Borden Letting Brands Wither

STUDY SESSION 5

BORDEN- LETTING BRANDS WITHER

The real problem with Borden is that it had became a very large octopus with a structure so diversified it had lost focus under one brand. Also when Anthony D’Amato took the held at Borden, he had a vastly different managing style than Romeo Ventres, which led to employee dissatisfaction. Ventres trusted his managers and gave them enough flexibility to get results, D’Amato was the total opposite: blunt, profane and deeply involved in operations, this shift in management did not give the results needed. But there were signs well before that, which pointed to a dubious future. By the late 1980’s, when the company was expanding (acquiring companies to expand its portfolio) and enjoying increased profits it ignored some of its most successful products and missed out on key opportunities. When the 1990’s came, the same acquisitions that helped Borden grow where now in a standstill and competitors caught up with them. In short, the company was already in a decline before D’Amato took over. Facing uncertainty and steadily declining sales, D’Amato wanted to shift focus to national brands, breaking away from the existing strategy. Clinging to the belief that they could charge more than the competition, national prices dropped while theirs didn’t, this action itself hurt the bottom line profits the company was making, a deep sacrifice for only a small fraction of improvement on market share. Further worsening the situation were: a failed marketing campaign, failed attempts at introducing new products to the market and continued decrease in consumer interest.

The main issue arose when the company decided to switch its focus and began acquiring different companies. While companies need to look for ways to expand and increase their influence in the market, they also need to pay as much attention to their existing products; relying on brand recognition alone opens the door for other companies to take...