7 companies who transformed themselves … Hasbro from education to entertainment, Samsung from dried fish to electronics
May 9, 2018
Most people have heard of the iconic Lucky Strike cigarettes, which were made by The American Tobacco Company (ATC), founded in 1890. But by 1969, ATC decided to diversify from controversial tobacco products. It rebranded itself as American Brands, under the holding company Fortune Brands, and sold off its tobacco business. The resulting conglomerate had a number of smaller divisions that included insurance, office supplies, golf clubs and even Jim Beam whiskey. After numerous sell-offs and splits, Fortune Brands has added “Home & Security” to its name and makes home fixtures and hardware. It’s a far cry from its original conception.
In the 1920s, brothers Hillel, Herman, and Henry Hassenfeld founded Hassenfeld Brothers and sold textile remnants. Over the next 20 years the company expanded into school supplies and pencil cases as well as pencils. By the 1940s they sold “educational” toys, including doctor and nurse kits and clay modelling sets. In 1952 they bought the rights to Mr Potato Head, and had their first toy hit. Then in 1964, Hassenfeld Brothers produced the GI Joe “action figure” for boys who didn’t want to play with dolls, a move which would underpin its success. In 1968 the company changed its name to Hasbro Industries. The business now owns the Spirograph, Monopoly, Tonka, Parker Brothers and Playskool brands, and many more iconic toys and board games.
LG Corp, one of South Korea’s biggest conglomerates, didn’t start off as an electronics giant. Conceived in 1947 as Lak-Hui Chemical Industrial Corp, it expanded its growing plastics business in 1958 with the establishment of GoldStar Co. Lak-Hui and GoldStar eventually merged to become Lucky GoldStar, which was the beginning of what is now known as LG. In the 1950s the company produced the very first radio in Korea, sold under the GoldStar name, and it would go on to manufacture telephones, refrigerators and TV sets. The Lucky brand was associated with bathroom soap, toothpaste and laundry powder. But in 1997 Lucky GoldStar was rebadged as “LG” to better compete in Western markets. LG Electronics is now the flagship company of LG Corp, and one of the biggest players in the world market for mobile phones and high-definition television sets.
Nintendo was originally a Kyoto-based producer of handmade playing cards, formed in 1889. Card sales began to falter in the 1960s, and the company went into instant noodles, plastic building blocks, a taxi service and a chain of short-stay “love” hotels. But toys and entertainment proved more fruitful. One of the company’s engineers, Gunpei Yokoi, invented an extendable grabbing hand in 1966, which Nintendo turned into the Ultra Hand toy. Yokoi later put together the first home video game machine and, most famously, created the Nintendo Game Boy console released in 1989. In the 1970s a young designer named Shigeru Miyamoto joined the company and created the characters that became Donkey Kong and Mario. Nintendo’s engineers worked with Miyamoto on the Donkey Kong arcade game, released in 1981, and a gaming legend was born. In 2004 the company released the Nintendo DS, and in 2006 the Wii. Nintendo now has a market capitalisation of about US$17 billion, but back in 2007 it was worth US$73 billion.
The Korean electronics and mobile phone giant started by Byung-Chull Lee in 1938 used to export dried Korean fish, vegetables and fruit to Manchuria and Beijing. It then moved into flour mills and confectionery machines, followed by textiles and life insurance. Samsung didn’t get into electronics until the late 1960s, producing its first black-and-white television set in 1970. The high-tech side did not become highly profitable until the 1980s, when the company began to export computers, VCRs and tape recorders globally. By the 1990s, Samsung was focusing on memory and hard drives for computers. Nowadays it is most famous for its Android phones and tablets, and digital televisions.
In 1970, a 20-year-old Richard Branson was selling vinyl records by mail-order as a way to undercut high-street record shop prices. The company’s motto was: “We’re complete virgins at business.” A postal strike nearly derailed the venture, so Branson set up his own record shop in 1971, and then a record label which signed acts including Mike Oldfield and the Sex Pistols. Virgin Atlantic airlines was born in 1984, Virgin Radio in 1993 and Virgin Mobile in 1999. In 2004, Branson announced the beginning of a luxury space travel service – Virgin Galactic. Branson sold off the record label that started it all for a rumoured US$1 billion in 1992, but the Virgin Group now reaches across the fitness industry, telecommunications, cola, bridal wear, travel and financial services. There have been around 400 Virgin companies. No doubt more will follow.
The world’s most famous chewing gum brand sold scouring soap and baking powder in 1891. But the free chewing gum it offered its customers along with the baking powder proved a stronger enticement. The man behind the company, William Wrigley, quickly redirected the business to produce a line of gums and just two years later introduced Wrigley’s Spearmint and Juicy Fruit, brands that still thrive today.