Thursday, July 28, 2005


The Rubbermaid lesson

Back in 2003, Fortune magazine published an historical look across nearly two decades of the publication's famous "Most Admired Companies" lists. Since 1983, the survey has tackled a difficult task -- ranking the 10 companies that have those qualities that other companies would practically kill to possess.

We here at Inside Market Research took a few moments to count up those few companies that appeared on the list at least seven times -- the very cream of the cream of the crop. Those companies and their number of appearances in 20 years are listed here for you:

Merck.............15
Coca-Cola.........13
Rubbermaid........11
3M................10
Procter & Gamble..10
Wal-Mart...........9
Johnson & Johnson..8
Microsoft..........8
Boeing.............7
General Electric...7
Intel..............7


Seeing the #3 company on this list -- Rubbermaid -- reminded me of an excellent speech that Dr. Anil Menon (then Associate Professor of Marketing at Emory University, and now IBM's VP of Marketing Strategy & Management) gave at the American Marketing Association's meeting in Atlanta in September 2001.

Menon had an uncanny way of boiling down corporate stories into memorable anecdotes. He asked us all, "What happened to Rubbermaid?" This company that was so respected through the mid-1990's eventually lost much of its traction in 1999 and 2000. (And since 2000, the stock has traded in a range that leaves it no better than 5 years ago.) Menon summarized the reason: Wal-Mart and similar stores came to Rubbermaid, pushing the company to update its inventory delivery and tracking system, so that sales could be managed more efficiently in the retailers' modern systems. Rubbermaid's response was basically, "We're Rubbermaid; don't tell us how to run our business." The retailers duly began to find other providers of similar housewares, to the substantial loss of Rubbermaid -- perhaps $4 billion in market capitalization.

1 Comments:

At 9:30 AM, July 30, 2005, Anonymous Aloma210 said...

As your most responsive reader, I
cannot pass on adding my two cents
in favor of Rubbermaid. Yes, the
stock price has remained flat for
the past five years, but the nearly
4% dividend has always been paid.
Companies cow-towing to Walmart, and the like, must consider where
they might be should they be
kicked out of bed.

 

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