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In the early 1990s, personal computers were still somewhat a novelty. At that time, Coleco

manufactured a small computer called Adam. In addition, it sold Colecovision games for home computers. Coleco marketed Adam and its computer games heavily, hoping in 1992 for a hot seller during the Christmas and holiday gift season. However, Adam and Colecovision did not sell well. Coleco found itself close to bankruptcy. Then in 1993 Coleco purchased the license to manufacture Cabbage Patch Dolls. It began production for Christmas 1993. Coleco widely publicized the dolls' arrival at toy stores, but managers anticipated greater sales of Adam in their production schedules. They did not emphasize production of the Cabbage Patch Dolls. These dolls became hot sellers that Christmas, and inventories were depleted rapidly. The scarcity generated so much interest that customers fought with each other for the dolls and even wrecked some toy stores while trying to purchase Cabbage Patch Dolls for the holidays. Because of the shortage, advertising for the dolls was canceled shortly after their introduction. Coleco's managers continued to think that the company's reputation would be based on computers. However, Cabbage Patch Dolls became their most successful product for the next several years. After success with Cabbage Patch Dolls and action figure toys called Masters of the universe, Coleco continued to aim for hot sellers. This strategy involved a great deal of uncertainty, and by 1998 the company was bankrupt. What went wrong with Coleco's decision to emphasize production of Adam instead of Cabbage Patch Dolls?

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