Joseph E. Seagram Sons, Inc., a major alcohol distilling company of its time encountered new business challenges in the 1990s; increased government regulation and taxation on liquor, the 90’s recession, decline in sales, criticism of spirits marketing, and an eroding core market as the business plateaued. The President and CEO of Seagram Company, Edgar Bronfman Jr., recognized the crisis at hand and embarked upon a new vision to reposition and redefine the company’s competitive advantage based on changing its core values. Bronfman took crucial actions to differentiate company’s products and activities by taking ownership in other various industries such as an oil company, Martell USA (cognac), Tropicana (fruit juice beverages), DuPont
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With each closing day, participants give recommendations only to see that there are no clear plans in place and lack of follow-up to their concerns. There are no connections in terms of management or leadership in this company to its implementation processes. The plan was complicated and unclear which is why it led to concerns and “recommendations” from company employees. Plainly, the executives were not asking the right questions or being proactive as these voices caught them by surprise and they were lost for words—proof it was not a well thought out plan.
Diversification should be within the capabilities of an organization; it should reside in its resources (Christensen & Overdorf, 2000), brands, and appropriate industry in which it reflects experience and knowledge. Seagram’s new vision is fitting as it is known as a beverage company, therefore should aim to be the best. So why is it that it acquired multiple alternate companies, some completely outside its industry? Random and inappropriate ownership of a non-related industry (oil-DuPont, chemical and MCA-entertainment) once—consider it a freebie, maybe even twice, but the third; MCA/Universal, an entertainment company that nowhere relates to the beverage industry does more damage than good. The resources it takes to learn the new businesses and encompass change values within Seagram plus installing those final values and culture to all newly acquired businesses is beyond cumbersome. If that is