One of the most misused terms in business lexicon is strategy. Top executives, managers, consultants, the media and other observers tend to use the term to describe often contradicting and conflicting activities, outcomes and processes.
Since all companies across industries and countries compete with each other to attract customers, generate profit and ultimately enhance shareholder value, devising competitive corporate strategies becomes extremely important.
But an essential first step in that direction is to clearly understand what strategy is and who the important players are in devising successful strategies.
Strategies are inherently contextual and multidimensional. Essentially, strategy refers to the many intentional acts of companies in order to combine their resources and skills in a unique manner so that they can be profitable and well-positioned in the market. It also helps companies achieve a sustainable competitive advantage by differentiating themselves from their competitors.
Since strategy comprises a comprehensive set of activities, its complexity, centrality and importance differs across three different levels: functional, business and corporate.
In the context of global brands, the focus usually tends to be on corporate-level strategies, which are designed to help a firm develop, nurture and defend its corporate brand.
Corporate strategies primarily include functions of corporate scope and scale. As such, global brands’ corporate strategies also tend to be geared toward brand growth, brand consolidation and maintaining the brand’s position as a market leader.
Although these activities are central to any global brand’s success, only a handful of companies are actually successful in competently managing these strategic corporate activities.
One can argue that, given the new role of marketing as a guiding force of corporate strategies, successful brands are those that have a devoted top-level executive who can properly represent and sell marketing and branding activities in the boardroom.
A company’s success in effectively formulating and implementing corporate brand strategies depends on its chief marketing officer. He or she must be able to help the firm craft and execute effective brand strategies.
With the dominance of services in the global economy, brands have emerged as the most valuable corporate asset. As such, companies around the world are striving to build powerful brands that resonate with customers.
Given the importance of brand equity, companies have begun to include brand strategies in their corporate plans.
As marketing and branding become more central to the bottom line and more intertwined, marketing as a discipline has transformed from a standard company function to the heart of strategy.
Pursuing growth as a corporate objective requires an excellent command over internal recourse capabilities and the relative positioning of the company vis-a-vis its competitors in the market or industry.
CMOs are uniquely positioned to perform this role because their post in the company allows them to integrate resource positions. Their market knowledge would also give them a better assessment of the company’s positioning, relative to others.
One the most challenging decisions in crafting corporate-level strategy is achieving a beneficial level of consolidation, which can take multiple forms, depending on the nature of the company and industry, as well as other factors like divestiture, spin-offs, vertical integration and horizontal integration. Companies must reassess their portfolio to identify risk factors that could kill the brand or evaluate whether a brand should be “killed” in order to be retooled.
Just like companies grow their brands by establishing relationships with customers and partners, killing a brand without jeopardizing these relationships would be difficult.
Again, CMOs are well equipped for such consolidations because not only do they have a competitive advantage over other executives in terms of knowledge of external collaborators, they also have a comprehensive understanding of the relative contributions of any given brand in the context of the overall brand portfolio.
Certain brands are so iconic and established that they need mere maintenance. That is, such brands just require the allocation of more resources to maintain their position in the market, rather than going for aggressive growth or strategic pruning.
Although such moves may not involve investments in direct aspects of the brand, they certainly involve nurturing the other stakeholders such as the media, regulators, external collaborators and customers.
Most CMOs are directly or indirectly involved in interactions with all of these stakeholders from the early stages of the company’s operations. As such, CMOs would be very essential for an effective managing of global brands, especially in the context of constant innovation and immense competition.
It should now be apparent that although corporate strategy activities are crucial for a company’s success, not all firms are adept at formulating and implementing such activities. Usually, this problem is due to the absence of an effective CMO.
As I have argued, good marketing officers are essential to the drafting and implementation of successful corporate strategies that will help companies attract customers and gain hefty profits.
Martin Roll is a global business and brand strategist. Web site: http://www.martinroll.com.