Problems for P&G
The Situation
The $85-billion, Cincinnati-based giant remains the worldwide leader of the consumer-packaged goods business, touting 25 brands, with more than $1 billion a year in sales each. It’s also increasingly gaining sales and share outside the U.S. A.G. Lafley just decided to jettison dozens of underperforming brands. But he faces tough competitors in his second go-round as P&G’s CEO, which began in mid-2013 when he succeeded his hand-picked initial successor, Bob McDonald. The man once known as a corporate innovator nonpareil also has seen his company lose the edge in innovation.
The Solutions
Greg Bustin: Lafley can’t be a caretaker. He’s got to make bold moves and demonstrate a sense of urgency. And removing ambiguity around the new succession plan has to become a priority.
Gould: Maybe McDonald lost track of it a little bit, but one thing P&G did a great job of historically was managing their core business while also investing in growth ideas and using their balance sheet to help them invest in new business models. They have to get back to the core of doing that.
Zeleny: Lafley’s decision to take out $10 billion in costs was smart, but he should move briskly. He also should consider bringing in some new blood from other companies [who] have different perspectives on speed and growth. And the [CEO] problem last year should be a warning to be realistic as they look at succession throughout the organization.
RadioShack: Mired in the Past
The Situation
The Fort Worth-based retailer has been on life support for a while, unable to create a coherent position after one trend upon another eroded its traditional identity as the go-to depot for all things electronic. RadioShack overshot its possibilities as an all-purpose store for wireless, for example. It posted a $400-million loss for 2013 on $3.4 billion in revenues. And when the company tried to close 1,100 stores, lenders balked. Lately CEO Joseph Magnacca has staked out a plan to crowdsource new products. But the brand’s humorous Super Bowl commercial in February hailed the ’80s—unfortunately, the high point of RadioShack’s relevance.
The Solutions
Brownstein: I’d sell the assets to Je Bezos. RadioShack doesn’t have a reason for existing anymore. The value they brought to the marketplace has long since passed.
Leider: They’ve got to go back to their roots as the leader in expert customer service. An advice orientation also could help them succeed online, where that is important. One thing in their favor right now is that “reverse showrooming,” seems to be increasing, where more people now are looking online but buying at retail. It could give them a shot at a turnaround.
David Silverstein: What is their old customer building today? They’re into home automation and home power generation. Battery technology is moving at lightning speed, and people are wanting to become more independent from the power grid. That’s their only remaining chance. Otherwise, I’d be looking to sell RadioShack to Home Depot or Lowe’s, which easily could have a RadioShack section in their stores.