When Research In Motion unveiled its long-delayed BlackBerry 10, it also announced it was changing its name to BlackBerry.
CEO Thorsten Heins argued that the new name reflects how the company had “transformed [itself] inside and out.
See the companies that took new names >
By choosing a different name, companies hope to convey their transformation and focus. But often that desire for a renewed image is a last ditch effort to breathe life in an irreversibly damaged brand. 24/7 Wall St. has reviewed major corporate name and brand changes over the past few years. These are seven companies that were forced to change their name.
There are several reasons a major corporation decides to take the leap and change its moniker. In many cases, it is to make the name more attractive across a wider market. This happened when the company known a BackRub changed its name to Google Inc., or when “Jerry and David’s Guide to the World Wide Web” changed its name to Yahoo! Inc. Sometimes, the change is an attempt to modernize, and is often as simple as just shortening the name or removing words, as was the case with Apple Computers changing its name to Apple Inc. and Federal Express changing its brand name to FedEx Corp.
While there can be many valid reasons for companies to change or tweak their names — be it startups that grow up, established companies that match their names to their customers’ expectations, mergers and so on — we have focused on those companies that had to change their names to stop declines or even stay in business.
For some of these companies, a single incident precipitated the name change. In 1996, a ValuJet DC-9 crashed in Florida, killing 110 people. The Federal Aviation Administration investigated, and after grounding the airline for three months, determined that the carrier had deliberately allowed unsafe planes to fly. ValuJet eventually acquired smaller airline AirTran, and to distance itself from the brand it took the acquisition’s name.
In other cases of forced corporate name change, it was not a single incident, but a period of inconsistent management, bad press or both that led to the decision. In 2010, the struggling lender formerly known as GMAC became Ally Financial. GMAC had been hit badly by the subprime mortgage crisis. Despite receiving a $17.2 billion bailout from the Treasury, it continues to struggle, failing a federal stress test last year.
A corporate name change is meaningless unless consumers believe there is actually a new product behind the new name. In an interview with 24/7 Wall St., InterBrand London CEO Graham Hales explained that in this age of transparency, a simple name change is not going to turn your company around. “If you’re going to change your name, you’ve got to have a strategy which is changed in line with it, and too often companies change their name and the focus point becomes why they changed their name, and not about what is different about the company,” said Hales.
It remains to be seen whether Ally Financial, or the infamous military mercenary contractor formerly known as Blackwater, which has now changed its name twice, has followed that advice.
These are the seven companies forced to change their names.
See the companies that took new names >
Netflix
Former name: Qwikster
Year changed: 2011
In 2011, having already announced a 60% price hike that infuriated customers, Netflix Inc. introduced Qwikster. The plan, part of Netflix’s attempt to separate its streaming video service from its DVD mailing service, was an instant flop. Customers decried not just the higher costs but also inconvenience of two separate websites and having two bills. Although the price increase was permanent, the Qwikster decision barely lasted a few weeks. In a 2011 conference call, CEO Reed Hastings said of the Qwikster plan, “In hindsight, it’s hard to justify.” He also added, “Qwikster became the symbol of Netflix not listening.”
Academi
Former name: Xe Services, Blackwater USA
Year changed: 2011, 2009
The corporation once known as Blackwater actually has changed its name twice in the past four years. In September 2007, five Blackwater guards were involved in an incident that appeared to involve the killing of 17 Iraqi civilians in Baghdad. In February 2009, Blackwater changed its name to the much less sinister-sounding Xe Services.
Just a few months later, two of its mercenaries fired on an unarmed vehicle and killed two Afghan civilians. In 2011, six months after the second gunman was convicted and sentenced to 37 months in prison for manslaughter, the company again changed its name in 2011, this time to Academi. As reported by The Wall Street Journal, the company’s CEO, Ted Wright, explained the name change was an attempt to appear more “boring” and to demonstrate its renewed focus on acting within the bounds of the law.
Ally Financial
Former name: GMAC
Year changed: 2010
In 2009, GMAC changed the name of its banking unit to Ally Bank. The decision was made to distance the company from its longtime association with government-owned General Motors Co. as well as its own bailout. The next year, GMAC, which in addition to an online retail bank also provides auto and mortgage lending services, changed the name of its entire business to Ally Financial. But under both names the company has struggled despite receiving $16.3 billion in TARP funding. Of this, nearly $10.5 billion remains outstanding, while the U.S. Treasury holds a 74% stake in the lender. Last year alone, the company failed a Federal Reserve stress test evaluating its ability to survive another financial crisis. In May 2012, its mortgage lender and servicer, Residential Capital, filed for bankruptcy.
See the rest of the story at Business Insider
Please follow War Room on Twitter and Facebook.
