The best sneaky company trick

tax-avoidance

I like George Osborne’s tactic of whistling at the tax dodgers, I’ve heard it’s effective…

Companies are sneaky nowadays. Gone are the times when we could blissfully let them go about their business without us having to worry if it was legitimate, how it would affect us and if there was something seriously fishy going on.

A news cycle rarely goes past without some mention of a tax dodging corporation, big bonuses handed out to the big cheeses despite big lay-offs elsewhere in the business, fraud, or phone hacking to find out what I would like for tea.

We can’t trust anyone any more. My decision to eat fajitas is no longer sacred.

This can be pretty terrifying when you realise the scope of some of these companies, primarily Google.

One fun and awful thought experiment is to imagine that Google suddenly turned completely evil. It may have collected vast amounts of data about you: all your saved passwords on Chrome, all your emails on Gmail, your search history on Google itself. What happens if they turned it on you?

google-evil

Classic joke with a classic Google view. It’s even retro to view Google as evil

What if they decided they didn’t like you and wanted to besmirch your good name. For instance, they could send an email to your boss from your Gmail account saying “you are silly and I am sooooo much more intelligent than you – idiot face!”

That could cause irrepairable damage to your boss-employee relationship.

Luckily, they don’t do that…

Yet…

Anyway, the area I wanted to talk about is much less sinister but still pretty sneaky. It’s about companies owning other companies.

I knew about some big corporations owning multiple companies in a variety of domains e.g. Proctor and Gamble who basically make everything from your dog’s food to your laundry detergent, but I came across an interesting example recently.

A couple of days ago I was working on a project which mentioned the company Seattle’s Best Coffee. I’d never heard of the brand so I decided to have a little peak into its history on their website.

seattles best coffee

It was the usual story: a couple of brothers open up a cafe. They both care a lot about coffee and the way beans are roasted. They create a brand. Popularity of fancy coffee grows and they expand, blah blah blah. Basically, it was the usual ‘heritage’ story to make it seem more authentic.

Interestingly, their name was originally Wet Whisker but they changed it after they won a competition in Seattle in 1991, to a much more understated and modest title…

But their name did get me thinking: I’m sure another coffee company is from Seattle – isn’t that where Starbucks is from?! A quick Google (safe…for now…) search showed me that I was correct and Starbucks was making a name for itself in Seattle at around the same time.

I’m not sure if Starbucks entered the 1991 competition but it does seem to suggest that business acumen can overcome a better product – you would be hard pressed to find anyone in the UK who has never heard of a Starbucks but mentioning SBC would produce a number of perplexed faces.

Unsurprisingly, Starbucks decided to keep their name rather than changing it to “Not quite Seattle’s best coffee” after the ’91 competition, and they expanded and grew and grew. They started to buy up other companies (you can probably see where I’m going with this by now) and in 2003 they bought Seattle’s Best Coffee.

Now, to me, if I really hated Starbucks I would want to spite them in every way possible. So I would look to buy from their competitors, maybe Costa, maybe Cafe Nero, maybe the coffee brand which claims to have one up on Starbucks in the coffee market, Seattle’s Best Coffee.

But now I can’t! All my money would go to Starbucks! Rats!

And this is the best sneaky trick companies can pull on you – create a competitor version for you to buy because you don’t like the original brand. Sure, the brands are slightly different but when it comes down to it, are they? Really?!

You can even engender brand loyalty. I’m sure some would fight fiercely for SBC and spit in the face of the massive faceless corporation that is Starbucks. Which makes their trick all the better.

Earlier I mentioned P&G – they own the brands Ariel, Fairy, Lenor and Daz – all competitors in the laundry market. If you buy one regularly and then think “hey I’ll go for a change, I’ll buy from another laundry company” you’ll probably be placing money back into P&G’s coffers.

Supermarkets do it as well. In Tesco you can buy from the New York Soup Co. which is owned, created and developed by Tesco, a British brand which has little to do with New York.

I just wanted to make you all aware of this so you don’t feel high and mighty purchasing  SBC instead of Starbucks.

It’s all a bit dodge but I’m a fan. It’s sneaky but it’s legal. It creates monopolies but it gives us more choice. It’s clever.

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