Most companies aspire to play in the premium segment of a market, emphasizing high quality, high-price products or services. In an increasingly global and competitive world, that strategy leaves them open to competition from low-cost entrants that, along the good-better-best spectrum, are simply good enough. And as companies have seen across a diverse set of industries, those low-cost players, if given enough breathing room, can create a substantial drag on share and profitability. Or, in the case of emerging markets, these same low-cost entrants may represent the dominant and difficult to displace, mass-market incumbents. Flanker brands (typically value segment brands) are nothing new; they represent an important, proven tool in a company's arsenal.
Why do companies fail to execute against their strategy? Key reasons include a 1) a lack of a specific implementation plan with clear owners, milestones, and KPIs, 2) a knowledge gap between the strategy and implementation teams, 3) politics that create the illusion of a zero-sum game, 4) an unwillingness to take risks in the spirit of self-preservation and 5) being bound by conventional, outdated thinking. Companies who fall victim to one or more of these issues often end up mortgaging away their future. There are a number of ways to solve for these issues, but here are a few steps to help you begin to bridge the strategy-execution gap...
Sustaining profitable growth over the long-term is challenging in both product and service markets. Why? Because, over the long-term, markets move towards commoditization as the “best” products and services gain traction and individual competitors do their best to mimic the clear front-runners. As they look to shake off stagnation or actual declines in their share, companies face two choices. The first is competing on price. The second is pursuit of additional clear points of differentiation....
Diageo, the world’s largest producer of spirits and a major player in beer and wine, continues to showcase its ability to not just target and establish strong positions in new markets but to invest in ways that allow it to dominate them. Guinness Nigeria’s Orijin brand is a prime example.
Over the years, Diageo seeded Nigeria and Africa, more broadly, with many of their well-known global brands. But, true to what they have done in other markets and categories, Diageo also knew that, to win, they needed to continue to invest in the market with an offering uniquely suited for this region of the world...
