Brand is NOT a Strategy

Every company has a brand, and we have seen brands come and go over the years. A brand like Sony was the pinnacle of technological innovation and cachet in the1980s and 1990s at the same time that Apple Computer was considered a niche player in the computer field. The names have not changed significantly (albeit Apple moved away from Apple Computer), and yet the Sony “brand” no longer commands a premium nor does it generate excitement with consumers. The competitive advantages that supported the Sony brand were allowed to stagnate while the rest of the industry caught up.

Brands are incredibly powerful symbols for both employees and customers. A well-crafted brand image can certainly attract customers and potentially allow the company to charge a premium price. That is, a ‘brand’ that is properly supported by competitive advantages and constantly reinforced, provides customers with an easy identifyer of those competitive advantages.

However, companies make a big mistake when they over invest in the brand as a strategy rather than the underlying competitive advantages that truly constitute the brand. It is the competitive advantages that supports (creates) the ‘brand name’ that is the focus of the strategy.

Sears was THE go-to store for decades and is now barely alive. In fact, few companies have so systematically failed to adapt and recraft their competitive advantages. Pan Am, Montgomery Ward, Palm, Circuit City, Compaq, Avon, Polaroid, Gateway, Blockbuster and Commodore were all iconic brands. The value of these ‘brand names’ fell as they failed to develop new competitive advantages while the rest of the industry caught up and negated their original competitive advantages.

This ebb and flow of ‘brands’ happens all the time. It is not the brand name.

It is important to understand that a ‘brand name’ has precious little value without a strong set of competitive advantages supporting it. As companies fail to continuously design and effectively implement real strategies, the brand loses value. Fortunately, for most brands, this decline is gradual, as customers have substantial institutional memory. This provides a continuous window within which company executives can develop real strategies that truly separate the company from its competitors and then tie those new elements to the brand. That is the key. Focus on what matters!

Brand is NOT a Strategy