Tag Archives: Strategy

Bugatti and TIDAL Audio – the brand partnership done right

Bugatti’s expansion beyond automobiles requires preserving its core values. Successful partnerships, like the one with TIDAL Audio, set new benchmarks in luxury and performance, offering customers unprecedented quality and exclusivity.

 

Founded in 1909 by the renowned Italian-born French automobile designer Ettore Bugatti, the Bugatti brand has a famous history of crafting the world’s most exclusive and sought-after performance automobiles.

Over a century later, Bugatti is embarking on an exciting journey to expand beyond automobiles and venture into new product categories, including residences, watches, and audio. Diversifying a brand into new territories is never easy. Typically, brand owners may assume that the reputation they’ve built in one domain will naturally translate into success in others. However, this assumption couldn’t be further from the truth.

Every product category has its own established leaders, benchmark products, and unique customer bases. To make a mark in multiple categories, a brand’s core essence must be deeply understood by a broad range of consumers. Apple serves as a prime example, where innovation and style of their products consistently redefine categories, from the original iPod in music players to the iPhone as first touch smartphone and now into spatial computing with VisionPro.

 

Preserving Bugatti’s core essence in brand expansion

The Bugatti brand is synonymous with its core values of unparalleled luxury, performance, and exclusivity. These are not just principles but are deeply embedded in each Bugatti automobile. When venturing into new categories, this same core essence must be seamlessly carried forward. Any deviation risks compromising the brand’s image, as customers of incomparable products or experiences expect nothing less of everything carrying the brand name. Growing the Bugatti brand equity will be the result of reinforcing the brand’s core in behavior, communication, and products. This disciplined approach will also help determine which categories are suitable for Bugatti’s expansion. It becomes evident why products like water bottles, eyewear, or clothing that could possibly marked as merchandising accessories should be excluded from consideration, while timeless products and experiences in domains such as residences and audio can naturally align with Bugatti’s essence.

Expanding Bugatti into a new category and maintaining alignment with the brand-core from the outset is a major challenge. Crafting luxury and performance objects of this level usually takes decades of perfection. Therefore, extending the Bugatti brand beyond automobiles calls for strategic partners upholding the same rigorous standards and values in everything the partner does, as anything less could adversely affect the image of Bugatti and that of the partner.

The mindset of delivering the incomparable brand experience must be embodied in everyone working at Bugatti and its partners. Just adding the Bugatti logo on a product and charging more does not authentically make it a Bugatti product. In fact, the strategy of “logo plastering” is likely to have a negatively impact the reputation of the brands involved. The long-term effects of off-brand experiences don’t outweigh the short-term speed in go to market and financial gains.

An illustrative example is a recent case where a(nother famous audio) manufacturer thought to justify a 65% price hike by simply adding red paint and a little black horse to an existing product, without delivering any real benefit for the buyer. Speaking of pricing, the brand Bugatti would never associate itself with “our offers” and “best prices”- that is why you will not find this on e.g. their automobile pages. Bugatti should therefore insist that its partners never feature “offers” and “best prices” on pages associated with the Bugatti brand. The value of incomparable cannot be summed up with a simple price tag.

 

Entering the world of audio with TIDAL for Bugatti

The collaboration with TIDAL Audio is an exemplary illustration of how to execute a brand partnership successfully. TIDAL Audio is renowned for its loudspeakers and electronics, recognized as “the best-looking, best-built, best-sounding” in the industry. Founded in 1999 by Jörn Janczak, the company was driven by the unwavering ambition to redefine sound quality. The essence of Bugatti, as articulated by Ettore Bugatti himself – “if comparable, it is no longer Bugatti” – mirrors the core philosophy of TIDAL Audio. Both brands share a dedication to setting benchmarks in luxury and performance, and they succeeded in achieving this ambitious goal.

The “TIDAL for Bugatti” range has elevated audio performance and luxury to unprecedented heights. The ROYALE loudspeakers embody the spirit and idea of offering second to none technologies, execution and performance not done before and according to the experts in the audio industry setting the new benchmark.

This brand partnership is truly the blueprint for successful collaborations. And when a partnership is done right the benefits are mutual. Bugatti makes its mark in the world of ultra-high-end audio, redefining the category according to industry press and reviews, while TIDAL Audio enters the world of ultra-luxury lifestyle.

Ultimately, customers seeking incomparable luxury, performance, and exclusivity emerge as the ultimate winners in this extraordinary collaboration, reaffirming both brands’ commitment to being truly unmatched.

 

Categories come and go… and with AI faster and more impactful than before

Like everything else, nothing remains the same forever. New categories are born, evolve, and eventually fade away. Every change in a category has an impact on the brands within it. In today’s AI-driven world, category changes are happening at a rapid pace. Are you prepared for a brand repositioning?

Category division

When categories split, the mindshare is distributed among subcategories. For instance, when the family car category split into hatchbacks, sedans, family SUVs, and family 4×4, the mindshare of brands spread across these new subcategories. Some subcategories may only appeal to car enthusiasts.

At times, categories become irrelevant. The phone category transitioned from analog cabled phones to mobile phones and finally to today’s smartphones. In each step, we witnessed a new leader emerge. Motorola, renowned for its analog cordless phones, introduced the StarTAC clamshell mobile phone in 1996. The StarTAC achieved massive success in the USA and featured in numerous Hollywood movies. However, it was Nokia that became globally synonymous with mobile phones. Nokia evolved the category by incorporating computer-like functions such as an address book, calendar, notes, and simple games.

New categories, new leaders

Nokia was the first to launch smartphones, although they still had keys and resembled traditional mobile phones. In 2007, Apple revolutionized the category with the launch of the iPhone, featuring a touch interface that marked a clear break from the mobile phone category. The iPhone kickstarted the modern smartphone category we know today, causing Nokia’s global dominance to fade away. Presently, the smartphone category hosts numerous brands like Huawei, Oppo, Xiaomi, and Nokia, but it remains primarily dominated by Apple and Samsung.

Evolution of the phone category

 

In the phone category, the leading brand was able to evolve into the next category but never retained its leadership position. This pattern is not unique to phones but applies to nearly any evolving category.

AI accelerates category changes

Today, any category that can be AI-powered will undergo transformation. The keyword to watch out for is Smart: smart cars, smart watches, smart photo editing, smart ordering systems, and more.

When the leap from the current product or services to the smart counterparts is perceived as significant, it opens the door for a complete category shakeup, often accompanied by the emergence of new brands. We have witnessed this in the phone industry (Nokia to Apple) and the automotive industry, where underlying technological changes have been emphasized (leading to Tesla/Polestar). Similar “smart” shakeups will occur in many categories we currently take for granted, ranging from healthcare devices to photo editing software and customer support solutions.

For brands to survive within categories heavily affected by AI (which includes almost every category!), it is crucial to manage the category and brand association effectively and navigate the perceptual change of the brand in relation to the category’s evolution.

In my book Win With What I provide numerous methods and tools to help brands stay on the growth path or regain their position in a changing landscape.



This article is from the book Win With What – the first category-led growth book for anyone who wants their business to thrive and survive.

Get your preview at WinWithWhat.com

 

Start With Why to Win With What

When publishing a book with the title “Win With What – How Smart Companies Thrive and Survive” it is only natural to compare to the well-known book “Start With Why – how great leaders inspire anyone to take action” by Simon Sinek. In this post I explain why both approaches are needed in any successful business: you start with why to win with what.  

Start With Why

Sinek’s core idea is that by taking an inside-out approach, a company is much more effective in reaching its goals because employees are rallied around a shared belief. To inspire people to take action starts by giving a reason, the Why, and this is the reason the Why is at the core of the Golden Circle.

The Golden Circle (Simon Sinek)

 

A purposeful Why helps flow energy in the same direction – from How a company works, behaves, communicates and decides, to What is sold in terms of products and services.

Win With What

Without knowing the What, people will never experience the How or understand the Why. That is why the What is the outside layer of Sinek’s Golden Circle. Before getting interested, building desire, or making a purchase we must first know What the company, brand or product is.

When purchasing products or services, buyers take an outside-in or category-led approach.

Win With What advocates category-led growth because with a clearly defined What anyone can find, buy and promote a brand.

 



This article is from the book Win With What – the first category-led growth book for anyone who wants their business to thrive and survive.

Get your preview at WinWithWhat.com

 

Happy Socks is going slowly back to just selling Socks

Happy Socks is going back to its core of selling socks. The website is restructured around Socks. The Happy Socks Underwear is gone.

The brand’s core idea, to bring happiness and color to every corner of the world, can be replicated to other categories as well – but in the case of Happy Socks, the brand name will forever be limiting. 

Back in 2018, I wrote a post discussing the brand stretch of Happy Socks into underwear, swimming gear, and much more. I did not see a future for Happy Socks Underwear, Happy Socks Swimsuits, or Happy Socks Pool Sliders.  Strategically I saw two options for the Happy Socks company:

  1. Stick with the category of socks – and take more market share
  2. Bring the other products under a different brand

It seems that Happy Socks company is moving into the direction of option 1. The website is reworked, and the homepage has a clear focus on Socks.

 

The web menu makes the distinction even more clear. It is all about Socks and Not Socks.

The Not Socks section cover face masks and swimming gear. By positioning the products clearly as “Not Socks” it feels these products are more like accessories, not part of the brand’s core. This positioning gives Happy Socks Company more freedom to make changes to the portfolio. For example, if a line does not work, the company can easily replace it without hurting the core Socks offering. Of course, it is still weird to walk around in Happy Socks Swim shorts.

But how did the company get here?

Happy Socks got famous for its colorful socks. When the company was founded in 2008, most of the socks in the market were plain. The founders decided to change that and bring more color and design to our feet. Something remarkable happened: they made a boring accessory item (socks) into a hip fashion statement and succeeded.

The mix of focus on colorful socks, decent quality, and a brand name that boozes energy in a boring category worked well. Happy Socks are truly happy compared to traditional socks.
In 2017 the company sold most of the shares to a private equity firm – usually one of the warning signs that growth needs to be accelerated. The shareholders must have been thinking: the company knows about color and design, there are contracts with factories that can produce socks. Why not do some clothing? Happy Socks quickly expanded the product portfolio to underwear and swimwear.

Today the company seems to be getting more and more back to its core: socks. By positioning everything else as “Not Socks” it allows for freedom to experiment with the portfolio – without hurting the core.

ZOOM the company that delivers happiness

Some of my readers know that I am busy with a brand new book. At this stage, most of the book is written, but I continue my research. One of the companies I recently looked at was  ZOOM and specifically the About ZOOM web pages. My aim: to figure out what ZOOM stands for both inside and outside the company.

It was honestly a shock to read the content that defines ZOOM. In short: the About ZOOM page is a collection of empty and not differentiating brand & strategy blurbs. 

Let’s take a look at each of the elements of the About page:

#1. What is the Promise of ZOOM?ZOOM delivers happiness, every single day.

Yes, you are reading this right. Think about that the next time you are in a ZOOM call or get communications from ZOOM.

 

#2. What is the ZOOM culture?

To deliver on the ZOOM promise of Delivering Happiness, the company simply defined its culture as Delivering happiness – how thoughtful, differentiating and unique..

 

#3. How is the promise of ZOOM delivered?

Through one value: Care. Whatever ZOOM employees do for Community, Customers, Company, Teammates, and Selves: they Care.

I am not sure how just “Care” can be differentiating. Values should give clear guidance, like a compass, how decisions are made, actions are performed, and how employees communicate internally and externally. The company values should be so strong and unique to the company that users experience them every single time  when interacting with the brand.

So, what is ZOOM all about?

By now, you might be thinking, is ZOOM a new-age type of Happiness company, with dedicated employees delivering Happiness every day, and who are delivering this amazing Promise in a caring way.

Now, just hang on for a minute because the ZOOM Mission and Vision turn it all in a different direction.

 

#4 The Mission and Vision of ZOOM

The Mission and Vision seem an afterthought or leftover from previous strategy work.

The keywords of the previous sections Delivering Happiness and Care are replaced by Frictionless, Secure, Empowering, and  Accomplishing more.

Do you feel the difference? It is huge – when employees are focused on, e.g., empowering and accomplishing more, they are in a very different state of mind than when they Care or Deliver Happiness.

On the Mission and the Security element specifically: during the initial part of the Corona crisis, ZOOM got hit with severe security flaws, and even today, there are still privacy and security woes. Tom’s Guide keeps an up-to-date list here

 

#5 About ZOOM

The website continues with a small section, “About ZOOM” which again steers the company’s core into a different direction. In this section, ZOOM is there to help you express ideas, connect to others, and build toward a future limited only by your imagination.

 

Simple suggestions for improvement 

What is wrong with all of this with the stock-listed company ZOOMPretty much everything!

Let’s clarify the ZOOM brand in a straightforward way with just a few steps. 

#1 Firmly claim a position
It is vital to claim a position – only by doing so can people know precisely the difference between your brand and others in terms of what it concretely is and does.

Using ZOOM own words:
– ZOOM, the only frictionless video conferencing app
– ZOOM, the innovation standard in video conferencing

#2 Define the company character
What type of company is ZOOM? How do people work, decide and take action? This is not what we want the company to be, but what the culture is all about. Based on the direction given by ZOOM, I use the Caregiver character as an example. The Caregiver’s strategy is to do things for others, intending to help others. Compassion and Generosity are essential.

#3 Define brand values that steer 
Taking the Company Character and Care concept, we can define strong values, such as Thoughtful, Humane, Compassionate. These are all adjectives and are easy to use to steer activities. I can, for example, say, “this copy text feels thoughtful, humane, and compassionate. It is on ZOOM brand.” The values are also not the opposite or conflicting, which makes assessing actions focussed.

#4 Define the Belief
The Belief is rooted in the Company’s Character. As a belief, it is shared among all employees and is the foundation to deliver every single day the promise.
For example: At ZOOM we believe that the greatest, most sustainable happiness comes from making others happy.

#4 Define the promise
The Promise is also routed in the Company Character and delivered by employees to each other and external.
For example: At ZOOM we promise is to be good and do good

 

Summing at all up

The brand can be summed up in a few lines. While I did not include a mission or vision it feels more coherent in steering the brand in actions, decisions, products, and communications.

  • ZOOM is the only frictionless video conferencing app
  • Audience:  Community, Customers, Companies, Teammates, and Selves
  • Promise to each other and customers: to be good and do good
  • The promise is delivered through the values: Thoughtful, Humane, Compassionate
  • And ZOOM can make it happen because it firmly beliefs that the greatest, most sustainable happiness comes from making others happy.

 

Photo by Arjohn Janroe Queral on Unsplash