Unlocking Strategic Growth
Five models for modern brands to create product portfolios, expand into new categories, saturate their market, and protect their pricing power
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Brand strategy is the way by which brands create and deliver value to their customers, convince them to pay for this value, and harness their payments into profit. Business models power brand strategy, based on the specific value proposition made to clients and the value architecture that’s created around it.
It’s important for companies to select their brand strategy early, because a clear brand strategy charts the trajectory of brand growth. For example, a brand strategy can be optimized for a quick growth (Uber), for creating a monopoly (Google), for undermining competition through lower pricing (Zara), for creating strong symbolic capital (Apple), for remaking a category (Warby Parker), for establishing itself as a status symbol (Tesla), or for something else.
Brand strategy prioritizes a company’s products and services, defines and protects the price, and focuses audience segmentation and communication. It ensures that there is coherence in the brand growth, and a plan around entering new categories and markets. Brand strategy directs product and brand extensions, and guides the market share expansion. Brand strategy answers questions like, “what is good for my brand long-term?”, “how is this business decision going to impact our culture?”, “what are the main objectives of this product line or brand extension (awareness, acquisition, loyalty)?” or, “how is this product line or brand extension part of my big plan?”
Brand strategy streamlines decision-making. It makes sure that all products express the brand values and reinforce the brand identity in a differentiated yet consistent way. For example, Danny Meyer’s restaurants are all different, but consistent in how they deliver the power of hospitality through service excellence, welcoming experience, and product quality. Brand strategy is a standardized and structured process for adding value through investing in the already successful model (e.g. Shake Shack), optimizing performance (e.g. pick-up and delivery), or investing in creativity (e.g. Shake ShackBurger Kit).
So far, companies have been really good in creating business models and brand strategies around economic value. They have a lofty goal of building brands so strong that everyone would want to wear a t-shirt with its logo on it, yet are still trapped in the manufacturing mindset, focused on monetization, efficiency, and productivity growth. There’s a disconnect in the value they aspire to capture and the value they’re actually capturing.
To close this gap, I devised five brand strategy models and their underlying business architectures. Some of these models already existed in some form, and I adapted them to the modern brand landscape; others I came up with. The job of these models is to guide companies to create symbolic value and turn it into business value. They explain how a brand expands into new product and service categories and how brand portfolios operate. They aim to reconcile business growth and brand culture, and represent different growth trajectories.
The five models are: the Diamond Model, the Galaxy Model, the Wonder Wheel model, the Reverse Pyramid model, and the DJ model.