The global financial crisis of 2008-2009, COVID, the tariff wars. It’s too early to say how today’s volatility will translate into real and sustained economic pain. But the psychological and share price impacts are already genuine.
As always, the immediate focus is on the losers. But there will also be winners – the businesses that don’t merely survive the storm but emerge stronger and better able to take advantage of the relative weakness of competitors.
We’ve looked at three very different brands that all came out of the 2008-2009 crisis stronger than ever, three of whom are still market leaders today. What we see in each is a brand that is crystal clear about the foundations of its success, and when times are hard, doubles down on building around those foundations.
Netflix had a single-minded belief that consumers wanted their entertainment unlimited and on-demand, but a flexible mindset when it came to the delivery mechanism. This enabled them to pivot rapidly from a flat-fee unlimited DVD rental business to a streaming business the moment they felt technology made the latter feasible.
After taking a big hit at the start of the financial crisis, closing 900 stores, Starbucks went back to what had made it successful – the relationship it had built with its customers, which revolved in large part around the employees in the stores. It invested in technology to amplify this relationship with the launch of ‘My Starbucks Idea’, pioneered mobile applications and invested in its baristas.
Throughout the 80-plus years of its history P&G has stayed true to a strategy of meeting the essential everyday needs of consumers. Regardless of the economic climate, people need to do laundry, brush their teeth and take care of their babies. And in these categories people care about the performance of the products they use. This is why, although they lost a few customers to low-cost competitors in the 2008 crisis, they maintained strong leadership positions in all their key categories, positions they continue to hold today.
These winning strategies were not driven by advertising and marketing. The ability of these brands to withstand the economic storm, to succeed when others failed, was based on the strong foundations they had built inside the organisation.
This means building and reinforcing a culture where everyone is aligned around the vison for the business. They understand both what it does and what it doesn’t do, allowing them to innovate in ways that stay true to its recipe for success. And they have a deep understanding of who their customers are and what they want, so they know what a great experience means for their customers and the role they each play in delivering it.
In short, even in times of volatility there is opportunity, and the winners will be brands that build their strength from the InsideOut.
