Success Elements

First, a basic factor, which needs to be established is the financial strength and security of a company. The essential precondition for exploring new market opportunities is the economic advantage, which enables the possibility of expanding and looking beyond a company’s core competencies. Economic means are a vital necessity if a company seeks to utilize and implement new tools within the business models already employed or to develop and implement new business models. Given that these means are not accessible, it prevents the option of actually being able to perform the desired changes and thereby differ from the competitors in the particular business segment. However, if these are settled many options are available and the company is therefore more prone to taking chances (Representative, CSI).

Strong internal communication also contributes with information flowing more freely, which secures that all employees are aware of all new business models being implemented (Representative, Sonic Branding). Furthermore, if the company follows an open communication channel employees feel more inclined to contribute with potential value adding knowledge and ideas that could lead to strengthening the company. These assets are indispensable for the company and can clearly be defined as a company’s internal intangible capabilities and resources, thereby a competitive advantage. However, if poor communication is present the quite opposite will occur and valuable knowledge may be lost. Therefore, the essentiality of maintaining an open communication has to be highlighted.

IDEO, the global design consultancy, works towards utilizing the strengths of its employees to the greatest extent in every manner possible in order for every idea to be tested. This both spurs the desire to contribute with and generate innovative thinking and in this connection reaches much better results in every case due to the extent of the involvement of the employees. Much emphasis is therefore put on harnessing the strengths employees retain and illustrated in their work.²⁸

When representing strong brands with clear and strong identities an obvious advantage is the recognizability, which follows. Furthermore, when a company is in possession of a strong brand a general perception is that a strong company culture is reflected. What is also generated is a loyal customer base, which adds to steady revenue sources. The company also enjoys the power of ‘word-of-mouth’, which is largely free marketing and promotion and this secures the company’s freedom to experiment within other segments and ultimately can ensure the survival of the company.

The amusement park Tivoli, situated in the center of Copenhagen, is a great example portraying the outcome of being a strong brand internally as well as externally. Taking the size of the company and the number of employees into consideration it is worth paying attention to the fact that Tivoli has been placed in the top 10 best work places in Denmark and top 15 in Europe.²⁹ Furthermore, each year the park has several million visitors, which indicates a strong loyal customer base and extensive effect of ‘word-of-mouth’.

28 IDEO, http://www.ideo.com/work/, retrieved October 19, 2011.

29 Tivoli Virksomheden, http://www.tivoli.dk/composite-9377.htm, Retrieved October 19, 2011.

Conversely, if the brand is new, general recognizability is low. Furthermore, a brand can be weak if the perception of the brand is not correct compared to what the company wishes to convey the brand being outdated. Moreover, a brand may have turned weak if a series of events occur, thereby damaging credibility and in this connection can be mentioned Nike and the case of the company using child labor for production.³⁰ In such cases, many resources are required to lift the brand.

Another factor that can influence the strength of a brand to great extent is the product line of a company. Two aspects to the strength of a product line can be mentioned. A brand can have a small but strong product line or find its strength in the breadth of its product range. The composition of the product line depends on which market the company is operating in and what needs are viewed as necessary to accommodate. UMD is a great example to reflect upon due to its vast product range at its disposal such as its broad artist catalogue and its ability to perform several functions e.g. managing and promoting artists. UMD further retains a B2B segment providing it with great market opportunities, which can be drawn upon and thus widen its market scope. Regarding the aspect of adding value to a brand importance of attaining uniqueness lies greatly in the ability to enhance features specific to this particular brand. If this is not possible, competitors will most likely catch up with or exceed the company, thus deprive it from its advantageous position.

If a company has access to various distribution channels and is versatile largely in terms of retaining the ability to perform many processes in-house, the company could then appear attractive for potential collaborative partners. If collaboration is complex due to high costs and low frequency, it is favorable to maintain processes in-house in order to minimize costs.

UMD illustrates this attractiveness ascribing to the company both residing over capacity to perform, more or less, all projects in-house and due to its strong international support and expertise UMD can draw upon.

An obvious negative result from lack of competitiveness could potentially lead to loss of market share, decreasing sales, increased brand rejection, and decreasing customer loyalty.

The inability to differentiate oneself from one’s competitors could further be a consequence.

In a market dominated by numerous substitutable products, it becomes vital to master the       

30 The Independent, http://www.independent.co.uk/news/world/americas/nike-admits-to-mistakes-over-child-labour-631975.html, retrieved on September 29, 2011.  

ability of differentiation as it can be assumed that customer loyalty is difficult to gain. The downfall of TV2 Radio is an example of how badly business can develop if the competitive capabilities are not sufficiently utilized. The radio station had all means provided for success, such as famous hosts, financial support from the TV station TV2, as well as a national broadcast license. Not much longer than a year of broadcasting the station was closed down and sold to SBS due to it not prevailing upon capitalizing on what was provided.³¹

Through differentiation, a company can gain a strong market position, leading to maintain an increased customer loyalty yet also assume market share from competitors. If a company already has reached its maximum potential within the market it is already operating, meaning the market is saturated, the company is inclined to penetrate new markets and thus ensure competitiveness and growth. Incorporated in this is the strategic objective of reaching new segments, which can strengthen the company’s market position. Market penetration can prove quite difficult if a market appears saturated, unless an unknown need is suddenly introduced for the consumer or the mere ability for a company to offer a much better e.g. product than the already existing market players.

The iPod produced by Apple applies greatly to this scenario, reaches even further in that a superior product was introduced in an otherwise saturated market and created a need consumers did not consider having until design, and functionality became inseparable elements. We can look at the iPod and iTunes as an example of an industry changer, but more importantly is what defines Apple as a brand in general.³² Since the commercial media market is overloaded with the before mentioned ‘noise’ it has become increasingly difficult to accomplish the strategic objectives set forth by a company - consequently, companies must turn to unconventional methods.