Factfile 31
One source of competitive advantage - with a caveat
In contrast to product and price, one source of competitive advantage that is still alive and well is brand. In fact, globalisation and large-scale distribution seem to be bolstering the ability of large, dominant companies to brand their products and leverage that brand for growth and share.
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For example, Coke (actually, Coca Cola) has done quite nicely, to say the least, selling a product, one that's basically about the same as its competitors? offerings, to just about any person on earth who wants a soda. Coca Cola sold 834,000,000 servings of soda products every day in 1996. As more and more people drink Coke, its brand becomes more and more established, leading to more consumption ... and so on.
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Same for McDonald?s. Those Russians and Chinese who stand in lines for five hours to get a hamburger - is it because the hamburger is so inherently good or because McDonald's is, well, McDonald's?
Globalisation and economies of scale seem to benefit strong brands and make them stronger. It's enough to make anyone want a strong, global brand. On the other hand, not all brands last forever.
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It can be a tenuous source of competitive advantage. Coke and McDonald's are making a killing, but what about Adidas or Apple Computer or Montgomery Ward? All were once dominant companies with superior brands, but all have succumbed to savvier competitors and changing consumer tastes.
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You can take a strong brand to the bank and companies do, with brand equity showing up on some balance sheets ? but you still need a durable competitive advantage to back up and support that brand.