Some of the most iconic names in business have recently been sold. Kellogg’s, Allbirds, and Pizza Hut all changed hands. Their new owners believe they can revive these struggling brands. But what caused these household names to fall so far? The answer lies in four critical failures that lock out a brand’s ability to recover and grow.
Jack Welch, the legendary CEO of General Electric, famously believed your business must be number one or number two in its market. If it is not, you should get out. This wisdom came from the PIMS study, which began in the 1960s. PIMS stands for Profit Impact of Marketing Strategy. It focused on what drives economic success. The research found that higher relative market share leads to economies of scale, lower unit costs, and stronger supplier relationships. Being the third brand puts you at a serious disadvantage.
Brand owners may not know PIMS by name. But they know the struggle of trying to move up from the bottom. The brands that got sold recently share one thing in common. They fell victim to tendencies that always lead to trouble. Losing relevance, ignoring the changing world, lacking a real plan to win, and clinging to past successes are just some of these tendencies. These are symptoms of four deeper corporate failures.
Leadership Failure Puts Everything at Risk
Brands stay healthy when leadership sees ahead and creates a winning plan. Great leaders keep innovating and stay relevant. They stay in touch with customers and love their core products. When leadership relies on past success and becomes complacent, the brand suffers. When leaders focus on new products at the expense of core ones, or degrade quality to cut costs, the brand suffers.
Think about leaders like Lou Gerstner at IBM or Carlos Ghosn at Nissan. They led dramatic turnarounds. But even successful leaders must watch for the next change. Steve Kaufman at Arrow Electronics realized the industry was at a tipping point. He reinvented the company before it was in trouble. His changes turned a multi-million-dollar business into a multi-billion-dollar one. Great leaders are authoritative, credible, responsible, and trustworthy. They inspire and educate. If boards focus only on short-term profits, the brand and culture will eventually suffer.
Organization Must Be Built Around the Customer
Is your company organized around the customer and the brand? Or is the silo mentality winning? Bureaucratic processes can get in the way of effective brand management. Employees need to know their roles in brand building. They need to know what to do differently to act on the brand’s behalf. An organization that is siloed, bureaucratic, or closed to creativity hurts brand development.
Campbell Soup was once a company of canning engineers. Employees were not encouraged to have original thoughts. Everything was run according to a thick manual of procedures. Nothing changed until a new CEO took over. His focus on internal organization was earth-shattering for the company. When companies reorganize, they often just shuffle people around. They do not address the underlying cultural defects. The strategic vision must come first. Then you decide the best organization to achieve that vision.
Culture Can Make or Break Your Brand
Your company’s culture reflects its achievements and its people. Research shows a direct link between culture and employee behavior. A culture focused on month-to-month results is risk-averse. A tough, conservative, rigid culture is not good for creativity or brand development. The brand’s values must be reflected in the culture’s values. When culture and strategy conflict, culture always wins. They must reinforce one another.
Imagine working at a company where even the way you present slides is rigidly controlled. That is what happened to some consultants working with IBM. The culture was so strict it stifled creativity. If your culture emphasizes short-termism and arrogance, your brand will lose touch with a changing world. This is exactly what happened to Kellogg’s. They spent decades struggling with shifting breakfast trends. People bought into the benefits of breakfast but stopped at McDonald’s on their way to work. Kellogg’s failed to adapt its culture to new realities.
Knowledge Is Power Only If It Is Shared
Leadership, organization, and culture all relate to knowledge. Many brand failures reflect a lack of knowledge or a lack of desire for knowledge. You must be a learning culture. When a culture stops learning, brands lose relevance and creativity. Brands suffer when information is hoarded, not turned into quality knowledge, or not shared globally.
At one hotel group, there were around 40 separate studies on breakfast. They were all redundant. Yet no one shared the information. The money spent on those studies could have been used for actionable strategies. Companies that cut back on insightful information lock out any chance of gaining the knowledge needed to stay relevant. Great leadership ensures knowledge becomes the key to enduring profitable growth.
Allbirds could not understand that environmentalism is not always the main driver in a purchase. They started copying other brands, which upset their core customers. Pizza Hut left its strong brand promise behind and sold on price for years. Only recently have some locations succeeded by revisiting the original in-store experience. Kraft Heinz brands were mismanaged for years. New leadership decided to fix the brands rather than sell them. Brands can only live forever if they are properly managed.
If you want to avoid these pitfalls, you need a clear strategy. This is where understanding digital marketing and building a strong online presence becomes critical. Learning how to use these tools effectively can be the difference between a thriving brand and one that is sold off. Our Affiliate Marketing course can show you how to build and promote brands online. We also provide website design, search engine optimization, and digital marketing services with the famous trainer Nehme Sbeiti. These services can help you create a culture of learning and adapt to a changing world.
The brands that survive and thrive are the ones that break the lock on leadership, organization, culture, and knowledge. They learn, adapt, and stay relevant. The future belongs to those who see the signs early and take action.
