Business Strategy, Brand Strategy & Marketing Strategy
We’ve built entire companies around the illusion that business strategy, brand strategy, and marketing strategy are different disciplines.
PROLOGUE
I sat dejected in my car after a gruelling 4.5-hour presentation to the CEO of one of the largest public-listed companies in Malaysia. Every single page of the presentation was picked apart, recommendation challenged, word choice scrutinized.
The deafening sound of rain hitting the rooftop of my Subaru didn’t come close to drowning out the endless loop of the day’s concluding words playing in my mind.
“This was not what we expected from the first ever external consultant we have hired to advise us on marketing strategy.”
If you’re interested in what happened at the end, scroll all the way down to the epilogue!
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THE PURPOSE QUESTION: SHAREHOLDER VS STAKEHOLDER
Before moving on to discuss strategy, I find it imperative that the universal purpose of a company is defined clearly.
The Friedman doctrine, also known as shareholder theory, was introduced by economist, Milton Friedman. In his 1970 essay to the New York Times, he argued that a company has no social responsibility to the public or society and that its sole responsibility is to increase its profits for the benefit of its shareholders.
Over a decade later, R. Edward Freeman, the father of stakeholder theory, in his 1984 book Strategic Management: A Stakeholder Approach argued that companies should consider and create value for all stakeholders, including customers, employees, suppliers, and the community, not just shareholders.
I appreciate the intent of imbuing business ethics, social responsibility, beliefs and values into organizational management, but I do not consider it relevant.
Value creation matters.
But who should companies focus on when creating value?
"Everyone" is a cop-out answer.
I propose that the core purpose of any company is to create value for the owners, its employees, and its customers. Other stakeholders are secondary.
Note 1: This model of thinking considers the inclusion of ethically ambiguous companies and monopolies. It leans further towards the what-is rather than the what-should.
Note 2: Value creation is amoral and perceived value (as opposed to real value) for each party: owner, employee, and customer, is sufficient for this model.
Note 3: Any focus on values, morality or responsibility towards other stakeholders like suppliers and the community should be considered strategic and independent choices outside of this model i.e. will not hold true for every company that exists.
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BUSINESS STRATEGY = BRAND STRATEGY = MARKETING STRATEGY
I consider business strategy a matter of growth, brand strategy a matter of identity, and marketing strategy the weaponization of brand to achieve growth. A simple albeit reductive example is how Starbucks profits through real estate instead of coffee, builds its identity as the ‘Third Space’ for the community, and draws the crowd in with seasonal favourites like Pumpkin Spice Latte.
While outlining the differences as above makes each discipline simpler to process for casual onlookers and clearly delineates the boundaries for internal company teams to operate, there is a simple challenge with such reductive definitions.
That challenge is Coherence.
How do companies ensure that all three strategies work towards a singular, coherent goal?
To dive further, we should first get some context as to how strategy, business strategy, as well as brand and marketing strategy started.
The word ‘Strategy’ originates from the ancient Greek word strategos, meaning the ‘general of the army’. Both military and early forms of business strategy had a clear focus on dealing with the competition. Strategy retreats today love featuring ‘war games’ in the agenda and Sun Tzu’s The Art of War is still featured today as one of the top books in the Business category.
Michael Porter, the father of modern strategy, defined generic competitive strategies based on two simple approaches: Cost (commonly the business strategists’ obsession) & Differentiation (commonly the marketing strategists’ obsession). This probably encouraged business strategists to start peeking over to their ‘frivolous’ cousins in the marketing department and taking them seriously.
Roger Martin, co-author of Playing To Win, in 2021, went on record to say that it’s time to accept that marketing and (business) strategy are one discipline. Martin agrees that strategy started off as a discipline that only concerned itself with the interaction between a company and its competitors. He also offered that marketing, on the other hand, concerned itself primarily with the interaction between a company and its customers.
It's probably also worth noting here that Peter Drucker, father of modern management, considers that the ultimate purpose of a business is to create and keep a customer. Marketers would approve.
Here’s the intriguing thing:
When a marketer does a good job, there is nothing left for a strategist to do.
When a strategist does a good job, there is nothing left for a marketer to do.
The worst possible outcome is to have a marketing plan and a strategic plan that are inconsistent. -Roger Martin
Now, enter brand.
David Aaker is commonly called the father of modern brand strategy. His work on brand equity built a bridge for brand practitioners to cross over from the realm of visual and verbal identity alone to influence business strategy. The idea that brand can be a competitive strategy for companies had to be built upon the acceptance of brand equity as something tangible.
Today, brand strategy has evolved in such a way where it has also begun to encroach upon the territory of HR practitioners. Internal culture conversations today are brand driven. This is natural because if the employees of a company do not exemplify what the brand stands for, all the promises will be hollow. This closes the loop for me on the 3 most important actors that play a role in the company’s ultimate purpose.
Wherever you’d argue the starting point and difference is for business, brand, or marketing strategy, the end points all seem to converge.
If business strategy looks at competitors,
while marketing strategy looks at customers,
brand strategy encourages you, among other things, to also look at your internal brand i.e. employees.
And that, in my humblest of opinions, is the complete loop we need.
If the core purpose of any company is to create value for the owners, its employees, and its customers,
Then business, brand, and marketing strategy should converge and be coherent.
BUSINESS STRATEGY = BRAND STRATEGY = MARKETING STRATEGY
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EPILOGUE
As I steeled myself and went into the CEO’s meeting room a month later, I went in with some clear and new insight into both the work I was delivering and into my own shortcomings as a self-professed Strategist.
The project was labelled as ‘Marketing Strategy’.
My narrow definition of Marketing Strategy was effectively blinding me from the real problem to be solved.
What this CEO of a multibillion-dollar company needed was not ‘Marketing Strategy’.
This CEO needed a winning STRATEGY.
Plain and simple.
This second meeting also lasted 4 hours. But this time, the tone was different.
4 hours was spent because I offered a new perspective and strategy that everyone in the room, with 30 years of experience in the industry, never once considered.
4 hours of excitement; Giddy with the possibility that this might be the game-changing move they needed.
4 hours because I finally understood that Business, Brand, & Marketing Strategy are one and the same.
P/S. In hindsight, the fact that the CEO spent half his day with me the first time around was a hint that everyone was on the same page. We weren’t there to pull wool over each other eyes. We were there to steer the company through treacherous waters. And for that opportunity, I am truly grateful.
P/P/S. Have you ever stepped on another department's strategists' toes?