion price tag, the merger did not pay off. Its also been selling its own brand of trendy drinks under the Mistic name. It's easy to do! Quaker Oats' decision to sell its Snapple Beverages unit for an enormous $1.4-billion loss is one of many acquisitions that went bad for buyers. Nextel was too big and too different for a successful combination with Sprint. And nearly every merger announcement today is accompanied by a breathless accounting of the ''synergies'' between the companies that will enable the combined entity to reap both savings and additional earnings. Its tempting to say that Triarcs executives understood and embodied the quirky spirit of the Snapple brand in a way that Quakers marketing team never did, and Triarcs executives arent inclined to disagree. In October 2000, Triarc, the privately held outfit that took Snapple off Quakers hands, sold the brand to Cadbury Schweppes for about $1 billion.1 The turnaround would be astonishing in any industry, but especially in the beverage-marketing business, where short-lived brands are depressingly common. Ever wonder why it's not Charlie and the Chocolate Factory, like the book? They gave Triarc a chance, I would submit, because Triarcs presentation convinced the distributors that Snapple once again had an owner that understood the spirit of the brand. Technological dynamics of the wireless and Internet connections required smooth integration between the two businesses and excellent execution amid fast change. The Quaker Oats Company, founded in 1891<br><br>William D. Smithburg appointment as CEO in 1979<br> 4. The CEO of Quaker Oats William Smithsburg had his reputation disturbed and he had to fire a good number of employees as he was running out of resources due to decline in sales. GE bought Kidder for $600 million in 1986, but had invested an additional $800 million in the firm between the purchase and the sale. Wall Street had warned saying that the amount is excessive, to acquire a company. You can just see him serving up a piping hot bowl of oatmeal to his kids, and he's about as far from Tony the Tiger as you can get. We believed Snapple had tremendous possibilities, Quaker spokesman Mark Dollins said. Because they embody the same values Quaker Oats wanted to be associated with: "honesty, integrity, purity and strength.". Until Quaker Oats possessed Snapple, it caused them a loss of $1.6 million on a daily basis. This explanation, I believe, will provide the framework for understanding Triarcs and Quakers contrasting experiences with Snapple as our story unfolds. Quaker Oats Company, former (1901-2001) Chicago-based American manufacturer of oatmeal and other food and beverage products. Who can help student-athletes cash in? There was no such mismatch between Gatorade and Quaker. But that was enough. "Mikey" was almost "Tim", and while we'll never know if that would have seen the same success, we do know the urban legends about little Mikey's fate just aren't true. According to Marketing Lens, though, they've always dabbled in other products like pet food and even clothing. Other acquisitions that went sour include: * December 1996: AT&T; Corp. spins off its NCR unit, valued at $3.4 billion, considerably less than the $7.48 billion AT&T; paid for the computer company in 1991. The executives viewed them as experiments that were practically cost free. - Acquisition of Snapple by Quaker Oats, 1994. Instead of lifting profits, Snapple dragged down Quaker's returns, leading Quaker to agree to sell the unit to the Triarc Companies this week for $300 million. They gave us a chance.. Sounds great, right? By the time the sale took place, Snapple had revenues of approximately $500 million, down from $700 million at the time that the acquisition took place. Column: 15 minutes of fame flies by. Below, we look at some the worst mergers and acquisitions undertaken by large corporations, and how the good times went bad. The idea took shape in Weinsteins office. Ferdinand Schumacher was one of those founders, and he immigrated to the United States from Germany in 1851. Most of those have a ton of added sugar, and even ones that sound like they should be healthy can come with some not-so-great ingredients. The Quaker Oats trademark was registered in 1877 by Henry Parsons Crowell (1855-1944), an Ohio milling company owner who in 1891 joined with two other millers . systems management. From their 1994 peak, sales declined every year, plunging to $ 440 million in 1997. Larry the Quaker Oats Man was first developed in 1877, and according to Business Insider 's walk down memory lane, he's had a surprising number of looks over the years. Despite Snapples flat sales and its inability to spread much beyond its core base of fans along the West and East coasts, Triarc says it is confident that Snapple can regain its past form. Back in his native country and most of Europe everyone was familiar with the idea of eating oats and porridge. But the swiftness with which Quakers Snapple investment eroded will make this deal a special case study of mismanagement for a generation of business students. In 2001, America Online acquired Time Warner in a megamerger for $165 billion; the largest business combination up until that time. If wed had a very structured process, forms to fill out, analyses to do, wed have seen the risks, and wed never have moved. Richard, 'At Quaker Oats, Snapple Is Leaving a Bad Aftertaste,' Wall Street Journal, August 7, 1995, p. Every move appeared logical, yet each phase of Quakers strategy ran into problems. In 1994, when Quaker bought the company that created the market for flavored iced teas at the peak of its popularity, Snapple's sales were $670 million. "Form 10-K for the Fiscal Year Ended December 31, 2008.". Quaker Oats loved the commercial they almost didn't get to see, and the incredibly simple idea resonated. . Analysts said that Quaker had paid too much for Snapple in the first place and that the purchase was plagued by bad timing. Quaker Oats Co. agreed to sell its Snapple juice and iced-tea business for a fraction of what it paid less than three years ago, swallowing a $1.4 billion pretax charge. A week prior to the results going public, a California judge ruled in favor of a man who claimed repeated exposure to Roundup caused his terminal cancer. Operating from the back of his parents pickle store in Queens, Arnie Greenberg and his friends Leonard Marsh and Hyman Golden started selling a fresh apple juice called Snapple across New York City in the late 1970s. The labels on its bottles were cluttered and amateurish, and its ads seemed, if possible, even more homemade. Snapple, based in East Meadow, N.Y., is a leader in the U.S. ready-to-drink iced tea and fruit-juice drink markets. "Form 10-Q for the Quarterly Period Ended September 30, 2005. According to Tim Clark who inspired his father to write the "Three Brothers" commercial the idea of a "slice-of-life commercial was nothing short of career suicide at the time (via Forbes). The once-invincible Sony Corporation has not done much better with its investment in two movie studios: Columbia Pictures and Tristar Pictures. The game featured a house with a yard and three rooms, and a total of 20 different places you could pick to hide. Short-distance transportation also involved more personnel hours (thus incurring higher labor costs), and strict government regulation restricted railroad companies' ability to adjust rates charged to shippers and passengers, making post-merger cost-cutting seemingly the only way to impact the bottom line positively. In a definitive agreement . In 2008, it wrote off an astonishing $30 billion in one-time charges due to impairment to goodwill, and its stock was given a junk status rating. Quaker struggled to exploit the merger of Gatorade, which is mostly sold in supermarkets, and Snapple, which typically sold one bottle at a time in convenience stores. Quaker Oats offered $14 in cash for each share of Snapple stock; the merger agreement contemplated the same payment per share. But what you might not know is that every single time you make a bowl of their tasty oatmeal, you're taking part in a long and storied history that well, there are times it gets downright bizarre. Its the most fun part of the business. Brands thrive when theres a close fit between process and corporate temperament. The confidence was easily understood: Quaker had an impressive record in beverage marketing, having developed Gatorade into a powerhouse national brand by skillfully executing a plan drawn straight from the marketing textbooks. I was always as keen to get the new products to market as Mike and Ken were, says Peltz. Now that's a mouthful you can simply enjoy. Quaker Oats' management thought it could leverage its relationships with supermarkets and large retailers; however, about half of Snapple's sales came from smaller channels, such as convenience stores, gas stations, and related independent distributors. The Japanese company lost billions before it sold an 80 percent stake in MCA to the Seagram Company. At the time, Snapple was still run by the three founders of the company. In just 27 months, Quaker Oats sold Snapple to a holding company for a mere $300 million, or a loss of $1.6 million for each day that the company owned Snapple. It has also divested 2 assets. Quaker Oats Co. is floundering in a sea of iced tea and fruit juices that cost it a fortune. And Quaker couldnt force them to. After 27 months, Quaker Oats sold Snapple to Triarc for a mere $300 million, or a loss of $1.6 million for each day that the company owned Snapple. Were practically cost free Organic and made with 100 % whole grain Oats it sold an percent... 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