Brand Leaders Need to Strategize Differently

In the modern day economy, doing business is not very simple. The old rules are not relevant and do not apply anymore. All the factors as well as the characteristics of markets, consumers and competition have changed. Whether you own a small business or heading an Organization, it helps to understand what and how to do business in the fast changing environment.

If you make a list of companies that are the front runners in competition today in any field and compare with a similar list of companies two decades ago, you will be surprised to find that the list contains a few common names. These companies may have been small in size and reputation two decades ago but you will see that over the years they have grown to become global giants. Stories of Organizations like Ford, GM, Wal-Mart, GE, HP, IBM, Samsung, Toshiba and others have become case studies in management syllabus. These Organizations stand out from the rest and have come to be known as market leaders in their sphere of business. Look at what have made these Organizations what they are and different from the rest. You will then realize that these Organizations are built differently and operate differently from the rest of the Organizations.

These Organizations pursue operational excellence and service leadership in their chosen market relentlessly. They invest wisely into technologies and processes as well as business models that help them deliver higher value to their customers consistently. Their thinking, culture and marketing strategies are significantly different from the rest of the competition.

It makes for interesting case studies to understand these brand leader’s approach to markets and their leadership. One of the prominent things you will notice is that their approach to the market and product is not on short term basis. They always build their product offering with long term perspective. They focus more on growing markets and increasing their consumer base rather than increasing price and booking profits in short time.

Look at the companies like GE, Phillips and others. They invest on new technologies and research to build products for the future, thereby gain significant product advantage early on in the market. Secondly they invest into plants and manufacturing facilities to build capacities to produce high volumes and establish extensive sales network in the target market. While pursuing aggressive sales strategy, they embark on increasing the efficiencies at production and maximizing their capacity utilization. At a stage when they are breaking even, they begin to expand and explore new markets beyond the borders and thus create additional revenue streams that are going to yield growing profits year on year. Very clearly the strategy is to expand the market and grow profits and not book profits by increasing the price of the product and booking profits. As the Organization begins to expand and establish in new markets, they line up further product category extensions and new launches for the next few years. At any point of time, you will find the Companies working on business plan for the next five to ten years in the least.

After a few decades when the local market is saturated and the cost of manufacturing has become expensive, they move and relocate the plants to the markets which are growing and the cost of production is far cheaper. They are able to transfer the plant and machinery, transfer technology and management resources, use the locally available resources and start production in the new country at cheaper costs. In fact they normally increase the production capacity after a while and start exporting from the new facility, thereby keeping total costs under control and generating increasing profits all through.

The strategy of replicating success formula has worked well for most of the Organizations like Honda, Toyota, Ford, GM and others, who have been able to build their own proven methods to achieve operational excellence and transfer the same to new locations, while ensuring that they are able to continue to provide value to their customers and retain their brand reputation as well as leadership.

For such Organizations, brand leadership is not about booking short time profits. It is about growth. By growth, we mean growing markets, growing customers, growing products and building brand reputation. Profits will automatically follow.


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