The article I chose to write about is Papa John's annual sales fall for the first time since 2009. Papa Johns has always been major player in not only the pizza market but also in advertising. Notably one of their biggest advertising platforms was involved in a deal with the Nation Football League. Unfortunately for Papa Johns they lost this deal with the NFL due to an "all out fight with founder John Schnatter"(Armental). After the loss of this deal with the NFL and the turmoil that ensued with the fight with Schnatter Papa Johns' sales fell 12%.
Papa Johns is now taking steps in order to correct the wrongs done by Schnatter and the impacts of losing their deal with the NFL and public retaliation over Schnatter's comments. Schnatter no longer appears on any of the Papa Johns commercials and the company has been making changes to its board as well. The "Starboard Value LP this month disclosed a $200 million investment that included Starboard CEO Jeffery Smith becoming board chairman and Anthony Sanfilippo, former chairman and CEO of casino operator Pinnacle Entertainment Inc., also joining Papa Johns board". A statement focused on what Papa Johns believes needs to be done was released by Chief Executive Steve Ritchie stating, "We know we must improve how we communicate with and connect with our customers," "it's not just about spending more on advertisements and promotion"(Mr. Ritchie).
What struck me so much was how much a company was affected by the incidents of one prominent member of the company. With one incident from the face the company, it lost one of, if not its most, promising advertising deals and enraged the public causing the company to take quite a financial spill. This really goes to show how much "people" and the "environment" really do affect a company and its standing. Papa Johns not only has to fix issues outside of the company but also within itself as well.
Works/Picture Cited: Armental, Maria "Papa John's Annual Sales Fall for First Time Since 2009". Business, The Wall Street Journal, Web, 27 February 2019. https://www.wsj.com/articles/papa-johns-annual-sales-fall-for-first-time-since-2009-11551220166?mod=searchresults&page=1&pos=4
I remember hearing about Schnatter leaving Papa John’s. It definitely is gonna be tough for the brand since he was literally “Papa John”. Really goes to show how much pressure the face of a brand faces.
ReplyDeleteIt's crazy I just read that Papa John's founder agreed to leave board!
ReplyDeleteI never knew John Schnatter left his own company, this is a prime example of why our school tries to embed good business ethics into us early on.
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