Too many customer complaints -
Customer is the key to succeed for every business. Nowadays, the market is tailor to fulfill the customer needs and to maintain a long lasting relationship with them. If a company can keep customer satisfied with their products or service, this would lead to increase revenues and eventually more profits for the company. On the other hand, if the company does not provide any quality service or products. It will lead to customer complains and this stage is unavoidable. Companies should perceive customers complain as a warning sign to problems. A quick and efficient responds are need to solve this issue. Most of time if company did not handle excessive complains by the customer would lead to a deteriorating company/brand image. For instance, Sprint wireless service lost large amount of customers and permanently damaged the brand image; for not providing quality customer service. Before the merger of Sprint and Nextel, both individual companies were top ranking in fulfilling customer needs. After the merger, the new business changed the focus, customer services were no long their priority target. As result, they announced to cut 4000 jobs and close out 125 retail stores early this year.
A deteriorating company/brand image –
A brand image plays an important factor in determine a company’s success. Have a good brand image will allow the business to run smoothly in the market. Clients and investors will automatically attach higher values to the companies with positive brand image. The process of building a strong brand image can takes few years but it would only takes few seconds to deteriorate. For example, Bear Stern Company used to be the fifth largest financial corporation in the
7 comments:
I think your entry was sound and consistent. It establishes a couple of symptoms that can be traced to fundamental strategic problems. It highlights firms with these symptoms and makes an attempt to identify strategic problems that may underlie the symptoms.
The way I see the case with Bear Sterns is less as a symptom of strategic problem and more as a risk lover company. If the sub Prime bubble wouldn’t blow Bear Sterns could have been in the top of the rock, but their decision to take the risk and put all the eggs in one basket brought them to this down fall. I do agree that the damage of the sub prime caused them brand image damage, and we can learn from that how cruel this market is. I think that this case is kind of unique due to the fact that their brand image cracked in a short period of time.
I agree with you assessment on brand image and customers complaint. I believe these are the two most important factors in a healthy company. A good customer’s relationship is crucial to the existence of a company, keeping customers happy should be the company primary goal. Happy customers will lead to a good brand image. On the other hand too much complaint will lead to a deteriorating corporate image, so both symptoms goes hand in hand. I believe Bear Stern strategic problem was taking on too much risk. They got to greedy and eventual pay for it during a downturn economy.
I think, companies have to think twice before making decisions about merging,Sprint and Nextel,in your example have to deal with customers complains , are not the first one who have problems in this area. But, I don't think that Bear Sterns is to be blamed for subprime crisis.
I believe the case with Bear Stearn is more related to not having enough variety compared to competition. They placed too much faith in the risky assets rather than a more diversified portfolio of financial assets. I believe this is why Bear Stearn went down so quick once that group of assets was hit by the crisis.
I understand what you are trying to say with Bear Sterns - that had a loyal band name but because of poor financing, the name is no longer prominent. I think a better example would have been Enron. They were a natural gas pipeline company, but because of unjust goals, the company fell.
I agree with you that investors lost confidence in Bear Sterns during the subprime crises. There was a time I believe a few hours when no one wanted to trade with Bear because of the uncertainty around its situation. Basically, all trading activity was frozen and Bears stock was loosing its value by the minute. This continued until JP Morgan stepped in and guarantied the trades.
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