Quaker Oats

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Quaker Oats Morrison reviving Quaker after the Snapple debacle– cost $1.4 B write-off ●Focus on Gatorade. Gatorade -cash cow – potentially could dry up ●Pre-Morrison, Quaker mainly riding Gatorade under-investing in food brands ●Morrison comes in and changes PA: Younger manager presidents – oversee individual product lines such as hot cereal, cold cereal, snacks, and domestically sold Gatorade-cost-cutting - reinvested right into their own brands ●SK ●Same representative-move multiple brands of the company ●Relationship with distributions = oats sales rep stock the shelves = specific knowledge. Incentives are tied to reviving the snacks division = PA ●Came up with new products in older food lines ●Redefining the market-he did not see the 80% market share as the problem – used as an opportunity (redefine the market) ●“Active thirst”-Gatorade has only 7% of that market and it’s up against soft drinks, juice and bottled water ●Strategy to make Gatorade as available as water ●“Fitness water”- aimed at women who shun Gatorade ●Why Quaker failed with Snapple- 1) it is good in making small innovations, distributions, 2) not so sufficient in making changes in every 6 months, required for Snapple (fashion beverage). Butter Fliers-Don’t Laugh Economist Companies are obsessed with obtaining a blockbuster innovation but new products are harder and harder to come by. (Slywotzky) Innovation – making changes to something established Invention – the act of coming upon or finding: essentially discovery. Innovators try to change the status quo. Chakravorty says that is exact reason why markets resist innovations, since they disrupt the way companies do things. Christensen – disruptive innovation - simpler, cheaper and more convenient products that seriously upset the status quo – can herald the rapid downfall of well – established and successful businesses. Brynjolfsson says that there are other areas in which innovation can take place. Executives need to rethink the way they...
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