Martha Stewart -"The Goddess of Domesticity"
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Case Details:
Case Code : BECG020
Case Length : 13 Pages
Period : 1997 - 2001
Pub. Date : 2002
Teaching Note : Available
Organization : Martha Stewart, Imclone Systems Inc, Omnimedia Inc.
Industry : Publishing, Merchandizing, Television
Countries : USA
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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"I don't do anything unless I think its going to be good. I'm real picky about that. I have a set standard and I'm going to stick to the standard. I may have been able to grow faster or maybe my business could have been bigger, but because I really feel very serious about my subject, I really want to be hands on."
- Martha Stewart, CEO of Martha Stewart Omnimedia Inc.
"When you are a brand, any news that you are dirty is something the market will want to believe. She (Martha Stewart) has a lot of brand equity. If they start digging up a lot of negative information that can evaporate quickly."
- Eric Denzenhall, Crisis public relations specialist.
A Fallen Idol
On December 27, 2001, Martha Stewart sold 3928 shares worth $228,000 of Imclone Systems Inc, a biotech company, a day before its share prices fell.1
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The News of this sale came to light in June 2002. Martha Stewart, who was a close friend of Sam Waksal, the CEO of Imclone, was suspected to have dumped her shares on the basis of inside information about the imminent fall in prices. Almost two years after the incident, no charges had been formally pressed against her, but it was very clear to industry observers that the scandal had a negative impact on her businesses. Martha Stewart's life represented the fulfillment of the American dream. A child of middle class immigrants, she built her lifestyle and media empire single-handedly. Such was her success that she came to be called America's 'Goddess of Domesticity.' She was the embodiment of perfection and the idol of many a woman in the U.S.
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She taught women the art of good housekeeping and encouraged them to take pride in keeping their homes well.
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She sold dreams of a "perfect life" under a brand named after her. All her businesses were centered around her and she was the main brand of the company. Everything Martha Stewart Omnimedia Inc. did was associated with Martha Stewart, the person.
Therefore, when she committed a mistake in her personal life, the company bore the brunt of it. Martha Stewart's story is a good example of the dangers a company faces when it hinges too much on a personality. When a person and a company become inseparable, it cannot be good for either. In this case when the image of Martha Stewart, the person, was tarnished, the brand also suffered. |
Martha Stewart -"The Goddess of Domesticity"
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