Your 'familiness' has brand advantage



Michael N. McGrann
Executive Director, High Center

by Michael N. McGrann, Executive Director,
S. Dale High Center for Family Business

Following our final breakfast seminar of the 2010-11 series (which included a case study of rebranding by Center member Stauffers of Kissel Hill), one of the attendees asked, "Should we be upfront and out front with customers that we are a family business?"

Without knowing anything about your particular family business brand, I would say yes, that you should be promoting the fact that you are a family business. Why? Because your customers care deeply that you are a family business. Many Fortune 500 companies market the fact that are family business. At the end of each add from Johnson Wax we hear the announcer say: “S.C. Johnson, a family company.” Ford Motor Company, Enterprise Car Rental, and local food manufacturer Dietz and Watson are but a few of the companies who market their “familiness” for good reason: research shows that consumers are more loyal to brands they know to be owned by family businesses.

So if consumers are happier buying from family businesses, why not let them know about your commitment to them and to your business? Let them know that your family stands behind your product and that they are sharing in your family’s heritage and tradition of great products and services. Consumers are hungry for the stability, the honesty, the commitment inherent in purchasing from a family business.

In addition, when you market, or even brand, your “familiness” you are distinguishing your product from your competition in a way that is truly unique. In doing so, you create the potential for a competitive advantage because you have something (your family name… which creates loyalty) that can never be copied.

One of my favorite examples of marketing your “familiness” can be seen in this advertisement for Columbia Sportswear. As you watch the video, ask yourself, what are they really selling?

While it is also true that your familiness can constrain your family business, if you haven't identified your resources and capabilities that sets your family business apart from other businesses, you haven't tapped into a critical resource for competitive advantage.

Mike's bottom line: For a host of reasons, you should not only be up front about being a family business, you should embrace being a family business.

What is a competitive advantage and how do you build one?

by Michael W. Van Belle, Senior Vice President and Chief Financial Officer of The High Companies

A competitive advantage is the result of distinct competencies that allows an organization to be successful. These competencies allow the company to better serve the end customer and thus make the company the preferred choice of the market. In order for these competencies to be sustainable, they must be unique (not possessed my many), not obvious, and difficult to reproduce. Competitive advantages are based on a combination of resources (such as patents, proprietary knowledge, reputation, etc.) and capabilities (the internal processes and informal ways-of-working)-- provided these resources and capabilities allow a company to better serve the customer.

To build a competitive advantage, you must first fully understand your marketplace and customer requirements. No matter how well your internal processes perform or how many patents you hold, if the end result is not something desired by the customer you will not have a competitive advantage. The following article is a great example of understand what is important to the customer and using it to make a competitive advantage: "Great Service: The Ultimate Competitive Advantage."

Second, a company must fully understand its own abilities and opportunities to combine their efforts and effects in a way that is not a common practice. Lastly, there must be a way to protect the competencies developed. Often this is done through building relationships, patents, and trade secrets. A review of competitive advantage as defined by Michael Porter is available at this site.

How do you start strategic planning?

by Michael W. Van Belle, Senior Vice President and CFO of The High Companies

Our strategic planning process started with visioning sessions and scenario planning. This was an involved process that over several months helped the management teams in each of our operating companies develop a vision for their future. The mission, which describes the vision of the future, was then developed to ‘set a path’ for the company. We spent significant time in these activities as we have started to develop strategy further into the future.
The remainer of the activities followed the typical strategic planning process. Environmental scans of the company and their industry were completed to develop a SWOT (strength-weaknesses-opportunities-threats) analysis. The strategy formulation phase focused on improving our competitive advantages based one the internal and external influences determined by the SWOT analysis. Implementation and control of the results is an involved process that includes critical discussion at the board level, forecasting, the capital budgeting process, communication with all co-workers, Policy Deployment, cascading objectives in our human resource and performance planning processes, as well as many other activities.
Addition information on the strategic planning process is available at QuickMBA.com and the Free Management Library.

Quote of the week

“For many companies . . . people are the prime source of competitive advantage. Talented people, in the right kind of culture, have better ideas, execute those ideas better – and even develop other people better. As Larry Bossidy, the CEO of Allied Signal told us, 'At the end of the day, we bet on people, not strategies.'”

-- Charles Fishman, the War for Talent