Sunday, 12 May 2013

Brand Strategy is NOT the same thing as Business Strategy


I don't often write rebuttals. However, after a recent debate on Linked with the author of a post entitled 'brand strategy is business strategy' I feel compelled to do so. I would have been happy with brand strategy is a component of business strategy, or even brand strategy is a form of business strategy, but the the author went too far by claiming that brand strategy (as well as marketing strategy) are synonyms for business strategy. And that is a step too far.

I accept that language evolves, but I think that every time you take two distinct words and make them synonyms for each other, you lose something. For example, the words 'hill' and 'mountain' describe two overlapping yet distinct concepts. Sure, we could rename The Rocky Mountains as The Rocky Hills, and described them as big hills to set them apart from smaller hills, but we'd have lost something in our ability to describe and understand the world.

So it is with management concepts. Strategy, marketing, brand, marketing strategy, brand strategy, etc, are all perfectly good terms describing related but distinct concepts. If we start treating them as synonyms for each other we will lose something of our ability to describe and understand the different facets of organisations.

So what are the differences between marketing strategy, brand strategy and business strategy?

Strategy involves trading off short term tactical considerations against longer term, bigger picture objectives. Business strategy involves making such trade-offs in any and all aspects of running a business.

Marketing involves matching what customers want (or can be persuaded to think they want) to what the firm does or can provide.

Brand is the mark a firm uses to symbolise and communicate the meaning it attaches to itself, it's products and it's services. (The word derives from old English 'to burn' and was first used by farmers who literally burnt their mark onto their livestock, but it is now used more generally than that.)

It is as possible to engage in tactical marketing as it is possible to engage in strategic marketing. The same is true of branding.

Similarly, there are many forms of strategy other than marketing strategy: think of HR strategy, IT strategy, even partnering strategy, operational strategy, procurement strategy, innovation strategy, etc, not to mention the overall alignment of business strategy.

These are related but distinct ideas - not synonyms.

If we allow marketing strategy to become a synonym for business strategy, then how would we justify not promoting HR strategy as a synonym for business strategy. That would make marketing strategy a synonym for HR strategy, not to mention IT strategy, etc. Before you know it everything would be a synonym for everything else. That way lies madness!

I frequently encounter people from various disciplines arguing that their discipline is the acme of business strategy, but branding people seem to do so more often and more strongly than most. In my experience this seems to stem from one of two causes: either (1) they are so wrapped up in the importance of branding that they simply fail to be able to conceive of the idea that anything else could be important, or (2) they actually are doing business strategy but for some reason are determined to call it something else.

To those people, I say let's own our disciplines. Value branding and marketing for what they are. Value business strategy for what it is. Understand the similarities and differences between these disciplines, and how they can be combined where needed to achieved desired objectives. But let's not get lazy and try to pretend that they're all the same thing.

I thought I'd finish with an example: imagine a hypothetical European manufacturer of specialised industrial components. It has a strong innovation pipeline and its products are well protected by international patents. Its products are bought locally and globally by large manufacturers whose engineers value its products superiority quality and performance.  The problem is that it can't keep up with rapid growth in demand in the USA, and increasing shipping costs and trade restrictions are cutting into its profits. So it decides to start manufacturing in the USA for the first time. Where should it locate its factory(ies)? How and where will it find staff with the right kinds of skills? How will it train local staff and transfer expertise from Europe whilst maintaining tight control of its Intellectual property? How will it need to adapt to USA labour laws? How quickly should it bring capacity online? How will it distribute the product it manufacturers in the US? In answering all of these questions, the firm develops a perfectly valid business strategy with little, if any, reference to brand or marketing. To describe such a business strategy as being the same thing as branding strategy is completely unhelpful.