A Tale of Two Hot Sauces: Spicing Up Diversification
The contrasting paths of two hot sauce manufacturers show that managing exposure on multiple fronts is essential.
It was the best of times, it was the worst of times. The divergent fates of two rival condiment businesses — the best of times for McIlhenny Company, maker of well-known Tabasco-brand hot sauces, and the worst of times for Huy Fong Foods, originator of the U.S. version of the popular Sriracha pepper sauce — highlight the power and perils of diversification. While McIlhenny took strategic steps to diversify with future performance and risk in mind, Huy Fong failed to capitalize on its wild initial success, making missteps that ...
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