BRAND EQUITY
is the value that customers and prospects perceive in a brand. It is measured based on how much trust a customer has in the brand. The value of a company's brand equity can be calculated by comparing the expected future revenue from the branded product with the expected future revenue from an equivalent non-branded product. The difference, usually profit, is how much customers trust the brand, and are willing to pay above and beyond the price for other competitive brands with lower value perceptions. This calculation is at best an approximation. This value can comprise both tangible, functional attributes (e.g. twice the cleaning power or half the fat) and intangible, emotional attributes (e.g. The brand for people with style and good taste).
COMPONENTS OF BRAND EQUITY
BRAND LOYALTY
BRAND AWARENESS
PERCEIVED QUALITY
BRAND ASSOCIATIONS
OTHER PROPRIETARY BRAND ASSETS



Positivity

Brand equity cannot be negative. Positive brand equity is created by effective marketing - advertising, PR and promotion in all forms, and the ability of the brand's performance to consistently maintain customer relationships -- trust.
The greater a company's brand equity, the greater the probability that the company will use a family branding strategy rather than an individual branding strategy. This is because family branding allows them to leverage the equity accumulated in the core brand.


Brand energy

is a concept that links together the ideas that the brand is experiential; that it is not just about the experiences of customers/potential customers but all stakeholders; and that businesses are essentially more about creating value through creating meaningful experiences than generating profit. Economic value comes from businesses’ transactions between people whether they be customers, employees, suppliers or other stakeholders. For such value to be created people first have to have positive associations with the business and/or its products and services and be energised to behave positively towards them—hence brand energy. It has been defined as "The energy that flows throughout the system that links businesses and all their stakeholders and which is manifested in the way these stakeholders think, feel and behave towards the business and its products or services."


Attitude Branding

Attitude branding is the choice to represent a feeling, which is not necessarily connected with the product or consumption of the product at all. Marketing labeled as attitude branding includes that of Nike, Starbucks, The Body Shop, Safeway, and Apple Inc.
"A great brand raises the bar – it adds a greater sense of purpose to the experience, whether it's the challenge to do your best in sports and fitness, or the affirmation that the cup of coffee you're drinking really matters." — Howard Schultz (CEO, Starbucks Corp.)


Brand monopoly

In economic terms the "brand" is a device to create a monopoly—or at least some form of "imperfect competition"—so that the brand owner can obtain some of the benefits which accrue to a monopoly, particularly those related to decreased price competition. In this context, most "branding" is established by promotional means. There is also a legal dimension, for it is essential that the brand names and trademarks are protected by all means available. The monopoly may also be extended, or even created, by patent, copyright, trade secret (e.g. secret recipe), and other sui generis intellectual property regimes (e.g.: Plant Varieties Act, Design Act).
In all these contexts, retailers' "own label" brands can be just as powerful. The "brand", whatever its derivation, is a very important investment for any organization. RHM (Rank Hovis McDougall), for example, have valued their international brands at anything up to twenty times their annual earnings. Often, especially in the industrial sector, it is just the company's name which is promoted (leading to one of the most powerful statements of "branding"; the saying, before the company's downgrading, "No-one ever got fired for buying IBM").


Brand extension

An existing strong brand name can be used as a vehicle for new or modified products; for example, many fashion and designer companies extended brands into fragrances, shoes and accessories, home textile, home decor, luggage, (sun-) glasses, furniture, hotels, etc. Mars extended its brand to ice cream, Caterpillar to shoes and watches, Michelin to a restaurant guide, Adidas and Puma to personal hygiene.
There is a difference between brand extension and line extension. When Coca-Cola launched "Diet Coke" and "Cherry Coke" they stayed within the originating product category: non-alcoholic carbonated beverages. Procter & Gamble (P&G) did likewise extending its strong lines (such as Fairy Soap) into neighboring products (Fairy Liquid and Fairy Automatic) within the same category, dish washing detergents.


Multiple brands

In a market fragmented with many brands, a supplier can choose to launch new brands apparently competing with its own, extant strong brand (and often with an identical product), simply to obtain a greater share of the market that would go to minor brands. The rationale is that having 3 out of 12 brands in such a market will give garner a greater, overall share than having 1 out of 10 (even if much of the share of these new brands is taken from the existing one). In its most extreme manifestation, a supplier pioneering a new market which it believes will be particularly attractive may choose immediately to launch a second brand in competition with its first, in order to pre-empt others entering the market.
Individual brand names naturally allow greater flexibility by permitting a variety of different products, of differing quality, to be sold without confusing the consumer's perception of what business the company is in or diluting higher quality products.
Once again, Procter & Gamble is a leading exponent of this philosophy, running as many as ten detergent brands in the US market. This also increases the total number of "facings" it receives on supermarket shelves. Sara Lee, on the other hand, uses it to keep the very different parts of the business separate—from Sara Lee cakes through Kiwi polishes to L'Eggs pantyhose. In the hotel business, Marriott uses the name Fairfield Inns for its budget chain (and Ramada uses Rodeway for its own cheaper hotels).
Cannibalization is a particular problem of a "multibrand" approach, in which the new brand takes business away from an established one which the organization also owns. This may be acceptable (indeed to be expected) if there is a net gain overall. Alternatively, it may be the price the organization is willing to pay for shifting its position in the market; the new product being one stage in this process.
Abercrombie & Fitch is a multi-brands company, rolling out Lifestyle Brands.


Small business brands

Some people argue that it is not possible to brand a small business. However, many small businesses have become very successful due to branding. For example, Starbucks used almost no advertising, yet over a period of ten years developed such a strong brand that the company expanded from one shop to hundreds.


Own (Private Label) brands and generics

With the emergence of strong retailers, the "own brand", the retailer's own branded product (or service), emerged as a major factor in the marketplace. Where the retailer has a particularly strong identity, such as, in the UK, Marks & Spencer in clothing, this "own brand" may be able to compete against even the strongest brand leaders, and may dominate those markets which are not otherwise strongly branded. There was a fear that such "own brands" might displace all other brands (as they have done in Marks & Spencer outlets), but the evidence is that—at least in supermarkets and department stores—consumers generally expect to see on display something over 50 per cent (and preferably over 60 per cent) of brands other than those of the retailer. Indeed, even the strongest own brands in the United Kingdom rarely achieve better than third place in the overall market. In the US, Target has "own" brands of "Market Pantry" and "Archer Farms" each with unique packaging and placement.
The strength of the retailers has, perhaps, been seen more in the pressure they have been able to exert on the owners of even the strongest brands (and in particular on the owners of the weaker third and fourth brands). Relationship marketing has been applied most often to meet the wishes of such large customers (and indeed has been demanded by them as recognition of their buying power). Some of the more active marketers have now also switched to 'category marketing'—in which they take into account all the needs of a retailer in a product category rather than more narrowly focusing on their own brand.
At the same time, generic (that is, effectively unbranded goods) have also emerged. These made a positive virtue of saving the cost of almost all marketing activities; emphasizing the lack of advertising and, especially, the plain packaging (which was, however, often simply a vehicle for a different kind of image). It would appear that the penetration of such generic products peaked in the early 1980s, and most consumers still seem to be looking for the qualities that the conventional brand provides.


Brand architecture

is the structure of brands within an organizational entity. It is the way in which the brands within a company’s portfolio are related to, and differentiated from, one another. The architecture should define the different leagues of branding within the organisation; how the corporate brand and sub-brands relate to and support each other; and how the sub-brands reflect or reinforce the core purpose of the corporate brand to which they belong.


Types of brand architecture

There are three generic relationships between a master brand and sub-brands:
• Monolithic brand or Branded house - Examples include Virgin Group, Red Cross or Oxford University. These brands use a single name across all their activities and this name is how they are known to all their stakeholders – consumers, employees, shareholders, partners, suppliers and other parties.
• Endorsed brands - Like Nestle’s KitKat, Sony PlayStation or Polo by Ralph Lauren. The endorsement of a parent brand should add credibility to the endorsed brand in the eyes of consumers. This strategy also allows companies who operate in many categories to differentiate their different product groups’ positioning.
• Product brand or House of brands - Like Procter & Gamble’s Pampers or Henkel’s Persil. The individual sub-brands are offered to consumers, and the parent brand gets little or no prominence. Other stakeholders, like shareholders or partners, know the company by its parent brand.


Brand extension or brand stretching

is a marketing strategy in which a firm marketing a product with a well-developed image uses the same brand name in a different product category. Organisations use this strategy to increase and leverage brand equity (definition: the net worth and long-term sustainability just from the renowned name). An example of a brand extension is Jello-gelatin creating Jello pudding pops. It increases awareness of the brand name and increases profitability from offerings in more than one product category.
A brand's "extendibility" depends on how strong consumer's associations are to the brand's values and goals. Ralph Lauren's Polo brand successfully extended from clothing to home furnishings such as bedding and towels. Both clothing and bedding are made of linen and fulfill a similar consumer function of comfort and homeliness. Arm & Hammer leveraged its brand equity from basic baking soda into the oral care and laundry care categories. By emphasizing its key attributes, the cleaning and deodorizing properties of its core product, Arm & Hammer was able to leverage those attributes into new categories with success. Another example is Virgin Group, which has extended its brand from from transportation (aeroplanes, trains) to games stores and video stores such a Virgin Megastores.


Product extensions

are versions of the same parent product that serve a segment of the target market and increase the variety of an offering. An example of a product extension is Coke vs. Diet Coke in same product category of soft drinks. This tactic is undertaken due to the brand loyalty and brand awareness they enjoy consumers are more likely to buy a new product that has a tried and trusted brand name on it. This means the market is catered for as they are receiving a product from a brand they trust and Coca Cola is catered for as they can increase their product portfolio and they have a larger hold over the market in which they are performing in.


Types of product extension

Brand extension research mainly focuses on the consumer evaluation of extension and attitude of the parent brand. Following the Aaker and Keller’s (1990) model, they provide a sufficient depth and breadth proposition to examine consumer behaviour and conceptual framework. They use three dimensions to measure the fit of extension. First of all, the “Complement” is that consumer takes two product (extension and parent brand product) classes as complement to satisfy their specific needs.Secondly, the “Substitute” indicates two products have same user situation and satisfy their same needs which means the products class is very similar so that can replace each other. At last, the “Transfer” is the relationship between extension product and manufacturer which “reflects the perceived ability of any firm operating in the first product class to make a product in the second class”.The first two measures focus on the consumer’s demand and the last one focuses on firm’s ability.
From the line extension to brand extension, however, there are many different way of extension such as "brand alliance",co-branding or “brand franchise extension”.Tauber (1988) suggests seven strategies to identify extension cases such as product with parent brand’s benefit, same product with different price or quality, etc. In his suggestion, it can be classified into two category of extension; extension of product-related association and non-product related association.Another form of brand extension, is a licensed brand extension. Where the brand-owner partners (sometimes with a competitor) who takes on the responsibility of manufacturer and sales of the new products, paying a royalty every time a product is sold.


Categorisation theory
Researchers tend to use “categorisation theory” as their fundamental theory to explore the links about the brand extension.When consumers face thousands of products, they not only initially confused and disorderly in mind, but also try to categorise the brand association or image with their existing memory. When two or more products exit in front of consumers, they might reposition memories to frame a brand image and concept toward new introduction. A consumer can judge or evaluate the extension by their category memory. They categorise new information into specific brand or product class label and store it. This process is not only related to consumer’s experience and knowledge, but also involvement and choice of brand. If the brand association is highly related to extension, consumer can perceive the fit among brand extension. Some studies suggest that consumer may ignore or overcome the dissonance from extension especially flagship product which means the low perceived of fit does not dilute the flagship’s equity.

INNOVATION is typically understood as the introduction of something new and useful, for example introducing new methods, techniques, or practices or new or altered products and services.

TYPES OF INNOVATION
Scholars have identified at a variety of classifications for types innovations. Here is an unordered ad-hoc list of examples:

Business model innovation
involves changing the way business is done in terms of capturing value .

Marketing innovation
is the development of new marketing methods with improvement in product design or packaging, product promotion or pricing.

Organizational innovation
involves the creation or alteration of business structures, practices, and models, and may therefore include process, marketing and business model innovation.

Process innovation
involves the implementation of a new or significantly improved production or delivery method.

Product innovation
involves the introduction of a new good or service that is new or substantially improved. This might include improvements in functional characteristics, technical abilities, ease of use, or any other dimension.

Service innovation
refers to service product innovation which might be, compared to goods product innovation or process innovation, relatively less involving technological advance but more interactive and information-intensive .

Supply chain innovation
where innovations occur in the sourcing of input products from suppliers and the delivery of output products to customers

Substantial innovation
introduces a different product or service within the same line, such as the movement of a candle company into marketing the electric lightbulb.

Financial innovation
through which new financial services and products are developed, by combining basic financial attributes (ownership, risk-sharing, liquidity, credit) in progressive innovative ways, as well as reactive exploration of borders and strength of tax law. Through a cycle of development, directive compliance is being sharpened on opportunities, so new financial services and products are continuously shaped and progressed to be adopted. The dynamic spectrum of financial innovation, where business processes, services and products are adapted and improved so new valuable chains emerge, therefore may be seen to involve most of the above mentioned types of innovation.
Incremental innovations
is a step forward along a technology trajectory, or from the known to the unknown, with little uncertainty about outcomes and success and is generally minor improvements made by those working day to day with existing methods and technology (both process and product), responding to short term goals. Most innovations are incremental innovations. A value-added business process, this involves making minor changes over time to sustain the growth of a company without making sweeping changes to product lines, services, or markets in which competition currently exists.

Breakthrough, disruptive or radical innovation

involves launching an entirely novel product or service rather than providing improved products & services along the same lines as currently. The uncertainty of breakthrough innovations means that seldom do companies achieve their breakthrough goals this way, but those times that breakthrough innovation does work, the rewards can be tremendous. Involves larger leaps of understanding, perhaps demanding a new way of seeing the whole problem, probably taking a much larger risk than many people involved are happy about. There is often considerable uncertainty about future outcomes. There may be considerable opposition to the proposal and questions about the ethics, practicality or cost of the proposal may be raised. People may question if this is, or is not, an advancement of a technology or process.

Radical innovation
involves considerable change in basic technologies and methods, created by those working outside mainstream industry and outside existing paradigms. Sometimes it is very hard to draw a line between both.

New technological systems (systemic innovations)
that may give rise to new industrial sectors, and induce major change across several branches of the economy.

Social innovation
a number of different definitions, but predominantly refers to either innovations that aim to meet a societal need or the social processes used to develop an innovation .


DIFFUSION OF INNOVATION




Once innovation occurs, innovations may be spread from the innovator to other individuals and groups. This process has been studied extensively in the scholarly literature from a variety of viewpoints, most notably in Everett Rogers' classic book, The Diffusion of Innovations. However, this 'linear model' of innovation has been substantinally challenged by scholars in the last 20 years, and much research has shown that the simple invention-innovation-diffusion model does not do justice to the multilevel, non-linear processes that firms, entrepreneurs and users participate in to create successful and sustainable innovations.

Rogers proposed that the life cycle of innovations can be described using the ‘s-curve’ or diffusion curve. The s-curve maps growth of revenue or productivity against time. In the early stage of a particular innovation, growth is relatively slow as the new product establishes itself. At some point customers begin to demand and the product growth increases more rapidly. New incremental innovations or changes to the product allow growth to continue. Towards the end of its life cycle growth slows and may even begin to decline. In the later stages, no amount of new investment in that product will yield a normal rate of return.

The s-curve is derived from half of a normal distribution curve. There is an assumption that new products are likely to have "product Life". i.e. a start-up phase, a rapid increase in revenue and eventual decline. In fact the great majority of innovations never get off the bottom of the curve, and never produce normal returns.

Innovative companies will typically be working on new innovations that will eventually replace older ones. Successive s-curves will come along to replace older ones and continue to drive growth upwards. In the figure above the first curve shows a current technology. The second shows an emerging technology that current yields lower growth but will eventually overtake current technology and lead to even greater levels of growth. The length of life will depend on many factors.

INTRODUCTION

The phrase The Long Tail (as a proper noun with capitalized letters) was first coined by Chris Anderson in an October 2004 Wired magazine article to describe certain business and economic models such as Amazon.com or Netflix. Businesses with distribution power can sell a greater volume of otherwise hard to find items at small volumes than of popular items at large volumes. The term long tail is also generally used in statistics, often applied in relation to wealth distributions or vocabulary use.

THE LONG TAIL BY CHRIS ANDERSON
The phrase The Long Tail was, according to Chris Anderson, first coined by himself. The concept drew in part from an influential February 2003 essay by Clay Shirky, "Power Laws, Weblogs and Inequality" that noted that a relative handful of weblogs have many links going into them but "the long tail" of millions of weblogs may have only a handful of links going into them. Beginning in a series of speeches in early 2004 and culminating with the publication of a Wired magazine article in October 2004, Anderson described the effects of the long tail on current and future business models. Anderson later extended it into the book The Long Tail: Why the Future of Business is Selling Less of More (2006).

Anderson argued that products that are in low demand or have low sales volume can collectively make up a market share that rivals or exceeds the relatively few current bestsellers and blockbusters, if the store or distribution channel is large enough.

Anderson cites earlier research by Erik Brynjolfsson, Yu (Jeffrey) Hu, and Michael D. Smith, who first used a log-linear curve on an XY graph to describe the relationship between Amazon sales and Amazon sales ranking and found a large proportion of Amazon.com's book sales come from obscure books that are not available in brick-and-mortar stores. The Long Tail is a potential market and, as the examples illustrate, the distribution and sales channel opportunities created by the Internet often enable businesses to tap into that market successfully.

An Amazon employee described the Long Tail as follows: "We sold more books today that didn't sell at all yesterday than we sold today of all the books that did sell yesterday."

Anderson has explained the term as a reference to the tail of a demand curve. The term has since been rederived from an XY graph that is created when charting popularity to inventory. In the graph shown above, Amazon's book sales or Netflix's movie rentals would be represented along the vertical line, while the book or movie ranks are along the horizontal axis. The total volume of low popularity items exceeds the volume of high popularity items.

In a 2006 working paper titled "Goodbye Pareto Principle, Hello Long Tail", Erik Brynjolfsson, Yu (Jeffrey) Hu, and Duncan Simester found that, by greatly lowering search costs, information technology in general and Internet markets in particular could substantially increase the collective share of hard to find products, thereby creating a longer tail in the distribution of sales. They used a theoretical model to show how a reduction in search costs will affect the concentration in product sales. By analyzing data collected from a multi-channel retailing company, they showed empirical evidence that the Internet channel exhibits a significantly less concentrated sales distribution, when compared with traditional channels. An 80/20 rule fits the distribution of product sales in the catalog channel quite well, but in the Internet channel, this rule needs to be modified to a 72/28 rule in order to fit the distribution of product sales in that channel. The difference in the sales distribution is highly significant, even after controlling for consumer differences.


Demand-side and supply-side drivers

The key supply side factor that determines whether a sales distribution has a Long Tail is the cost of inventory storage and distribution. Where inventory storage and distribution costs are insignificant, it becomes economically viable to sell relatively unpopular products; however when storage and distribution costs are high only the most popular products can be sold.

Take movie rentals as an example: A traditional movie rental store has limited shelf space, which it pays for in the form of building overhead; to maximize its profits, it must stock only the most popular movies to ensure that no shelf space is wasted.

Because Netflix stocks movies in centralized warehouses, its storage costs are far lower and its distribution costs are the same for a popular or unpopular movie. Netflix is therefore able to build a viable business stocking a far wider range of movies than a traditional movie rental store. Those economics of storage and distribution then enable the advantageous use of the Long Tail: Netflix finds that in aggregate "unpopular" movies are rented more than popular movies.

A recent MIT Sloan Management Review article, titled "From Niches to Riches: Anatomy of the Long Tail" , examines the Long Tail from both the supply side and the demand side and identifies several key drivers. On the supply side, the authors point out how e-tailers' expanded, centralized warehousing allows for more offerings, thus making it possible for them to cater to more varied tastes.

On the demand side, tools such as search engines, recommender software and sampling tools are allowing customers to find products outside of their geographic area. The authors also look toward the future to discuss second order amplified effects of Long Tail, including the growth of markets serving smaller niches.


Cultural and political impact

The Long Tail has possible implications for culture and politics. Where the opportunity cost of inventory storage and distribution is high, only the most popular products are sold. But where the Long Tail works, minority tastes are catered to, and individuals are offered greater choice. In situations where popularity is currently determined by the lowest common denominator, a Long Tail model may lead to improvement in a society's level of culture. Television is a good example of this: TV stations have a limited supply of profitable or "prime" time slots during which people who generate an income will watch TV. These people with money to spend are targeted by advertisers who pay for the programming so the opportunity cost of each time slot is high. Stations, therefore, choose programs that have a high probability to appeal to people in the profitable demographics in order to guarantee a return.

Twin Peaks, for example, did not have broad appeal but stayed on the air for two seasons because it attracted young professionals with money to spend. Generally, as the number of TV stations grows or TV programming is distributed through other digital channels, the key demographic individuals are split into smaller and smaller groups. As the targeted groups get into smaller niches and the quantity of channels becomes less of an opportunity cost, previously ignored groups become profitable demographics in the long tail. These groups along the long tail then become targeted for television programming that might have niche appeal. As the opportunity cost goes down with more channels and smaller niches, the choice of TV programs grows and greater cultural diversity rises as long as there is money in it.

Some of the most successful Internet businesses have leveraged the Long Tail as part of their businesses. Examples include eBay (auctions), Yahoo! and Google (web search), Amazon (retail) and iTunes Store (music and podcasts) amongst the major companies, along with smaller Internet companies like Audible (audio books) and Netflix (video rental).

Often presented as a phenomenon of interest primarily to mass market retailers and web-based businesses, the Long Tail also has implications for the producers of content, especially those whose products could not - for economic reasons - find a place in pre-Internet information distribution channels controlled by book publishers, record companies, movie studios, and television networks. Looked at from the producers' side, the Long Tail has made possible a flowering of creativity across all fields of human endeavour. One example of this is YouTube, where thousands of diverse videos - whose content, production value or lack of popularity make them innappropriate for traditional television - are easily accessible to a wide range of viewers.

Internet commercialization pioneer and media historian Ken McCarthy addressed this phenomenon in detail from the producers' point of view at a 1994 meeting attended by Marc Andreessen, members of Wired Magazine's staff, and others. Explaining that the pre-Internet media industry made its distribution and promotion decisions based on what he called "lifeboat economics" and not on quality or even potential lifetime demand, he laid out a detailed vision of the impact he expected the Internet would have on the structure of the media industry with what has turned out to be a remarkable degree of accuracy, foreshadowing many of the ideas that appeared in Anderson's popular book.

The recent adoption of computer games as tools for education and training is beginning to exhibit a long-tailed pattern. It is significantly less expensive to modify a game than it has been to create unique training applications, such as those for training in business, commercial flight, and military missions. This has led some to envision a time in which game-based training devices or simulations will be available for thousands of different job descriptions. Smith pursues this idea for military simulation, but the same would apply to a number of other industries.


Competition and the Long Tail

The Long Tail may threaten established businesses.Before a Long Tail works, only the most popular products are generally offered. When the cost of inventory storage and distribution fall, a wide range of products become available. This can, in turn, have the effect of reducing demand for the most popular products.
For example, Web content businesses with broad coverage like Yahoo! or CNET may be threatened by the rise of smaller Web sites that focus on niches of content, and cover that content better than the larger sites. The competitive threat from these niche sites is reduced by the cost of establishing and maintaining them and the bother required for readers to track multiple small Web sites. These factors have been transformed by easy and cheap Web site software and the spread of RSS.

Similarly, mass-market distributors like Blockbuster may be threatened by distributors like Netflix, which supply the titles that Blockbuster doesn't offer because they are not already very popular. In some cases, the area under the long tail is greater than the area under the peak.

Double jeopardy is a statistical phenomenon in marketing where, with few exceptions, brand loyalty is lower among buyers of low market share brands than buyers of high market share brands. The market leader in an industry enjoys a high level of sales due to customer loyalty, with a higher probability of repeat purchase. This phenomenon occurs because consumers believe the high sales product to be of high quality. Market challengers seek to gain this brand loyalty advantage and market leaders seek to defend their position.

It is not necessarily the incumbent or the first entrant to a market that enjoys the benefits of brand loyalty; it is the company that is the market leader once the industry has reached a substantial size. The double jeopardy effect is one reason that companies invest heavily in advertising. Once a company has gained a high market share, it will strongly defend it.


Market-challenging brands
The implication of double jeopardy is that brand managers of smaller firms should not be reprimanded for lower customer loyalty figures. Also, they should not be expected to build customer loyalty to the brand without the resources to build market share.

Exceptions to double jeopardy

Double jeopardy is not applicable if:

•the market is homogenous. There is no branding due to the homogeneity of the product.
•the market is too small. Too small a market and market share is not substantial enough to make a difference.
•the cost exceeds the benefit. If the cost of branding to achieve a high market share is greater than the benefit, then even though double jeopardy may exist, it is not worth striving for.
•the product has a monopoly. Monopolies do not need to brand themselves to increase sales.
•the product is a commodity. The market sets the price that branding does not influence.
•the product or market is new. If it is a new product or a new market, the brand may not enjoy the double jeopardy effect until the market matures and becomes substantial. An industry that has matured and become more substantial will reward the market leader with strong brand loyalty.

Breakthrough management, rather than core competencies and TQM, is the key to winning in the great new globalised world.
-Dr. Shoji Shiba
(Japanese quality expert)

HISTORY

The age of corporate management is divided into three parts:
 Controlled management
 Kaizen
 Breakthrough management

CONTROLLED MANAGEMENT

 It was in practice in 1930’s.
 Is a top down strategy
 Where quality is controlled with mass production in mind.
 Production concept, Selling concept.

KAIZEN- Continuous improvement

 Started during the 1960’s.
 It was a bottom up approach.
 The customer and the worker was the focal point.
 Basic aims:
- humanize work place
- reduce wastage
 Improvement based on internal information.

What is Breakthrough management?

 In the world of globalization of economies, BM is becoming a new buzz word.
 Radical business ideas which may even include transforming the line of business for accelerated growth.
 Or transforming the business to become more innovative and powerful.
 Creation of new customer segment where it didn’t exist before.
 The key to BM is to unlearn what has been learnt and learn new strategies.
 It Is about managing key business factors i.e.
-effectiveness
-consistency
-focused mobilization of people

BM V/S CORE COMPETENCIES

 Core competency is concerned with corporate culture and technical strengths
 Diversification is a move to protect against existing risks
 BM is about taking a future risk


IMPORTANT INGREDIENTS

 New paradigm shift to achieve exponential growth- think laterally, forget core competencies and cost cutting.
 Think radically, be willing to take risks
 See the future and chart out a break through strategy.
 Visit customers where the product or service is being used and chart out future course of action.
 Expand, export and go global.
 No mindless diversification, cap on finances that can be risked in pursuit of new ventures.
 Invest in R&D and produce new products.
 Change mental make of new CEO’s in the era of globalizations.
 Grow at accelerated speed, pursue radical business ideas.
 Change line of business or transform business- become innovative and more powerful.


HOW TO CONVINCE CEOs?

 Good business opportunity
 One who takes risks
 Knows that it is beneficial for the business
 Thus CEO needs to be convinced

CHALLENGES FACED BY CEOs

 Money has to be spend initially without any apprehensions
 Thus CEO needs to be proactively involved


FREQUENCY

 Almost every 10 years
 That’s usually the duration of a product life cycle



IMPLEMENTATION

 First phase – idea generator-forsees market-changes to be carried-prepares business case
 Second phase – develop technical capability-infrastructure- for execution of idea
EXAMPLES
 TV TO INTERACTIVE TV (TATA SKY) –
- Direct To Home (DTH)
- Channels under categories
- Interactive features
- Games
- Timings of next feature
 LANDLINES TO MOBILES
- earlier only landline phones
- difficult to communicate
- mobiles developed first in 1947
- by BELL lab engineers at AT&T
- huge success as increased convenience

 PAPERWORK TO COMPUTERWORK
- paperwork too cumbersome
- difficult in offices
- automation of all file work in offices
- more efficiency and speed
- used in all walks of life

 Books To Google
 Low cost Airlines- Air Deccan
 From Medicine and tourism to medical tourism- ATE GROUP OF COMPANIES.
 ICICI- Microfinance

Current trends in breakthrough management.
 Tata steel- chorus
 Hindalco-novellis
 Bajaj, mahindra& mahindra
 Reliance industries
 UB beverages
 Organized retail in India



Breakthrough Management Group


 BMG is the world's leading provider of training and consulting for performance excellence.
 Specializing in Lean, Six Sigma and Innovation, BMG works with leading companies around the globe to help "in-source" new capability and develop new core competencies.
 Founded in 1999 and headquartered in Longmont, Colo., BMG has developed a loyal clientele that today exceeds 200 active businesses in industries as diverse as biotechnology, health care, finance, telecommunications, manufacturing and energy.
 BMG has offices in 12 countries and has more than 100 employees worldwide.

Stretch, Leverage and Fit

To achieve Strategic Intent – you need to Stretch. As of today there is a misfit between resources and aspirations. So instead of looking at resources, you will look at resourcefulness. To achieve you will stretch and make innovative use of your resources.

This leads to Leveraging your resources. Leverage refers to concentrating your resources to your strategic intent, accumulating learning, experiences and competencies, in a manner that a scarce resource base can be stretched to meet the aspirations that an organizational resources to its environment.

The strategic fit is the traditional way of looking at strategy. Using techniques such as SWOT analysis, which are used to assess organizational capabilities and environmental opportunities, Strategy is taken as a compromise between what the environment has got to offer in terms of opportunities and the counteroffer that the organization makes in the form of its capabilities.

Under fit, the strategic intent is conservative and seems to be more realistic, but you may not be aware of the potential; under stretch and leverage it could be improbable, even idealistic, but then you look at something far beyond present possibilities and look at the potential possibilities.