| Jr. Feature |

Dealmakers, Deal Breakers

Famous Business Rivalries

A little healthy competition can be a good thing. And in the business world, it’s expected and necessary. After all, competition is what drives progress and leads to innovation. But sometimes that struggle to be the best can turn into a true rivalry, especially when there are two top names in an industry. Some of those rivalries even become famous. And some rivalries can make terrific tales….

The Car Race

Ferrari VS. Lamborghini

There’s an old story about a guy named Ferruccio Lamborghini getting into a, uh, heated discussion, shall we say. The discussion involved another guy named Enzo Ferrari. So, according to the tale, which is reportedly true, Mr. Lamborghini was a manufacturer of tractors (that’s right, farm equipment) who happened to like sports cars.

He liked them a lot. In fact, he owned not just one, but two Ferraris. Ferraris are luxury sports cars — super-expensive, super-fast, and super status symbols. In fact, the brand created the most expensive car ever sold ($70.2 million). Ferraris are designed to push the limits of possibility both on the road and the racetrack. But Mr. Lamborghini was kinda dissatisfied with their performance, especially when the clutch broke on one car. So he headed on over to Maranello, Italy, (he lived in Italy, too) to speak with the head of the company — Enzo Ferrari — himself. (It was 1962, and he just knocked on Ferrari’s door.)

Ferrari wasn’t so interested in hearing Lamborghini’s comments and complaints. Lamborghini even offered him some ideas about how to make the clutch better so it wouldn’t break. But Mr. Ferrari didn’t like the constructive criticism. In fact, Mr. Ferrari famously responded, “Let me make cars. You stick to making tractors.”

Well, Mr. Lamborghini drove home, absolutely fuming. He was an engineer! A famous and respected one! And he was already renowned for his tractor design! And Mr. Ferrari had totally rejected and insulted him! Well, guess what happened next?

You got it.

He built his own sports car factory (completed just four months after the argument!) and had his Lamborghini 350 GT ready for a 1964 car show. The car was very well received (by the way, those original models are basically priceless today).

And the rest, as they say, is history. Lamborghini’s name remains immortalized with the cars. Lamborghinis, like Ferraris, are luxury sports cars known for their speed, style, performance, and cost. The brand is known for power, prestige, and innovation.

It’s tricky to say who’s in first place. Ferrari sells more cars than Lamborghini, but Lamborghini has been reporting profit increases, while Ferrari’s are dropping….
Takeaway 1:
It pays to listen to constructive criticism.
Takeaway 2:
If you’re all fired up about something, put that energy to use!


Did You Know?

»The Lamborghini Veneno is recorded as the fastest Lamborghini ever made. With a top speed of 221 mph, the Veneno could go from zero to sixty in 2.9 seconds.

»The LaFerrari model is the fastest Ferrari, clocking in at 218 mph.


Dueling Drinks Duo

Coke VS. Pepsi

You’ve probably heard about the Cold War in history class (that was between the former Soviet Union and the United States). But what about the Cola Wars?

Coca-Cola is undoubtedly the world’s most famous soft drink. But Pepsi, its main competitor, has long sought its share of the soft drink market. And both companies have done some pretty crazy stuff to take the number-one spot….

Back in the 1980s, Coke started feeling the pinch. Pepsi was grabbing a bigger portion of the drinks market than Coke felt comfortable with. How did that come about? Pepsi had run a series of taste-test “experiments” that portrayed blindfolded customers tasting Coke and Pepsi and repeatedly choosing Pepsi as the better beverage. Customers started buying a lot more Pepsi after that and, as you can well imagine, Coke was none too happy.

In response, Coke decided to do something crazy — and, ultimately, catastrophic. The brand tweaked its famous recipe (the one that’s kept under lock and key). “New Coke” was supposedly a sweeter, better, new-and-improved Coke. But the drink brand forgot that people like Coke because it’s classic — not new. Over 400,000 angry customers wrote letters of complaint. They wanted their old Coke back. Coke ended up issuing a formal apology. And Coca-Cola Classic was restored to store shelves everywhere. Meanwhile, Pepsi continued to skyrocket.

Pepsi also ran a campaign called “Drink Pepsi, Get Stuff,” in which consumers earned points for buying Pepsi products and then they could redeem those points for prizes (all of which were branded with the Pepsi logo, of course, so it worked like additional advertising). It was tough times and stiff competition.

But in the grand scheme of Coke versus Pepsi history, those episodes were something of a blip on the radar. Both brands have been around — and competing — since the 1800s. Over the years, the rivalries have gotten a bit friendly and funnier. The two companies have even done plenty of campaigns that involve poking fun at each other and directly acknowledging their rivalry.

So, who’s in first place today? Coke remains on top, with Diet Coke and Pepsi competing for second place. Coke’s secret to success, despite its marketing flub-ups? The company emphasizes brand over product, meaning that the name, recognition, and experience are what customers are going for, even more than the drink itself. Over its nearly 130-year-history, Coke has marketed itself as basically selling you happiness in a bottle. Marketing experts believe that’s what people are buying when they choose Coke over other colas.

The problem for both Coke and Pepsi is that Americans are drinking less of the fizzy stuff overall. In the past 20 years or so, soda production volume has gone down by 1.4 billion cases. In fact, the top-selling drink in convenience stores is Red Bull — not either of the fizzy competitors.

These days, people also go for flavored waters, iced teas, green drinks, and energy drinks. So, it seems that the company that manages to create the best-tasting healthier alternatives will be the ultimate winner. Until then, Coke’s still first. Which is your fave?

Sometimes it pays to be able to laugh at a tough situation and find the humor in it.


Did You Know?

»Coke’s classic glass bottles were designed to help the brand stand out from its competition. It worked, right?

»Pepsi was originally called Brad’s Drink. Good thing they changed that!


The Flight Fight

Boeing VS. Airbus

When we think of planes, we usually think of airlines, like Delta, American, Continental, and so on. But those companies aren’t the manufacturers of planes; they’re just the ones who fly them. Airbus and Boeing are two of the biggest plane makers and are considered leaders in the industry. Both specialize in lightweight, fuel-efficient, cost-effective aircraft. If you’ve been on a plane, you’ve probably been on one made by one of those companies. And both brands are likely to continue dominating the aviation industry for a long time to come. So, what’s the problem?

Airbus is European. Boeing is American. Airbus only came on the scene in 1970, while Boeing has been around since 1916. Both have bought out most of their other competitors, leaving the competition between them fierce. Airbus and Boeing have had some of the biggest fights in business, even getting governments involved and ultimately taking their case to the WTO, the World Trade Organization. (The WTO is an international organization that helps nations buy, sell, and trade with one another. There are over 150 countries in the WTO.)

In fact, both have accused the other of receiving unfair subsidies and grants from their governments and doing shady deals. The dispute between the two has dragged on since the 1980s and has cost the World Trade Organization more than any other case it’s dealt with. At one point, the competition got so bitter, Airbus even produced pictures of rival Boeing’s planes having long Pinocchio-style noses. Meanwhile, the United States started putting higher tariff rates on Airbus planes as a kind of punishment. Ouch.

It’s been difficult to figure out what exactly is going on, because each company keeps their information top secret — and they intend to keep doing so. But in 2011, a letter addressed to King Abdullah of Saudi Arabia was leaked — and it confirmed what people have been suspecting for a long, long time: Governments are pretty tied up in the companies’ sales. Hmm!

Although Boeing has generally been the true industry leader, producing and delivering more planes, Airbus has recently begun to edge them out. A major reason for that is the grounding of Boeing’s 737MAX fleet, after two high-profile crashes. In 2021, Airbus did more flights and made more money than Boeing. But the competition remains stiff.

Don’t pull schtick. Don’t keep secrets. And be nice!


Did You Know?

»Boeing’s super-famous 737 model has carried more than 16.8 billion passengers over its lifetime — more than double the population of the planet.

»The Airbus A380 is designed to fly for 140,000 hours total. That means it could fly around the world more than 2,000 times.


Packaging With a Punch


It’s natural that UPS and FedEx are rivals. After all, they’re both delivering packages in the same places. But theirs is a kind of under-the-radar rivalry that neither company speaks about much. Nevertheless, the competition is real.

FexEx and UPS operate differently, have different structures, and execute different strategies. In the United States, FedEx carries more packages by air than UPS. UPS, meanwhile, does a much bigger volume on the ground. UPS also has more international business — and that’s where the company is looking for the future, into increasing global activities. Combined, the two delivery companies move about 28 million packages a day. (Lots of people are getting stuff!)

One of the ways these two names are competing is by buying storefronts. UPS bought the Mail Boxes Etc. chain for $190 million and rolled out 4,500 rebranded stores as the UPS Store. FedEx bought the Kinko’s copy chain.

So, who’s in the lead? UPS (founded in 1907) has been around a lot longer than FedEx (formed in 1974), and it brings in more money each year. UPS is worth around $94 billion compared to FedEx’s worth of $51 billion. But that doesn’t mean UPS isn’t taking active steps to secure its future. The company spends an undisclosed amount of money on advertising each year, known for its tagline, “What can brown do for you?” (based on the widely recognized brown uniforms worn by employees). Meanwhile, FedEx trucks are known for their “the world on time” slogan. But FedEx, at least, is thankful for the competition. “We view it as an intense, but healthy rivalry,” FedEx’s spokesman said. “This culture thrives on competition and excels at adversity.”

Takeaway 1:
Appreciate how you can grow from healthy competition.
Takeaway 2:
What you may consider plain or uninteresting could ultimately be one of your greatest assets and win you recognition — just think of the brown UPS uniform.


Did You Know?

»UPS has a fleet of over 100,000 signature brown delivery trucks

»FedEx operates the world’s largest fleet of all-cargo airplanes, with over 700.


Fancy Footwork

Adidas VS. Puma

These days Adidas and Puma just seem like two kinds of sneakers, with some people maybe favoring one while others prefer the second. But these two brands were once at the center of one of the biggest business wars that ultimately tore apart a town.

Adi and Rudolf Dassler were two brothers who founded a footwear business together in Germany in the 1920s, working out of their mother’s laundry room to create sneakers. The business boomed, in large part thanks to the fact that the athletes wearing their shoes were capturing tons of medals at competitions. But during World War II, the two brothers had a falling out. Although their business — Gebrüder Dassler Schuhfabrik — had flourished until the war, the Dasslers disbanded it because of their disagreement… and reopened as two separate companies on opposite sides of the river that ran through Herzogenaurach, their hometown.

Even today, no one really knows what the fight was about or why it started. Some people think it had to do with the war and some think it was personal. But, whatever happened, Adolf went on to start Adidas, while Rudolf opened Puma. The rivalry grew quite fierce and even caused a rift in the town, as the locals took sides (and almost every family in Herzogenaurach had a relative who was employed by one of the companies). When the brothers passed away in the 1970s, they were buried at opposite ends of the cemetery. In the 1990s, the two companies were sold; they’re no longer family owned.

Nevertheless, the rivalry in their town continued, and the feeling even persists a bit today. “If someone comes in through the door, your gaze still wanders to their shoes,” said the town’s mayor, German Hacker. In fact, that’s the reason behind Herzogenaurach’s nickname: “the town of the lowered gaze” (because everyone looks down to check out each other’s shoes!). Incidentally, the mayor tries to wear both brands, for diplomatic reasons.

In 2009, the two companies held a friendly soccer game on UN World Peace Day to at least get rid of the old animosity. The mayor even wore two different shoes (one Puma, one Adidas) in his reconciliation efforts. And all the gear the players wore was printed with both logos. The game went a long way toward resolving things. Of course, there’s still competition… but no old hatred.

Adidas has more than quadruple the number of employees that Puma has. And in 2020, Adidas brought in 674 billion euros, while Puma netted only 229.7 million. But Usain Bolt, the fastest man in the world, wears Pumas. So, who’s the winner? Well, in that 2009 soccer game, it was Team Adidas.

Don’t let competition carry you so far that you lose sight of what’s truly important.
Takeaway 2:
Peace pays!


Did You Know?

»Adidas’s stripes, which are probably the shoe’s most easily recognizable feature, were originally placed on the sneakers for stability reasons, not design.

»Puma is the third-largest sportswear manufacturer in the world.


(Originally featured in Mishpacha Jr., Issue 911)

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