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The New Kids on the Block Exploring the Brand Identity of Disruptive Innovators

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The New Kids on the Block Exploring the Brand Identity of Disruptive Innovators The New Kids on the Block Exploring the brand identity of disruptive innovators By: Jana Tigges, Bettina van der Stelt & Jessica Volk The New Kids on the Block Exploring the brand identity of disruptive innovators Jana Tigges, Bettina van der Stelt & Jessica Volk Abstract Aim: The aim of this paper is to examine the corporate brand identity of disruptive innovators that have changed entire industries. Moreover, this paper strives to answer the question, whether a universal pattern of corporate brand identities for these “New kids on the block” can be identified and if so, what it looks like. Approach: Firstly, a literature review is conducted in order to provide theoretical background in regard to the research question of this paper. Secondly, a qualitative multiple case study approach is used to understand the background and development of the investigated companies. Further, the corporate brand identity of each company was explored in order to identify significant similarities and differences. Thirdly, a corporate brand identity matrix for “New kids on the blocks” was established based on the universal commonalities of the brand identities. Findings: A universal pattern of disruptive corporate brand identities exists and is illustrated in a model matrix created by the authors. Originality/ value: The paper’s added value lies on the creation of a corporate brand identity matrix of disruptive innovators, here referred to as the “New kids on the block”. Keywords: disruptive innovation, corporate brand identity, technological shifts Paper type: Research paper Introduction Indeed, literature provides evidence that a First #GAFA - Google, Apple, Facebook, brand’s innovative technology alone, is not Amazon sufficient for a successful market driving Then #BATX - Baidu, Alibaba, Tencent, strategy. In this context, Tarnovskaya & Elg Xiaomi (2012) argue that the unique combination of a Now #NATU - Netflix Airbnb Tesla Uber market driving approach in connection with a (Ferreiro, 2018) strong corporate brand identity builds the driving force for a company’s success. In These acronyms are standing for the most similar ways, Lawer and Knox (2007) disruptive companies of their times. Each one emphasize that all managerial actions and of them has changed an entire industry with decision are in line with the corporate brand of its technological innovations. United by a a company (Lawer and Knox, 2007). However, market driving approach and a far-reaching literature does not provide an answer to what vision, these companies managed to create the brand identity of disruptive innovators new categories with outstanding success. looks like and whether fundamental patterns However, do the innovations alone deserve all within the brands DNA can be found. the applause for the companies’ success or is it Therefore, this research paper will focus on the also, partly owed to a strong corporate brand newest group of disruptive companies, namely standing behind these organizations? Netflix, Airbnb, Tesla and Uber (NATU), which are here also referred to as the “New kids In order to revolutionize entire industries, on the block”. The corporate brand identities companies are not only creating new markets will be individually examined with the aim of by using the blue ocean method but also by identifying common similarities and implementing a market driving approach differences. This is done in order to solve the (Kumar et al 2000). Elg et al (2012) state, that research question: If there is a universal pattern a market driving approach “[...]implies of corporate brand identities for “New kids on influencing the structure of the market and/or the block”, what does it look like? the behavior(s) of market players in a direction that enhances the competitive position of the Literature Review business.” Hence, firms, that are using the With regard to the purpose of this paper, there market driving approach successfully, do not are two superordinate factors important to simply adapt to temporary customer examine. On the one hand, there is the market preferences. Instead, they are able to develop approach driven by innovation and on the other unique and new value propositions (Ghauri, hand, there is the brand’s corporate identity, 2014). which are both crucial factors for disruptive innovators’ success. In order to understand The Corporate Brand Identity Matrix these dynamics, relevant terminology will be The corporate brand identity matrix (CBIM) is shortly elaborated. a framework that allows companies to understand and define its corporate brand Blue ocean method identity, which describes the determining All companies examined in this paper used the characteristics of an organization (Urde, 2013). blue ocean method to differentiate themselves According to Kapferer (2012) a “[...] corporate from the competition. According to Kapferer identity helps [...] an organization feel that it (2012), companies that use the blue ocean truly exists and that it is a coherent and unique method can be considered as innovators, who being, with a history and a place of its own, are able to create completely new markets. different from others.” In fact, from a strategic Consequently, the dynamics of these markets is point of view, Urde (2013) argues that by not driven by the desire to outperform others as defining a corporate brand competition does not exist yet. However, identity, management attempts to influence innovations created in a blue ocean how the organization is perceived by internal environment are always disruptive ones and external stakeholders (Urde, 2013). (Kapferer, 2012). The matrix takes both the outside-in and inside- out perspectives into consideration and thus Disruptive innovation balances a market- and brand-oriented A disruptive innovation is “[...] a process approach (Urde, 2013). By focusing on the whereby a smaller company with fewer core of a brand, further internal and external resources is able to successfully challenge elements need to be examined in order to established incumbent business.” (Clayton, formulate a strong corporate identity (Urde, Raynor & McDonald, 2018). By further extend, 2013). it is also a process, in which a new product or The internal elements intended by the service outperforms an older one to create organization (sender) are defined in terms of competitive advantage (Business Dictionary, three organizational attributes: its “mission and 2018). Clayton et al (2012) define disruption as vision”, its “culture” and its “competences”, successful, when the product is bought by and relate to the company’s purpose of mainstream customers. existence and inspiration, its work ethics and unique skills that differentiate itself from the competition (Urde, 2013). Market driving approach Illustration 1: Corporate Brand Identity Matrix (Source: Urde, 2013) The external/internal elements can be Methodology considered as the soul of the brand that is driven To start, a literature review was conducted in by the brand’s core comprising its promises and order to explain the external and internal supporting values, from which human driving forces that facilitate an innovative characteristic of employees can be derived that brand entry in established markets. The represent and shape a unique corporate external view focuses on the market approach, personality (Urde, 2013). Moreover, the way while the internal perspective emphasizes the the company expresses itself and importance of a strong corporate brand identity. communicates with consumers is crucial for the company’s value of brand recognition (Urde, Furthermore, a multi-case study approach was 2013). conducted. Thereby, the paper investigated and Finally, the external elements intend to reach analyzed four cases of new entry brands, the receiver outside of the organization and namely Netflix, Airbnb, Tesla, and Uber consists of a company’s value proposition, (NATU), all of which have disrupted their position and relationship (Urde, 2013). The respective industries. value proposition relates to the company’s key The multi-case study approach consisted of offerings and how the latter appeals to three parts. Firstly, case descriptions exploring consumers (Urde, 2013). This in turn, should the companies’ background and developments have a positive impact on the relationship were established. between customers and non-customer Secondly, the corporate brand identity of each stakeholders, ultimately leading to a buying case was investigated. There are several models decision (Urde, 2013). Finally, the position such as the brand identity prism developed by element describes how the company intends to Kapferer (2012) that help managers to define a position itself in the market and in the minds of brands’ identity. Since Kapferer’s brand consumers (Urde, 2013). identity prism rather focuses on product brands, According to Urde (2013) the arrows it does not serve as an appropriate framework symbolize a linkage between all nine elements. for this paper (Urde, 2013). However, the In fact, the author argues that “[i]n a coherent corporate brand identity matrix developed by corporate brand identity, the core reflects all Urde (2013) considers internal and external elements and every elements reflects the core.“, components and allows the alignment of a which highlights the interdependence of each corporate identity with its core and is therefore factor being crucial for a strong organizational better suited for the purpose of this research. brand (Urde, 2013). Thirdly, in line with Urde’s framework
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