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What is brand strategy?
What is business strategy?
Some leaders focus entirely on business strategy, delegating brand strategy to the marketing department. Other leaders jump directly into brand strategy without formulating a business strategy. Wise leaders know both are critical to a brand’s success.
by Joe Grossmann · 9 min read
illustrations by Melanie Lindsey
I’m not a business consultant, at least not in the usual sense. I don’t have an MBA. I never worked at McKinsey, Bain, BCG, or one of the Big 4 accounting firms. Even so, for nearly 30 years, owners of businesses and leaders of nonprofits have sought my input on a wide range of business matters.
Why is that?
At some point, every organization needs help in some aspect of their branding, whether it’s design, messaging, or communications. For small-to-medium brands—most of which can’t afford to hire a big business consultancy—a boutique brand firm like ours seems like an affordable and accessible entry point to the world of consultants. (Besides, for many of us, meeting to discuss marketing sounds more pleasant than analyzing a company’s value chain, right?)
Unfortunately, in many cases we’ve been surprised to discover that the leadership team has performed little or no competitive research and hasn’t given much thought to defining their business strategy in a rigorous way. People often hope that a fresh logo or jazzier website will compensate for a lack of research and strategy by raising the brand’s credibility and generating more leads.
If clients just want to look or sound better, why should we be concerned with the details of their business strategy? Indeed, why worry about business strategy at all if updated branding and marketing can help them grow the top line?
Brand strategy requires business strategy
To build a brand the right way, you need a solid foundation. That foundation is business strategy. Everything rests upon it. Business strategy consists of many interrelated choices (e.g., scope of activities, target customers, structure, partnerships, human resources, and operating costs) that help define which goals will or won’t be pursued by the organization.
By contrast, brand strategy is what happens after the foundation is built. Think of brand strategy as a combination of landscape design, architecture, and interior design. Brand strategy is an effort to realize the full potential of building upon that foundation—to envision what that property should look like and how it can serve residents and visitors for many years to come.
Of course, these are all metaphors, but hopefully you get the gist of how brand strategy builds upon business strategy. Now consider what happens when one tries to leap ahead by skipping some of these steps.
Flying the plane while building it
In the world of agile software development, a popular principle is that it’s best to launch a product or a business as quickly as possible—usually in the form of a “minimum viable product”—then figure out what needs to be done to keep it aloft. That’s the idea behind the popular expression “Build the plane while you’re flying it.”
This iterative approach (which is an updated version of “Throw it against the wall and see what sticks.”) might be fruitful in the high-paced world of technology, where progress often lurches forward in “sprints,” but it seldom makes sense in terms of brand strategy.
Putting aside this talk of sticky pasta and risky planes, let’s return to the metaphor of brand buildings.
When someone asks me to help build their brand, I want to know more about the foundation—a lot more. What’s my client doing differently than everyone else, if anything? Where’s their competitor research? Who has my client included among their target customers, clients, or supporters? Who have they excluded? Is there anything my client would not do—e.g., adding new services or products or entering new markets—in an effort to increase sales or raise funds?
All too often, these questions have not been fully explored, and the answers are not readily available. That means we’re on the hook to help create a building (inside and out), without the benefit of a solid foundation or any idea of who may inhabit or visit the building now or later.
That’s how my team members and I often fall into acting as ad hoc business consultants—helping our clients define the specific industry in which they operate and the competitors they face, characterizing target audiences, identifying strengths and weaknesses, and forecasting opportunities and threats.
When that essential information is not ready and waiting for us, we do what we can to construct a provisional foundation—the beginnings of a business strategy—so that we can continue on to develop a robust brand strategy.
So what is business strategy, in a nutshell?
Let’s start with some common misperceptions:
Business strategy is inherently dry.
It is incomprehensible to those of us who didn’t go to business school and therefore requires the services of an MBA or a team of consultants.
Business strategy is strictly about the bottom line—cutting costs in order to maximize profits.
The goal is to vanquish or acquire competitors, and thereby become the biggest in your industry.
While there may be a grain of truth in each of these assumptions, perhaps stemming from experiences in big corporations, business strategy doesn’t need to be any of those things.
With a modicum of patience, anyone can learn the basics of business strategy. The counsel of an MBA might be very helpful, but for the leaders of small or medium brands, it may not be necessary.
And business strategy definitely should not be a zero-sum game, measured in success by the losses you inflict on others. Competing businesses and nonprofits can co-exist and prosper by excelling in different ways.
As author Joan Magretta explains, the essence of business strategy is deceptively simple:
“Strategy explains how an organization, faced with competition, will achieve superior performance.”
Unpacking that definition, however, is not so straightforward. For example, how do you define competition? Or “superior performance”? How is strategy different than setting goals or defining tactics?
(For a fun crash course in the basics of business strategy, try Magretta’s What Is Strategy?, which summarizes the seminal work of Harvard economist Michael Porter. Magretta’s writing is concise and witty, and the storybook-style illustrations are clever and illuminating.)
Vive la différence
Perhaps the most common misstep is believing one can succeed by striving to “do better” or “be the best”—essentially mimicking competitors in almost all regards but hoping that you can out-perform them in terms of speed, cost-cutting, price, or marketing. As Porter has said many times in many ways, competing to be the best is a fool’s errand:
“Strategy is about setting yourself apart from the competition. It’s not a matter of being better at what you do—it's a matter of being different at what you do.”
And being different requires two critical steps: 1) knowing a great deal about your competitors, as well as possible substitutions for your offerings and likely avenues for new entrants to your industry; and 2) making difficult choices about your offerings and with whom you’ll compete in exactly what ways. Here’s Porter again at his pithiest:
“The essence of strategy is choosing what not to do.”
Put another way, you can’t be all things to all people. (Or if you prefer: “stick to your knitting,” “stay in your lane,” and “you do you.”)
It may seem like there must be much more to business strategy than these clichés. And there is: a good deal of research and fine-grained analyses are required—not to mention all those tough decisions about what not to do.
Establishing and maintaining a unique approach to anything can be hard work. But committing to differentiation and sticking with your strategy over time is the key to building that solid foundation. As Magretta says,
“Competition is dynamic. Don’t expect smooth sailing. Customers’ needs shift. New competitors emerge. Old technologies evolve and new ones are created. Change is essential. But so is continuity.”
In other words, don’t push the panic button every time there’s a change in the marketplace. Flexibility and evolution are necessary, but remain mindful of your focus. As you adapt your operations or offerings in order to stay relevant, always remember what your business is not.
If the essence of business strategy is choosing what not to do, what’s the essence of brand strategy?
We’ll get to that shortly. First, let’s assume for the moment that you’ve made difficult choices and established a business strategy that truly sets you apart from your competition.
Now imagine your world five or ten years from now—a world in which your business (or nonprofit) is achieving its potential and making both you and your stakeholders very happy.
Focus on that all-important phrase “both you and your stakeholders.” That means you, your partners, your employees, and your customers, clients, or supporters. For all of you to be happy, all at the same time, you must be doing something quite special.
What’s that secret sauce?
Minimally, of course, whatever it is that you make or do must be prized. That is, your products or services must be widely recognized and appreciated for their utility, effectiveness, quality, innovations, or rarity. There’s much more to cultivating one’s brand, however, than gaining recognition and appreciation of your products or services.
Perhaps you’ve proven to be very honest and reliable over a long period of time—not only to those you serve (your customers, clients, or supporters), but also to those you lead or employ and those with whom you partner.
Maybe you’ve taken the time to routinely engage with your stakeholders over the years, asking them the right questions and listening very closely. (For more on this, see “Strategic leaders need brand insights.”)
Maybe you’ve made tough or surprising decisions along the way: taking a stand based on principles, or investing heavily to benefit your stakeholders or the broader community.
Perhaps you were very selective in your business relationships, or you made it clear through your actions that you’re driven by some unshakeable belief or purpose. And perhaps you did so at some risk, knowing that defining yourself (and your business or nonprofit) so sharply and clearly would inevitably alienate some customers, clients, or supporters.
If you can imagine such a future—in which both you and your stakeholders are proud to share in what you’ve accomplished, for all of the reasons above—you’re already developing a brand strategy.
Brand strategy is the process of choosing how to behave and communicate with the world at large in unique, memorable, and compelling ways that serve to continuously align the brand’s beliefs and offerings with the values and needs of its stakeholders.
Comparing the processes: brand vs business strategies
Not too surprisingly, some elements of business strategy have direct correlates in brand strategy. In both strategy processes, we must research and analyze the industry and competitors. And in both processes, we consider how best to position (and thereby compete) through differentiation.
As you might expect, the process and language tend to be a bit more formal and quantitative on the business side. For example, in the workup to business strategy, we would expect a focus on financial and performance metrics in a report of industry and competitor research. In the workup to brand strategy, we would focus instead on characterizing the industry and competitors in more qualitative terms, such as messaging, visibility, awareness, and engagement.
Similarly, the competitive analysis required for business strategy would deal with value chains, market share, and growth forecasts, while the competitive analysis required for brand strategy would lean into customer perceptions and needs.
How brand and business strategists interact
In an ideal situation, a leader seeking to build their organization’s brand has marshaled at least some of the research and analyses required for formulating a business strategy. The availability of in-depth business data and insights about an organization’s industry, customers, and competition is of tremendous value to a brand strategist.
It might surprise some business leaders, however, that a good brand strategist will also look well beyond existing business data. For example, firms like ours conduct independent brand research and offer insights that can help a leader refine an existing business strategy or, if necessary, formulate core elements of a business strategy if one doesn’t already exist.
It’s always easier and more profitable to build a brand house on a solid, well-designed business foundation. If that foundation is incomplete, a good brand architect can help a business leader begin to fill the gaps where necessary and fortify the brand from the bottom to the top.
The best leaders recognize that fostering a symbiotic partnership between business and brand strategists—with routine check-ins, collaboration, and consideration of potential tune-ups—offers the greatest long-term benefits to both the business’s bottom line and their brand’s future.
