It was the best of times for Best Buy and the worst of times for Toys “R” Us in the news this week. Years ago, analysts expected Best Buy to go the way of Borders, a bookseller disrupted by Amazon’s online magic. Instead, Best Buy has held up well against Amazon. It not only avoided the fate of electronics chains that did go bankrupt (e.g., Radio Shack and Circuit City) it’s a stock we all should have purchased. Toys “R” Us, on the other hand, announced its bankruptcy this week. Economists love natural experiments, and the Best Buy versus Toys “R” Us comparison offers one for retail markets. Why did Best Buy succeed where Toys “R” Us failed? What lessons can we glean? The key takeaway: You cannot beat Amazon at its own retail game. You must win at a different game. Toys…
Facing brand reputation damage, what’s next?
A journalist recently smeared an organization I admire. Give a reporter a storyline, unearth some anecdotes, then generate supportive charts, and you have a front-page story. The article’s implied conclusions fit the liberal thirst for examples of regulatory capture, which are situations in which self-regulation by an industry creates supposedly lax regulation. Yes, the selected stories were true, as was a damaging chart. But the graphic required selecting definitions that favored the storyline. And the mistakes in the story would not necessarily be apparent to lay readers. Experts advise you be prepared for reputational damage before it occurs. Best practice is to understand where damage might come from and take steps to improve your brand to minimize risks and strengthen relationships to reduce damage. There is a reason why smart leaders hold proactive, off-record informational sessions with major influencers and invest in corporate…