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Stanley Cup Part 1: Reinvention-The Stanley Cup Story from an ERM Perspective

Monday, February 19, 2024

The One Minute Risk Manager/ERM/Stanley Cup Part 1: Reinvention-The Stanley Cup Story from an ERM Perspective
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In 1913, William Stanley embarked on a quest to devise a solution that would maintain his coffee's temperature throughout his workday. Drawing from his knowledge of transformer development, Stanley crafted an all-steel, double-wall vacuum bottle, proudly bearing his family name. Throughout its  history, Stanley's thermoses have resonated with nature enthusiasts and blue collar workers, with some still using their original Stanley purchased 20 years ago. 

The Stanley cup that most people are crazy about today was introduced in 2016, with average sales. The product boasted features like a handle; the ability to keep drinks hot for five to seven hours and cold for nine to 11 hours; and the fact that it fits inside of most car cup holders.  The craze started with The Buy Guide, an online shopping blog and Instagram account that started in 2017. The Buy Guide’s second post on Instagram, back in November 2017, featured a 40-oz Stanley Quencher. “Of all the insulated cups... this is the one. Just trust,” the post read, touting the product’s features like its handle, straw, ability to keep beverages cold and the fact that it was dishwasher safe.

An employee who worked at Stanley messaged The Buy Guide and said they agreed that they thought the cup was a great product and brought up The Buy Guide’s experience at a meeting with Stanley executives. However, while many brands work with influencers and accounts like The Buy Guide through affiliate marketing, Stanley had not participated in those programs at the time. Instead, Stanley directed the women to place a wholesale order — with a minimum order quantity of 10,000 cups..

The Buy Guide's partnership with Stanley for wholesale orders was a huge success, selling out of 5,000 cups in just four days and the second 5,000 cups in an hour. With a following primarily consisting of women aged 35 to 44, The Buy Guide's loyal audience proved to be a powerful market for Stanley's products.

View Today Show story:
​The Stanley cup craze: How a 110-year-old company went mega-viral

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In 2020, Terence Reilly had just finished a seven-years at Crocs, where he led the strategy that turned the ugly shoe into a fashion staple. Now the president of Stanley, Reilly was poised to do the same for the Quencher. ​“My experience at Crocs told me that that kind of influencer opportunity was just the magic that Stanley might need,” Reilly told CNBC’s Make It. “And we were right. The Buy Guide proved to be amazing partners and helped us create the Quencher phenomenon.”

In a remarkable turn of events, Stanley's 40-ounce insulated tumblers have become the brand's bestselling product, surpassing even the Classic Legendary Bottle. The company's profits have soared from $70 million in 2019 to a projected $750 million by 2023, showcasing the incredible growth and success that Stanley has achieved over its 110-year history.

So Where does ERM come into play?

Enterprise risk management (ERM) goes beyond focusing solely on the negative aspects of risk; it also encompasses speculative risk, where opportunities for gains exist. The decision to launch a new product like the innovative 40-ounce insulated tumblers by Stanley falls under strategic risk, entailing the possibility of loss, no loss, or gain. This bold move was a response to industry trends and competitive pressure, as Stanley aimed to break away from its traditional rugged image and appeal to a wider audience, including women. Leveraging the power of social media, the company recognized the potential of this new market and strategically capitalized on it. By understanding The Buy Guide demographics and conducting an initial 10,000 purchase, Stanley mitigated uncertainty and embraced the upside risk, driving the brand's exponential growth.

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