Wrigley Teaches Lesson in Making a Brand Stick
Here's something to chew on: You don't need a blockbuster product to build a dynamic, successful company.
Take the Wm. Wrigley Jr. Company (WWY). Chewing gum isn't exactly a high-profile category; innovation in the candy industry doesn't prompt the same gushing headlines as tech toys like the iPhone or Wii game system.
But Wrigley has been so successful within its niche that it drew attention from some major players. This week, global candy manufacturer Mars joined with investor Warren Buffett to buy Wrigley for $23 billion, creating the world's largest confectionary company.
The deal was impressive enough to goad two of the other big candy companies -- U.K.-based Cadbury Schweppes (CSG) and Hershey (HSY) -- into merger talks of their own, so don't be surprised if another major candy deal is announced soon.
Focus on Strengths; Go GlobalHow does a company based on lowly sticks of chewing gum grow into a multibillion-dollar powerhouse? Any small business can follow the Wrigley model. First, focus on your strengths, but keep the category constantly refreshed with new products that appeal to different segments of consumers. Second, go global. International sales can keep the bottom line healthy even when domestic sales slow down. Matt Arnold, an analyst at Edward Jones, points to Wrigley's history of innovation as a key to its success. "It's a core part of their strategy," he says. Gum used to be sold only in paper-wrapped sticks; when Wrigley introduced gum in candy-covered pellets, it was enormously successful. Other Wrigley developments included sugarless gum and longer-lasting flavors.
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