Martha Stewart Case
1. Martha Stewart is best known for embodying the American dream. She devoted most of her life to improving the quality of the home, emphasizing modesty and decorum over extravagance and luxury. She defied expectations as she went on to start her own catering business and expanded it into a media empire trading on the New York Stock Exchange. She was not only the founder of the company, she was its public face and chief spokeswoman. Martha Stewart and MSO are inextricably linked. Martha Stewart suffered great personal losses from this scandal. On October 3, 2002 she resigned from a prestigious board position with the New York Stock Exchange. On March 15th, after her conviction, she resigned her position as a director and the chief creative officer of MSO. 2. MSO’s stock price declined due to Martha Stewart’s loss of reputation in part because Martha Stewart’s name is directly linked to all MSO brands. Because the investigation, indictment and trial spanned close to three years, the impact on MSO was severe. Early on Stewart chose to remain silent about her involvement. By the time she issued her first formal statement, professing her innocence, MSO stock price was close to half of what it had been at the end of 2001. For the next 2 years, MSO was unable to improve its stock price by more than a few percentage points. People no longer trusted the Martha Stewart name like they used to. 3. Martha Stewarts target market is going to be women 18-44, interested in home décor, fashion and crafts. 4.The qualities associated with the Martha Stewart brand is quality, affordability, and name recognition. The quality would be affected by the accusations of insider trading because it makes you think that maybe there were shortcuts made in making the product. Since Martha’s reputation is way down people are not going to trust her brand as much now. So the name recognition is also going to be affected. The only way to find out for sure would be to have a...
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