Blog 3: Failing Big (aka hindsight is 20/20)

It is not surprising that half of businesses fail because they made mistakes that could have been avoided. However, for Carroll and Mui to claim that most failures are due to flawed strategies and not inept execution is worth looking into. Businesses can fail due to poor execution. A few examples to illustrate:

• Synergy Mirage, example Quaker Oats and Snapple. The strategy was Quaker Oats wanted to use Snapple's distribution system to gain access to new distributors. This strategy has been successfully deployed by Keurig Dr Pepper (which purchased Snapple). Keurig and Dr Pepper Group had different distribution methods: both are available in grocery stores but Dr Pepper products can be found in vending machines, restaurants, ballparks, etc. These brands have different distribution methods, and their merger was to generate a $200M/yr sales increase through synergies. Quaker and Keurig had the same goal but Quaker failed and Keurig succeeded. Quaker's overpaying for Snapper is not a failure in strategy. It was a failure in execution. 
• Pseudo-Adjacencies, example Oglebay and Avon. Oglebay saw an opportunity to grow through selling a complementary product. Avon flopped because it entered into the healthcare market. Carroll and Mui claim that these companies failures were due to losing sight of their core business, which is poor execution (not a flaw in strategy). As the authors point out, GE has been successful at entering adjacent businesses. 

Source: 

https://www.foodbev.com/news/keurig-dr-pepper-q3-results-benefit-from-merger-synergy/