From High Society to Big Society-Check us out we’re in the marketing press again.
We’ve made another appearance in the press- check it out, share it with you friends and colleagues and please do comment or share your opinion if you do have one.
Latest Entries
People make the world of business go round!
Those who argue that money, profits and the economy are the most important things in business need to remember the most fundamental principle of business: No humans = No business
What do Manchester United, and Apple have in common when it comes to HR and Marketing?
When talking about Manchester United’s new rich competitors from across town (Manchester City in case you wondered) and anyone else who covets the business position(Chelsea et al) of Manchester United.
Alex Ferguson has been know to say “They can copy us, but they can´t be us” That’s because the greatness and uniqueness of the business are intimately entwined and the uniqueness does not flourish in a system that can be copied, it flourishes because of the brand and the culture.
What about this from an ex Apple employee when interviewed about his working situation.
“If I was still at Apple, I would not be responding to this question, nor would I feel wronged for not being able to…. The general idea is this: You are part of something much bigger than you. The ideas you talk about in the hall, the neat tricks you figured out in CSS, the unibody machining technique, that’s part of your job, something you are paid to do for Apple’s success, not something you need to blog about to satisfy your ego.” (http://www.appleinsider.com/articles/10/07/07/former_employees_shed_light_on_apples_internal_corporate_culture.html)
Interesting how committed to the cause he was. Not only was he engaged in “the way we do things around here” it came with a level of belief in the brand.
Do you want to know how to steal market share and grow shareholder value? Simple. Be as single minded about your brand as brands like Manchester United, and Apple are, cut no corners. Everything you do as a business should be shaped by your brand and cemented by your culture and belief. The others may try to be you, but they can’t really pull it off.
South Africa’s World Cup, Ubuntu and Lessons in 21st Business Management
So the first World Cup in Africa is over, South Africa did it, a triumph of belief!
I couldn’t help but think how wonderful it was that within a short space of time, South Africa has moved from being pariahs of the world to being World Cup hosts, a fantastic story of change and something to be proud of for all the people of the “Rainbow Nation”.
Another thing the people of Southern Africa should be proud of and something the world of business might like to emulate is the notion of Ubuntu.
Ubuntu is an all encompassing philosophy for the ‘rainbow people’, whilst they were filming human interest stories from communities it’s something I wish the world’s journalists could have brought to the attention of the masses.
Most Nguni languages in Southern Africa will say:“umuntu ngumuntu ngabantu [a person is a person through other persons, or I am because we are]”.
South Africa didn’t have the best players at the World Cup and they weren’t even necessarily thinking they could win the whole World Cup but boy did they try. When you saw the Bafana Bafana players singing en-masse before the match it was more than just for entertainment-it was about togetherness, pride in the nation and belief in the cause.
Ubuntu is a community spirit which stands in sharp contrast to the individualistic greed and chaos that has fuelled the global economic crisis. It’s the community spirit which countless governments are preaching to us as being the way we’ll get out of the economic travails we’ve experienced, it’s about being engaged.
In our age of the “Wicked Problems”- we need a theory of global management consistent with our common human nature. Central to human nature is Identity and The need to belong. The place to begin in developing such a theory is the philosophy of New Brand Tribalism-it’s a shameless plug but something I believe in. Your global management teams should regard the firm as a community, not a collection of individuals and siloed functions.
“If we were the most beautiful, the most intelligent, the most wealthy, the most powerful person – and then found all of a sudden that we were alone on the planet, it wouldn’t amount to a hill of beans”(Bill Clinton)
Communities are bound together by belief and brand’s have an opportunity evoke that belief. It’s time big business understood that the purpose of management in the 21st Century is promoting the common good of the brand and keeping the community in mind.
“Organizations infused with humanness, a pervasive spirit of caring and community, harmony and hospitality, respect and responsiveness will enjoy more sustainable competitive advantage” (Managliso, 2001).
What great stories of community have you got to share with us, we’d love to hear them.
Oh and well done to Spain for becoming the new World Champions.
Watch the Great Man himself Nelson Mandela talk about Ubuntu: What is the meaning of Ubuntu? – The Ubuntu experience explained by Nelson Mandela
Alpha Tribes: Yahoo and Google- The battle of Internet Search
Industry: Internet Search
The Contenders: Google vs Yahoo!
The Winner: Google
Summary
Google is arguably the most successful company of the 21st Century and is unquestionably the leading innovator in its field. No organisation is perfect but Google rates highly as an organisation that intuitively understands how to manage the “wicked problems” of this Century and keeps the brand at the heart of everything it does.
Performance and Sustainability
Google, along with Amazon.com, has weathered the recession better than most other global brands, and has seen the value of its brand grow by over 20 per cent during the economic downturn. It has acquired over 50 companies, many of which are not in line with its original core area of search. The company has successfully integrated its acquisitions, which has resulted in Google entering new and unrelated areas.
Google is growing massively. From origins as a pure tech company, it has transformed into much more of a brand-based business focussed on innovation. It is starting to become a truly consumer brand, leaving traditional competitors like Yahoo! in its midst and competing for the belief, market share and wallets of consumers against companies like Apple, Nokia and Microsoft.
Innovative Tendencies
Google’s main site is a great example of simplification and differentiation. Alongside companies such as Apple, it really does represent a business firmly in tune with the 21st Century, which has been successful in changing the way so many people live.
Whilst Google didn’t start the Internet search industry, as a new entrant it managed to break the rules that many existing players were conforming to. You can put the company’s innovation down to the way it thinks rather than what it knows. Innovators like Google are rule breakers.
Tribal Leadership
Google does things its own way and it’s not afraid who knows it. From the company’s tribal initiation practices of welcoming Nooglers to the tribe, to its well regarded Google employee cafe/restaurant, work out rooms, or its innovation free time for staff, Google’s success can be attributed to a brand, culture and philosophy that permeates the entire organisation. It motivates and engages and inspires all who come into contact with the company.
Tribal Influence
Harry Truman, the 33rd President of the United States once said that “Men make history, and not the other way around. In periods where there is no leadership, society stands still. Progress occurs when courageous, skilful leaders seize the opportunity to change things for the better.” In many ways Google epitomises progress and you can’t argue that it has changed things.
The very fact that it is common place to talk about the “Google Generation” indicates that the company has had a profound impact on the way people do things. When we talk about finding information, people ask “why don’t you Google it?” The belief that Google is the best place to find information seems to transcend boundaries.
With its purchase of YouTube, Google also now influences the economics of the music industry and has forced music labels to adapt the way they do business too. Not bad for a search engine that grew from humble beginnings.
Product vs Brand Focus
Google’s success in the hyper-competitive markets it operates is largely based on the company’s ability to utilise its corporate brand to drive daily actions geared towards achieving its corporate mission, which has helped propel the company to success.
Authenticity/Magnetism/Honesty
The world’s biggest and favourite search engine owes much of its success to a simple rule: don’t be evil. Google has managed to create an enjoyable and authentic experience for everyone involved in the business, from users, employees, and investors.
The Loser: Yahoo!
Summary
In the early days of internet mass-adoption, Yahoo! was perceived as the go-to search engine. However, as a quirky young upstart called Google grew, Yahoo! missed opportunity after opportunity to consolidate its market-leading position. It is safe to say that this has led to some tough times for the organisation and its market share has crashed to a little over 6%.
Performance and Sustainability
When you compare Yahoo!’s performance to Google, Yahoo! inevitably comes up short. But who doesn’t? Yahoo! has been plagued by an identity crisis for many years – one minute it’s a search company, the next it’s not. There is considerable confusion about who the company is and what it wants people believe in.
The company’s proposed alliance with Microsoft demonstrates how desperate Yahoo!’s market performance has become – even if the alliance proceeds, the combined market share for Yahoo! and Microsoft will still be around 10%. With a market share of 85%+, Google will hardly be shaking in its boots.
Innovative Tendencies
Before Google came along, Yahoo! pretty much dominated the internet search world. Why has Google taken over? Google releases a phone and everyone gets excited – would the same happen if Yahoo! made a phone? “A phone’s a phone and they do the same thing don’t they?” Enough said!
Tribal Leadership
Yahoo! doesn’t understand, motivate and therefore cannot grow its tribes at the moment. It will spend vast amounts of money trying to create an army of followers but if the company had nurtured its tribe as it grew, it would cost them a lot less and the value would be more. By establishing a tribe that supports you, they will fight for your values as a collective rather than you fighting for their attention. Yahoo! is very much fighting for attention.
Tribal Influence
Does anyone remember when Yahoo! innovated? Or at least acquired innovation? Yahoo! innovated with search, its directory and helped launch the worldwide web. But when was the last time Yahoo! innovated on anything instead of chased a market? If it is going to compete with the Google juggernaut, it is clear that the company needs to harness the power of its brand tribe and build that belief in the brand again.
Product vs Brand Focus
Yahoo! is still in the search game it helped create, but there’s little mention of its brand or the tribe it hopes to engage with. Any wonder why this company has been lagging so much?
Authenticity/Magnetism/Honesty
You could say that Yahoo! is genuine – whilst it tries to be more than it is, the company doesn’t seem to actively lie about its offerings or performance. Does the company have a marked differentiation in the market – maybe, but what is it?
When you talk about heritage and familiarity, Yahoo! has it in spades, but when you start to look at its business momentum, and if you ask the question whether it unifies and influences its brand tribes that becomes a very different story. Authenticity has different meanings for everyone. To some, authenticity means simply staying true to oneself. To others, authenticity implies playing a unique positive role in the community. Whilst there may not be a universal definition, what we’re talking about here is the opportunity for Yahoo! to energise its community, both inside and outside the organisation, by giving them something to believe in. But for Yahoo!’s tribe, they first need to know what the company stands for.
Alpha Tribes: Innocent Drinks and PJ Smoothies (Pepsi)
The Contenders: Innocent vs PJ Smoothies
The Winner: Innocent
Summary
At the start of the 21st Century, many brands came to the realisation that they needed to become more personable, sound less stuffy and portray a less corporate persona. No organisation has embraced this ethos more than Innocent and when it comes to cultural influence, no-one has quite captured this “down-to -earth” approach as well as it has. Innocent has also built a highly-successful brand community too – think about the millions of people that contribute to the company’s annual ‘Big Knit’ campaign or about Barry, the ordinary customer that took his belief further and had the Innocent logo tattooed on his arm. Innocent – a brand of the times or just a clever business that intuitively understood the power of brand tribes?
Performance and Sustainability
Innocent is the UK’s fastest growing food and drinks company and the nation’s number one Smoothie brand. Established in May 1999, the company is undoubtedly successful, already generating a turnover in excess of £100m per year and selling more than two million smoothies a week. Innocent also has aggressive growth targets in place, with the aim of establishing itself as the global market leader within the next 10 years.
The company has already seen off its most established competitor, PJ Smoothies, and Coca Cola has bought a stake in the organisation – Innocent is here for the long run.
Innovative Tendencies
Innocent has ensured that innovative tendencies are at the core of its business. Seasonal versions, kids’ smoothies, the Innocent Foundation, Fruitstock, brand-led promotions like “Buy one get one tree”, ethical sourcing and Veg Pots are all key indicators of the brand’s inventiveness. And who could forget the ‘Banana Phone’, the direct line that ensures consumers can always speak to someone at Innocent Towers if they have a query – a truly innovative approach to customer service.
Tribal Leadership
Innocent does things in its own way; consistently winning awards for its employment practices and seem to have weathered the storm over their liaison with Coca Cola. There’s a reason why the owners are now regulars on the speaker circuit sharing their wisdom and their practices. They’ve done it their own way and they are widely respected for doing so.
Tribal Influence
Imitation is the sincerest form of flattery and many brands have tried to adopt ‘the Innocent way’. Indeed, even politicians are trying to copy this approach – as Jonathan Freedland recently wrote in The Guardian, “[The Labour campaign team have] taken a look at the branding of Innocent smoothies, hoping the authentic, unspun look might fit their own ‘unairbrushable’ product, G Brown. They were heartened by the reaction to the retouched Cameron poster, which suggests people are sick of the slick trickery associated with the age of Blair.”
Product vs Brand Focus
For Innocent, it’s always been about the brand. The tribe has followed and continues to grow because people truly believe in the brand.
Authenticity/Magnetism/Honesty
Innocent still retains its unshakeable belief in the importance of healthy and natural foods. Whilst, some consumers reacted angrily to the relationship with Coca Cola, which must have caused some damage to its tribe, the company still has a passionate and loyal brand tribe. Innocent remains a magnetic brand that is indeed authentic.
The Loser: PJ Smoothies
Summary
PJ Smoothies, backed by PepsiCo, effectively created the UK smoothie market, before a privately- owned little upstart called Innocent came along and took them on. It’s fair to say Innocent won. The mythical Pete and Johnny never really existed and the company itself didn’t really stand for anything other than a decent product that was the first to grasp a new part of the drinks market. With Innocent and numerous own-label smoothie brands entering the market, PJ Smoothies quickly proved to be a one-trick pony and Pepsi decided it would be best to focus on its Tropicana brand, which is still performing well in a tough market.
Whilst Innocent re-shaped the smoothie sub-category, PJ Smoothies seemed to go the other way rapidly. Once the slide started, there was no saving the brand – not even a £4.5 million marketing investment in 2008 and hopes to make their smoothie more mainstream by repositioning the product at lower price point, were able to turn PJ Smoothies’ fortunes around. In the 21st Century it’s not always about size, product or price points, PJ Smoothies found this out the hard way.
Performance and Sustainability
Being the first into a market place supported by a corporate giant with massive resources means you’re destined for sustained success doesn’t it? Not in PJ Smoothies’ case. The company no longer exists after Pepsi decided it wasn’t convinced by the long-term health or prosperity of the brand. Pete and Johnny’s smoothies have now gone into retirement and it is noticeable how little noise was made when this brand and business vanished off the earth.
Innovative Tendencies
The company pioneered the smoothies category, however it never seemed to get to grips with the changing market or the need for a strong brand belief. With the mythical Pete and Johnny at the core of the brand, the company could have had a lot of fun and built a community around its products but in the end it seemed convinced that the product and marketing spend could win the day.
The problem was that Innocent came along with a better product in the eyes of the consumer and a brand around which a community could form. In contrast, PJ Smoothies seemingly couldn’t innovate beyond its base product.
Tribal Leadership
For PJ Smoothies, it was originally about the product. It then became about price. There was never a focus on building or motivating a brand tribe.
Tribal Influence
PJ Smoothies had considerable economic impact in the sense that it had a considerable market share and helped to drive awareness of the smoothie market. However the brand is no longer a compelling force and in retirement it doesn’t appear to be missed by many.
Product vs Brand Focus
For PJ Smoothies it was always about the product – the brand even failed to capitalise on the mythical Pete and Johnny to create something more of a personality. Has anyone ever met anyone who worked at PJ Smoothies or aspired to work there in the same way people long to work at Innocent?
Authenticity/Magnetism/Honesty
The brand was clearly not magnetic from a customer experience and belief point of view – it doesn’t exist anymore.
The NBT Declaration of Knowledge:Knowledge is Energy – Knowledge Shared; Is Energy Shared
Knowledge is Energy – Knowledge Shared; Is Energy Shared
In the 20th Century Knowledge was Power. Knowledge was generated and coveted in secret codes and bound within the minds, hard drives and safes of corporations and organisations. It was used as a weapon for gaining advantage on a competitor; to manipulate customers; to maintain or increase your position within your organisation. It you had it; it was yours and not only were you obliged and entrusted to keep it that way by your employers – you instinctively knew it was the guarantee of your career survival or success.
In the 21st Century Knowledge is energy. The emergence of global tribes with access to information, data and real time communication has swept aside the governing notion of knowledge being power. Instead knowledge became empowerment. This force for openness and sharing of information at a social, economic, consumption and even political level is shifting the paradigm of knowledge as a currency for exclusivity and hegemony into a currency for democracy, enlightenment and connectivity.
Knowledge as an energy for the 21st Century is renewable, sustainable, unlimited, storable, transferable and universally accessible (well, one day, hopefully!). Knowledge that is shared openly and without restrictions is a force for social and economic good. It helps our understanding about opportunities and responsibilities, innovation, developing new channels for prosperity, access to link like-minded communities, consumers and wealth generators in new ways that haven’t even yet been invented. It’s the resource of human ingenuity that is the only thing on the planet that can solve many of the overwhelming issues and problems we face. It can and should be used to break down barriers between class, gender, geography, people, power, opportunity. It brings Tribes together in a positive and creative way. Inside, outside…together.
Jon comments on Dan’s Book-Thou shalt not Greenwash
As some of you may know the NBT library is active and working to encourage the sharing of knowledge, our NBT friend Jon has written a bit of a review of the book he received and read. Check it out on Jon’s blog
http://j0n1.com/2010/05/19/thou-shalt-not-greenwash/
Alpha Tribes: Diesel vs Levi’s
We present to you another Alpha Tribes analysis of Diesel and Levi’s. The aim of this report is to give you an insight into how we think and for us to highlight which brands we believe demonstrating the traits of a truly tribal brand (whether knowingly or not), against organisations within the same sectors that have not yet embraced such principles.
Industry: Fashion
The Contenders: Diesel vs Levi’s
The Winner: Diesel
Summary
Founded in 1978, Diesel has always been a leader; a brand that sets the benchmark for creating rather than following trends.
Whilst brands such as Levi’s have sought to get everyone into a pair of 501s, Diesel has created a premium brand for independent thinking people who follow their own unique path in life, it has created a business that people can identify with and believe in.
As a brand that has a strong belief in challenging established conventions, it comes as no surprise that this is a company that takes chances and is successfully different from its competitors not just because of its products or services but because of what lies within its soul.
Great brands are not based on great ads or clever logos. They’re built on substance, belief and a consistency of behaviour that people can be part of; Diesel has established a strong sense of identity and belonging and that goes a long way to understanding their high performance and the tribe that surrounds this brand.
Performance and Sustainability
Diesel has demonstrated a substantial increase in performance in recent years. By 2009, annual sales were approximately €1.3 billion. Revenue is largely derived from denim sales, but the brand has also become extremely successful and influential through its range of accessories and children’s wear, Diesel Kid. The brand is now Number 2 in the European casual apparel market and is a brand that consumers truly trust.
Innovative Tendencies
Diesel is well known for being one of the true innovators in fashion retail. It was the first brand to launch distressed denim and it has been extremely successful in branching out into accessories and children’s wear. As a result, Diesel has become a strong competitor to the established market leader, Levi’s. The brand’s design, advertising and management style embodies a love of humour, creativity and irreverence towards established rules, which its brand tribe truly buys into.
Tribal Leadership
The company is well known for picking out social issues and things people are debating in the public and repackaging them in interesting new ways that engage its brand tribe. Its “Stay Young Forever” campaign in 2001 was Diesel’s commentary on the ethical implications of cloning and stem cell technology, whilst its “Stop Knifing, Start Spooning,” employee activity was a humorous commentary about the problem of knife crime in London. For Diesel, the activities they take part in are wholly appropriate based on its core beliefs – and the results speak for themselves.
Tribal Influence
In a staid market, Diesel has imposed originality and creativity by bringing out a personality that’s about humour, daring colours and provocation. The company is also focussed on appealing to the style-conscious and higher end of the market, raising its profile as a truly aspirational brand.
Product vs Brand Focus
For Diesel, the focus has always been about the brand. In a 2009 interview with Brand Channel, Founder, Renzo Rosso, said: “Diesel is an international brand—very trendy, very young and very cool. I want every teenager to dream about having Diesel jeans. Diesel doesn’t have to be the biggest brand on earth, but the coolest. For me, a cool image is more important than a big turnover.” Asked what is the essence of Diesel’s brand, Rosso answered, “Passion and creativity. They are the DNA of the brand and the basis for all of our products, our daily work and our lifestyle. My goal is to be a pioneer in everything we do.”
Authenticity/Magnetism/Honesty
Diesel has established a unique brand positioning and is indeed authentic. It presents customers with a brand choice rather than functionality. The brand’s magnetism is exemplified by its HR processes. Employees are drawn to the organisation because they feel a strong affinity with the company’s clothes and attitude, which means that Diesel often recruits from its passionate customer tribe, rather than from those who are simply looking for a good job in fashion retail.
The Loser: Levi’s
Summary
Levi’s is a bona fide global brand, and is widely known to have invented jeans. However in mature markets consumers are increasingly resisting what they see as bland ubiquity. Consumers do not embrace a brand just because a company regularly releases new products, marketing campaigns, or promotion; they embrace it because they feel it and believe it. This is where Levi’s has fallen short – in recent years it has lost its edge and has suffered as a consequence in established economies.
Nonetheless, the brand has continued to perform well in emerging markets and its inventiveness in these markets suggests there could be a bright future if the company can adopt these bold approaches in traditional markets.
Performance and Sustainability
Levi’s was once the unchallenged leader in its field but in recent years the company has lost its competitive edge and has spent a decade in the doldrums. Whilst still strong in the Americas and Asia, Levi’s has seen sales slump in mature markets such as the United States, Europe and Japan.
In terms of future success, the question is whether Levi’s can become relevant again. Performance growth in the America’s and Asia would suggest there is hope of a turnaround and if the brand can create the right conditions, its brand tribe could flourish both inside and outside the organisation.
Innovative Tendencies
Denim products, Straight-cut, loose fit, low rise, twisted, classic, contemporary, organic. You name it, Levi’s probably covers it. The company has even branched out into branded mobile phones. The company is clearly not afraid to bring out new products or ideas, though it’s perhaps a little unfocussed on the brand, trying to be all things to all people. Anyone remember the “Engineered Range”? The less said about that “innovation” the better probably.
However, there are signs of improvement in the emerging markets – take the clever innovation in India of offering an instalment plan to buy jeans and other products. With this thinking and focus on belief building interventions around their brand is there any wonder Levi’s is seeing growth in the emerging markets? If the brand would only start adopting some more of this inventiveness in its mature markets, the company could see its brand tribe reinvigorated.
Tribal Leadership
Over the past decade Levi’s has been so inwardly focussed that it missed the great change occurring in the world where customers crave more than just products with a name and fancy advertising.
After years of spin and gloss, people now crave something more from this brand. Levi’s does have an opportunity to re-invent what it means to the 21st Century consumer. The opportunity is to stop talking about or focussing on equipping people with jeans, but by creating the environment and conditions that projects an aura, an attractive group identity.
Tribal Influence
Synonymous with the word “jeans”, Levi’s created the market and led the category for decades. In the 1990s, it lost significant market share and in 2010 the brand still seems to be carrying that injury. The company has been trying to get itself back on track but it’s hard when for years it was coasting on sheer size rather than changing with the times and nurturing the Levi’s brand tribe. The company has also started competing on cost and has a huge distribution network so there is very little scarcity and lots of bargain bin hunting, which surely can’t be desirable.
Product vs Brand Focus
Levi’s continues to build everything out from the product, which given it invented jeans is perhaps understandable. However, the brand must shift its focus if it is to finally shake off its troubles from recent years and re-engage with its brand tribe effectively.
Authenticity/Magnetism/Honesty
Levi’s remains popular, but is struggling to retain its cool as younger upstarts such as Diesel increasingly eat into its market share by creating a persona and something to believe in.
Alpha Tribes: Nike and Adidas
Industry: Sports Apparel – The Contenders: Adidas vs Nike
With the World Cup currently going on in South Africa and much being said in the press about- Adidas’s Jabulani ball ( http://www.csmonitor.com/World/Africa/2010/0618/World-Cup-2010-Is-the-Jabulani-ball-bad-for-the-World-Cup)
and
Nike’s ambush marketing attempts
(http://www.reuters.com/article/sportsNews/idUSTRE65A5AO20100611 ). It seems an appropriate time for us to share our Alpha Tribes analysis of Nike and Adidas – is it all about function or is there more to it? We’d love to hear your thoughts.
The Winner: Nike
Summary
Nike is globally synonymous with innovation, performance and is a very good example of a company that has intuitively taken on tribal principles of the brand as they have moved towards market excellence. In the mid 2000s, the brand was heavily criticised for the poor working conditions of employees in developing nations and protest groups urged consumers not to buy Nike products. The company appears to have emerged from this crisis stronger and with a focus on the engaging with its brand tribe more effectively.
Performance and Sustainability
As an organisation, Nike has proved to be extremely successful. It is the largest manufacturer of athletic footwear and apparel worldwide by sales and its revenue in its 2008 fiscal Year were in excess of $18.6 billion. The Company is targeting top line revenue growth of $23 Billion by 2011, and anticipates that 75% of this growth will be generated by the Nike brand and will be driven by focusing on creating premium consumer experiences built on product innovation, brand leadership and elevated retail presence.
Innovative Tendencies
Nike has been synonymous with innovation throughout its entire history. Unlike its competitors, the company has always focussed on building brand belief and has always been opportunistic and unique in terms of how it promotes itself. Rather than making adverts about trainer technology, the company focussed on promoting an ideology of self-improvement with its slogan, “Just do it”.
In terms of products, Nike created the waffle shoe and then the iconic Nike Air range. Innovation and adapting to change are close to the core of the brand and people at Nike don’t seem phased by the prospect of change. Like the elite sports people they serve, Nike’s leaders are more likely to embrace a challenge and set new standards than stick to the status quo. Nike Town and the brand’s unique approach to the store experience is just one example of this.
Tribal Leadership
Nike was not only quick to understand the concept of the tribe but it was able to leverage its collective assets to build an incredibly strong brand tribe. Widely accepted as one of the few iconic brands, Nike has been able to develop a status that transcends functional benefits. The declining authority of traditional institutions like the Family and Church has created a society that questions a lot of things, but retains the need to believe and belong. Nike as a brand took leadership and was one of the earliest brands to focus on filling this void.
Most people will have heard of Phil Knight the company founder, a charismatic leader with a penchant for doing things differently. Aside from building a major force in the business world, and a reputation as business leader many in the modern business world respect, what Knight and his tribal leadership team have been most successful at doing within Nike is to synchronise the brand, culture and strategy.
Nelson Ferris, Head of Nike’s Corporate Education Department once stated that, “The Swoosh represents something other than just a company. It represents a whole value system.” Ferris, a long-time employee, even has the Swoosh tattooed above his ankle. “It stops being a job and starts to become a way that you are defining the way you are living on earth.”
Tribal Influence
Nike has made understanding its heritage and brand an intrinsic part of its corporate culture. Its brand is truly ubiquitous – the company’s growth has never really been based on the technical superiority of its products, its success has been built on transforming the technology and design of its products into a high performance brand people believe in.
Product vs Brand Focus
Many of Nike’s competitors get hung up on what exactly Nike is selling in a rational sense and try to compete on technical superiority. This is of little consequence to Nike as it is too busy focusing on its brand and the opportunities this brings.
Authenticity/Magnetism/Honesty
Authenticity goes someway to explain why Nike wasn’t terminally damaged by the Asian sweatshop fiasco. Whilst the anti-sweatshop tribe caused Nike trouble, it found it difficult to completely penetrate the brand. Nike never presented itself as a “wholesome nice competitor” rather it is more closely representative of the “survival of the fittest” ethic. Nike represents a “give it a go and see if you can win” mentality as does the majority of its tribe. The Nike brand belief is central to everything the company does, and this works for customers and employees together.
The Loser: Adidas
Summary
Adidas is a successful brand but it has run into significant challenges in recent years and has suffered from dwindling market share in numerous major countries. Adidas clearly plays second fiddle to the alpha brand tribe that is Nike – Nike controls 33% of the market worldwide and has a large but surmountable lead over all of its rivals. If Adidas continues to focus on process and product excellence rather than its brand there will be further competitive pressures from emerging brands such as Chinese athletic wear maker Li Ning.
Whilst Adidas is a highly successful brand that has ridden its luck throughout its history, at some point the luck is going to run out and it will need a contingency plan.
Performance and Sustainability
Whilst the company has traditionally performed well, Adidas has seen a decline in demand for its products in mature markets. Although Adidas and Nike are believed to control around 40% of the world’s wholesale market for active sportswear and athletic footwear, and a little over half of the branded segment, Nike almost wiped out Adidas in the United States causing its market share to drop from 60% to less than 3% in the early 1990s.
In 2009, Adidas’ fortunes waned in much of the world, except for Latin America. In the first nine months of the year, North American sales fell 11% from the previous year; European sales declined 8% while Asia fell 9%. However, the brand enjoyed a 19% year-over-year gain in Latin America.
Remember the time when sneakers were just sneakers. The only big decision a consumer had to make was whether to go for high tops or low tops. Nowadays consumers buy different pairs for different occasions and situations and they are faced with numerous brand choices.
Nike raced ahead of the market by identifying and unifying a tribe around its brand, the rest scrambled around. Adidas followed by focussing on product innovation but they have evolved to stand for individual talent- an idea related to competing and winning against your internal limitations and fears.
Innovative Tendencies
The initial strength of Adidas was its product innovation – Adi Dassler registered more than seven hundred patents. Today, Nike has seemingly taken the lead in this area and Adidas simply follows. For example, celebrity and athlete endorsements, a concept perfected by Nike in the 1980s has only recently been adopted by competitors such as Adidas and Reebok.
Tribal Leadership
Adidas’ takeover of Reebok presents both opportunities and challenges for the future. On one hand, the company now has ownership of a truly American brand in the US but on the other, developing a brand authenticity that incorporates the strengths of both organisations and unites both organisations’ brand tribes, will be a substantial hurdle to overcome.
Tribal Influence
For a brand to be relevant in the 21st Century and sustainable over time, it must understand, bring together and influence its brand tribe inside and outside. This is the opposite of manufacturing a series of external brand images in the hopes that one of them will eventually be attractive to the target audience. Adidas seems to be masters at manufacturing images but less effective at building a strong unified brand tribe.
The company also appears to be more of a follower than a leader when it comes to influencing or encouraging change. For example, Nike Town changed the nature of retailing. Adidas has seemingly copied this formula and has started to launch branded stores to compete. However, these stores still remain product-focussed rather than brand-focussed.
Product vs Brand Focus
Adidas is still focussed very strongly on endorsements and the quality of its products rather than nurturing its brand tribe. It is surprising that they have not learnt from Nike in this respect and mimicked the company’s approach – as it has with other aspects of the business.
Authenticity/Magnetism/Honesty
Is a strong brand that started with a single person’s dream of providing athletes with the best sports gear possible? Over the year, Adidas has grown through venturing into various other markets as a result of acquisitions and increasing its product range, which excelled in markets.
Adidas’ salvation will be in functional products which remain desirable but the company will need to evolve. The brand has to be the place where identity is created, and communicated. For Adidas the brand needs to be the background against which it evolves and changes. The brand can be that magnet for all the pieces of the complex business jigsaw to finally join together.