Not much has been written about integrating business strategy and brand strategy. It is surprising to me because this is the arena in which I most often find myself consulting. When I was at Harvard Business School my largest concentration was in business strategy. I was weaned on Michael Porter’s Competitive Strategy, Competitive Advantage and The Competitive Advantage of Nations. I am a firm believer that brand strategy, business strategy, business model strategy and competitive strategy need to be a finely woven tapestry. But to begin to envision this, we must understand the key components of each of these.
The Key Pieces
Organization/business strategy considers many things – mission, vision and values, organization culture, product/service portfolio, bundling/unbundling, market structure, entry barriers, exit barriers, market segmentation, market focus, proprietary technology, network effects, economies of scale, accessibility/distribution channels, value proposition, sources of differentiation, branding, business model/revenue sources, cost structure, fixed versus variable versus semi-variable costs, vertical and horizontal integration, strategic partnerships, supply and demand, substitute products, disruptive technologies, societal trends, cash flow, organization structure, organizational agility, keys for executional success and sequencing of moves.
Business model strategy considers how many of these factors come together to create a profitable business model. Key to this are target customers/customer base, revenue sources, distribution channels, pricing strategy, cost structure, sources of financing, cash flow and reinvestment strategies.
Competitive strategy focuses on achieving competitive advantage in the long run, often via one of these three approaches: cost leadership, competitive differentiation or customer segment focus.
Brand strategy should include target customer definition (including prioritization of need segments), competitive frame of reference, differentiating benefits, pricing strategy, distribution strategy and how one will achieve awareness, relevant differentiation, customer value, brand accessibility and emotional connection to the brand. Brand strategy can also include the brand archetype and personality, which are highly correlated with the organization’s culture.
As you can see, there are several points of intersection between these types of strategy. Here are just some examples:
- Mission, vision and values are closely related to brand essence and promise
- Organization culture generally should have some alignment with brand archetype and personality
- Competitive frame of reference, market structure, market segments and target customers are fundamentally important to most of these strategies
- Product/service portfolio is the way the brand delivers on its promise
- The value proposition and sources of differentiation are closely related to brand positioning
- Business and brand strategy should consider accessibility and distribution
- Business model strategy, competitive strategy and brand strategy must consider pricing strategy
- Brand extension sometimes requires strategic partnerships
- All of these must consider societal trends to be viable in the long run
So, how does one insure that these strategies dovetail properly? Business strategy and business model strategy belong in the executive suite perhaps with the help of business strategy consultants. Competitive strategy links these to brand strategy.
Here are a few things that can help with integration. The brand strategy function should exist at a very high level in the organization. Graphic designers, copywriters and ad agency teams should not be crafting high-level brand strategy. They are too far removed from the work and discipline of business, business model and competitive strategy formulation. Marketing communication strategy and advertising campaign strategy are the appropriate level of strategy formulation for these functions.
Another integrating mechanism is the careful consideration of the nesting and sequencing of the strategic plans. That is, where does the brand plan fit into business planning?
Some organizations find that it is useful to use the brand as a way to rally the organization around its high level strategies. In this way, the brand positioning work may closely follow the establishment of the organization’s mission, vision and values.
In addition, it is important to have strategic thinkers and people firmly grounded in marketing research and analytical thought to be a part of the brand management team. Brand management is a left brain/right brand activity. Strategic thought is as important as creative capacity. And sometimes foundational research such as market assessment, attitude and usage studies and market segmentation studies inform strategy formulation in many of these spheres.
Finally, brands should also consider the intersection of business strategy and brand purpose.
Recommended books on business strategy and brand strategy :
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