2017 has arguably been a rough year for a lot of us, especially with a bumbling orange ignoramus siting in the seat of the leader of the free world. Outside of politics, a few businesses also caught my attention as really having a rough time of it this year, facing turmoil in legal and PR realms. Mistake-prone CEOs, PR blunders and strategical errors amount to a reputation with blemishes, which ultimately impacts a company’s bottom line and future outlook.
It’s especially interesting that these companies have a previously successful track record. Is the world undergoing some sort of cosmic shift or ending all together??
Probably not. More likely, this rough year illustrates how any company, regardless of their innovation or grasp of the market, can begin a downspin with PR nightmares or management issues.
Pepsi’s 2017 commercial, featuring Kendall Jenner cracking open a Pepsi and embracing an unnamed cause with other protesters, drew deserved backlash from practically everywhere. The commercial’s climax, featuring Jenner handing a Pepsi to an officer and the resulting scene of the protesting crowd cheering, belittles activists and many sensitive political issues, including police brutality.
With Pepsi quickly yanking the ad, the message was delivered loud and clear — getting overly political and demeaning protests, in general, is not a good marketing route. Especially considering that Pepsi has such a large and young demographic, the tasteless commercial did a lot more harm than good. The damage was especially bad since the ad was created by Pepsi’s in-house advertising team, instead of a third-party. For Pepsi, there was no one else to blame for being out of touch than themselves.
Sunny Co. Clothing
Instagram is a great platform for companies to tap into a lucrative, young market. Many businesses consider Instagram a great source of leads, though for California-based apparel company Sunny Co. Clothing, it has resulted in a potential legal fight.
Sunny Co.’s messy 2017 began in May, upon posting a promotion on Instagram depicting a model wearing their “Pamela” red full-piece bathing suit. The post offers that anyone who re-posts within 24 hours would receive the bathing suit for merely the cost of shipping and handling.
Anyone re-posting was supposed to receive a code for free check-out on Sunny Co.’s website. Unfortunately for those who spent time re-posting, Sunny Co. uploaded a subsequent post after several hours, attempting to revise the conditions. The big point of frustration was the message that they “reserve the right to cap the promotion if deemed necessary.
Of course, the company’s swimsuit products became “sold out,” with the website saying they are prioritizing outstanding orders ahead of the promotion. To make matters worse, some winners claim they were charged the full swimsuit price, on top of shipping and handling.
Sunny Co. lost a fair share of fans due to the seemingly manipulative promotion. Although legal action has yet to initiate, it would not be surprising if some consumers choose to take that path.
Once at the top of the chain for ride-sharing, Uber now has viable competition from Lyft, thanks to a great year from Lyft and a truly awful one for Uber. It’s always a bad sign when a company’s founder departs, even temporarily. Uber’s founder and CEO Travis Kalanick took an extended leave of absence after a series of sexual harassment and discrimination complaints were targeted toward the company.
Uber showcased a company in turmoil when they fired 20 employees in June due to an investigation by a law firm looking into these complaints. Despite being accused of numerous Title VII violations, Uber’s company value still remains at an impressive $70 billion, though their mess of a corporate structure has left investors and consumers wondering about its sustainability.
Uber’s “founder-first” structure ideally allows a visionary to lead the company, though Kalanick’s role causes more headache than not. A substantial #deleteuber Twitter campaign in January was partly in response to Kalanick’s seat on President Trump’s economic council. Even after his resignation from the council, multiple accusations were levied and lead to his leave of his absence. Frankly, many consumers could care less about a founder’s initial role if his present one is overflowing with controversy.
To compound Uber’s struggles, their primary competitor, Lyft, takes big leaps forward, particularly regarding autonomous cars. Lyft’s recent partnership with Jaguar Land Rover for $25 million in a joint effort to work on autonomous car testing shows a clear effort to become the leaders in an age of no individual car ownership. Lyft’s brand recognition increases due to these efforts, as well as their primary competitor’s open struggles.
With Uber’s continuing struggles and Lyft’s growing brand recognition, Lyft’s grasp of the autonomous car market can soon become very real.
Controversies and airlines are certainly no strangers. Still, 2017 was an especially bad year for United Airlines. In April, a passenger and medical doctor by the name of David Dao was told to give up his seat, after no passengers volunteered. Even after clarification from Dao that he needed to be on the plane to arrive in Louisville for patients, security officers dragged him by his arms, inflicting broken teeth, a concussion, broken nose and other injuries. The video was captured on smartphones, resulting in extremely high-profile backlash.
With Dao receiving an undisclosed settlement, United Airlines essentially admits their wrongdoing, though that did not stop United Airlines stocks from plummeting four percent over the week. The event compounds other controversies, such as this August, when a family’s five-year-old dog died in a plane’s cargo that was stuck on the tarmac for two hours due to weather.
Additionally, Hurricane Harvey anticipates costing United Airlines over $265 million. Suffice to say, 2017 has been a truly terrible year for United Airlines, though much of it was self-inflicted.
Although most of these businesses still have significant value, their 2017s to date encompass a variety of disasters. It will be interesting to see how 2018 pans out for them and other businesses, especially considering all the controversial topics swirling around in the media lately.