The Strategy IS the
About 95% of what
executives in competing companies do is pretty much the same all around. This is good
management. If you are CEO’ing a wireless communication services provider, you strive to put up
an advanced technological infrastructure with a promising future, cool end-user phones, other
devices and accessories, a great service system and competitive prices. Well, this is precisely
where your competitors put their efforts as well. The 5% (give or take) that you do differently
constitutes your strategy. The CEO of Southwest Airlines, the
revolutionary domestic American airline, most of the time does exactly what her colleagues
do. But her firm offers Ticketless travel, and serves meals in the airport during waits, and
not on the plane.
Doing well what
you are supposed to be doing – is a prerequisite for competing. It is definitely not a strategy.
Being better - is a deserving effort, yet it is not a strategy either, especially not in the
long run. How, then, are you supposed to compete? Well, you could offer your clients more than
what your competition offers, for a higher price, for the same price, for a lower price, or –
offer them less value for a lower price. All of these options can give you an edge, but usually
not for long.
You could also
offer something different than what your competition does. You can cater to a need not formerly
satisfied by your category. Nokia, for example, did just that when it decided to treat
cellphones as fashion accessories and later as entertainment devices. Even this approach could
not be considered as an insurance policy. There are no insurance policies in the world of
business. But, if it is difficult or impossible to imitate, or it is something not likely to be
imitated by your competition – then you might just have created for yourself a mini-monopoly of
your own. Well, this is surely an accomplishment that should not be underestimated in a
So, what really
is a strategy? By definition, a strategy is the way by which you are planning to obtain your
goals. In a competitive environment, your goal is that the consumer will prefer you to your
competition. That is why the strategy is, in fact, the way by which you plan to achieve an
advantage over your rivals – in the eyes of your consumers. Almost always, preference can be
achieved only by differentiation, by either doing something other than what your competitors are
doing or by doing things in a markedly dissimilar manner.
There are three
types of differentiations and only one of them constitutes a strategy (or strategic
differentiation). The transient differentiation is often achieved by promotional activities,
such as a big sale. The circumstantial differentiation consists of things like a historical
monopoly, or some kind of personal connection between the consumer and someone in the firm, or a
convenient store location etc'. However, the differentiation we want to focus on is the
strategic differentiation, such that provides a long lasting, circumstance-crossing advantage.
differentiation absolutely necessary? In any case where the consumer must choose between options
– the answer is definitely yes. Why? Because the consumer chooses between alternatives on the
basis of the differences as he or she perceives. Zoom-in on that sentence for a second. Do not
fall into the most common trap of all: the consumer makes choices according to his perception of
differences between alternatives, and not on the basis of what he values most in a product of
strategy is always a simultaneous answer to two questions.
The first one is:
in which consumer group do you identify a potential for buying your product? By 'group' I do not
mean necessarily shared socio-economic and demographic characteristics or even a similarity in
personality or life style. What I mean is that they have in common some factor, enabling you to
make them an offer, which will be more attractive to them than the options they already have, or
at least a refreshingly new one. The second question is: what could you offer them that would
help you realize that potential?
The goal is not
to reach a consensus, nor is it to be OK by everyone. Experience has taught us that the key is
to make a specific group of consumers – even a small one – think that you are irreplaceable.
They will act as your success engine, even amongst consumers who are not as definite in their
attitudes. BMW fans do not believe that Mercedes is a bad car; it’s just that it is not a BMW.
For them, Mercedes is simply incomparable to BMW. That’s how Apple fans feel about
What has all this
to do with branding? A brand is the consumer’s anticipation for a unique and defined experience,
or for a certain unique benefit obtainable solely through consuming/owning a specific
product/service manufactured/offered by a specific company. Thus, the anticipation from a trip
to Paris would be to experience a romantic vacation. The anticipation from Ikea would be –
“state of the art design at a reasonable price”. It is fair to say that a brand is really a
brand only when there exists – among its consumers – such anticipation. If this anticipation is
both exclusive and attractive – you might say that it is a strong brand. A familiar name or logo
- do not suffice to make for a strong brand.
anticipation is evoked and upheld by the marketer’s consistent execution of a business concept
providing the consumer with a unique benefit or with a unique/novel way to deliver a benefit.
This concept is the brand strategy, its promise and its commitment to its target consumers. The
‘third place’ – the neighborhood place you frequent in between work and home offered by
Starbucks - is a brand strategy. But, wait a minute! It is also the differentiation - the
competitive strategy itself! These ARE the 5% that executives do differently in order to gain an
advantage. This is why the brand IS the strategy. Or more accurately – the brand strategy is the
translation of the competitive strategy – into a language of promises made to the
The brand’s role
in the realm of marketing has changed dramatically during the past decade. Today, brand building
no longer constitutes a mere manipulation of the consumer's perceptions and desires, but it is a
creation of a system that on the one-hand makes promises and arouses anticipations, while on the
other-hand it delivers and realizes the promises that it makes.
Back to articles