An Explanation Of The Roles Of Amway Global, Quixtar and Alticor In The Amway Business Model
Amway, Quixtar or Alticor?
Since it was founded in 1959, Amway have gone through various name changes and re-branding, most recently settling for its current incarnation as Amway Global. The company has been known as American Way Association, was recently known as Quixtar in North America, and is owned by a holding company called Alticor. But what’s in a name? Well, when it comes to business, pretty much everything.
What’s In A Name?
A company name is more than just a title on a bit of paper. The name represents who the company are, and what they represent. A strong, powerful brand name that the public know and trust can be the most powerful marketing tool at a company’s disposal. Successfully re-branding a company can rescue it from the abyss, but failure can cause a hitherto successful company to collapse. In the business world, name and image is everything.
The most famous example of the enormous impact that re-branding can have can be seen in the Coke re-branding fiasco of 1985. By the early and mid 1980s, Coca-Cola were losing the ‘Cola wars’ in the US to fierce rivals Pepsi. On top of this, their sugar-free brand Diet Coke was criticised for not tasting like the original product. In an attempt to change their fortunes and increase their sales, The Coca Cola Company announced that a new formula would be introduced, and would be re-branded as New Coke. Despite official surveys suggesting that many drinkers preferred the new taste, a vocal majority expressed dismay and bombarded Cocal Cola with angry criticism. Pepsi revelled in Coke’s apparent failure, and proudly announced that they had won the ‘cola wars’. After only 3 months, Coca Cola reintroduced the old formula as ‘Coca Cola Classic’, and the new version was slowly phased out, until in 2002 it was discontinued completely.
Despite this apparent failure, the Coca Cola re-branding exercise may just have saved the company. It is suggested that the new formula reinvigorated passion and support for Coca Cola, and made the company headlines all over the world. When the classic recipe was reintroduced it made national news headlines, and sales rocketed. It wasn’t long until sales of Coca Cola had over-taken Pepsi, and the re-branding exercise had, totally indirectly and almost by accident, been a remarkable success.
The passion, controversy and emotion that a change of name or image can incite is huge. If you successfully re-brand a company sales could soar, but if you fail, the company could face a huge backlash, and sales could plummet. It is a very risky business, and this probably suggests why most companies are happy to stay as they are.
Amway And Coca Cola – The Similarities
Amway, however, stand out as an extraordinary exception to the norm. Throughout their 51-year history they have been associated with numerous different names and incarnations, to the point where the Amway brand has become quite diluted. The original Amway company are now Amway Global, but have previously been called Quixtar in the US, and have been owned by a holding company called Alticor since 1999. So why did Amway become Quixtar which became Amway Global? And who are Alticor, and what is their role?
In 1959 Rich DeVos and Jay Van Andel founded The American Way Association, in order to represent the growing army of Distributors that they had recruited to sell Nutrilite. Following this, they also formed the Amway Services Corporation, which handled insurance and Distributor benefits, and the Amway Sales Corporation which dealt with product, sales and marketing. In 1964, DeVos and Andel merged all three parts into one, larger company called The Amway Corporation.
Amway continued to trade under this name for the best part of 35 years, until in 1999 they decided to take advantage of the growing potential of the internet, and launch a sister company to this end, which they called Quixtar. The convenience and opportunity provided by the new company, as well as the fact that various criticisms and law-suits had led many people to nickname the company ‘Scamway’, saw almost every Amway Distributor in North America switch to Quixtar. In 2001, Amway announced that it was to merge with Quixtar in North America, and would continue to trade under the name Quixtar in the North American Market. Amway, however, remained the trading name throughout the rest of the world.
Despite this, Rich DeVos added to the confusion when, in 2005, the home of the NBA team he owns, Orlando Magic, was renamed the Amway Arena. Then, in 2007, Amway decided to abandon the Quixtar name, and returned once again to Amway, this time trading under the name Amway Global. In 2010, in keeping with Amway’s business practices, the new home of the Orlando Magic was named the Amway Center, rather than the Amway Arena.
But this isn’t the end of the confusion. Amongst this sea of name changes and image re-brandings, there is another name that stands out – Alticor. Who and what are Alticor?
Alticor was established by DeVos and Van Andel in 1999 as a holding company for a number of their business ventures, which included Amway and Quixtar amongst others. Alticor act as an umbrella company over DeVos and Van Andel’s business interests.
This much uncertainty over the name and image of the company must surely be detrimental to the overall success of the company, given what we have said previously about the importance of a strong and recognizable brand? By changing from Amway to Quixtar and then to Amway Global, the consumer must be left confused about just what each company did or does, and what they stand for. What are the differences between them, if any? Which one is better, if they are all owned and operated by the same people? Are they just the same company with a different name, or are more fundamental changes taking place along with the re-branding?
The Effects Of Amway’s Identity Crisis
These are all questions that are likely to be on the lips of anyone who is not fully involved in, or aware of, Alticor, Amway and Quixtar. Just like the Coca Cola Company in 1985, Amway have attempted to re-brand, yet ultimately returned to a name very similar to the one they left behind originally. But have they got away with it like Coke did, or have they damaged the integrity of their business for good?
The truth is that, like Coke, Amway appear to have succeeded in proving the strength and popularity of the original company name. Quixtar may have looked very popular to begin with, just like the initial taste tests on New Coke, but ultimately the company was always indelibly associated with Amway, and the decision to revert back to the Amway name reflects this. It shows that, despite negative publicity and scandals, the public have faith in Amway, and see it as a name that they don’t want to die. It is also a vote of confidence in the name by the company’s top executives, who clearly have as much faith in the brand as the public do.
So despite its various incarnations and associations with Quixtar, Alticor and American Way Corporation, it seems like the Amway name is here to stay.
If you would like to find out more about strange goings-on within Amway, why not read this fascinating article entitled Is Amway A Cult?