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Brandwave-logo-6.png |Innovation Strategy | jan '19
17.01.2019
The McKensie report regarding the Lebanese economy development has been finally out earlier this year. One of its main recommendation for regaining stability and growth  is to focus on the key sectors that would drive the economy potential.
It is not surprising that knowldege and innovation are at the core of these recommendations. They should be a key focus for the Lebanese government economical plan: relying on thechnology to develop the productivity in key sectors but also helping companies across sectors to  innovate in order to survive and drive growth.

To do so, Lebanese Companies need to focus on critical, differentiating capabilities in order to align innovation with their overall business strategy. Referring To Booz & Co article on the subject, “the best performing companies develop additional capabilities that are very specific to their chosen innovation strategies. Some companies are technology drivers: Their strategy is to develop leading-edge products. These capabilities, however, are less crucial for need seekers, whose strategy is to identify unmet customer needs and innovate to fill them. The most successful companies, we found, are those that focus on a particular, specifically aligned set of common and distinct capabilities that enable them to better execute their chosen strategies.”

Successful innovators globally focus on what matters most rather than spreading their effort and resources on capabilities that are less critical. Identifying the core value proposition of Local Brands and Businesses will lead to better focus and alignment, and will uncover innovation opportunities, boost top-line growth and reduce relative costs--all at the same time.

Today, through the toughest economic crisis of the country, it is the right time to react and take action. Innovation should not be considered as a luxury anymore, Innovation is a must to survive, to avoid cannibalization, to disrupt the market before being disrupted.

It is time for local businesses to re-invent themselves like global ones are doing constantly to keep up with market changes. Lebanon has always been the country of services and creativity, in a time where services are gaining grounds VS products facilitating the life of busy consumers, Local firms in the sector business for instance should jump on the opportunity to take their offering to a different level using the latest human centric approach to be in line with their customer’s changing expectations.

Brandcell Innovation and strategy consultancy have been applying the design thinking approach for few years now, helping Brands and Companies in Lebanon and the region in various sectors (banking, HORECA, Healthcare, Retail...) define their value proposition, innovate and re-design their service strategy and experience. 

Because we believe that here in this small country more than anywhere in the world innovation is the precious fuel of our future.
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17.01.2019
With pressure at an all-time high and investors losing patience, it’s time for brands to take control of their destinies. Although there’s no single way forward, the mission remains clear: Disrupt your business before someone else does.

On the whole, the fast-moving consumer goods (FMCG) sector continues to face headwinds to growth. Many longstanding brands within the sector, while once prosperous, have found it challenging to repeat yesterday’s success. At the root of these challenges is the rapid pace of change in the world, which has forever altered the way consumers engage with brands. While this dynamic has certainly challenged traditional conventions, it has also presented many new opportunities. The brave brands that have capitalized on these opportunities are finding success and are seeing a clear path back to growth. Those who haven’t proactively embraced today’s pace are finding themselves vulnerable to a new generation of fearless entrants intent on bringing disruption.

It’s time to bring the fast back into fast-moving consumer goods. We offer four ways that brands can bravely seek to disrupt their businesses, as well as examples of brands that have taken the leap, in an effort to jumpstart their business, and returned the fast to FMCG.

1. Disrupt by Thinking Like a Startup

Innovation is the lifeblood of any brand. It always has been, and always will be. But innovating at scale has posed a challenge for large brands within large corporations. Applying established growth methods to established brands is, by definition, counter to the innovation they seek. To achieve mass disruption, brands need to think like a startup.

This is a strategy into which many FMCG companies—including Nestlé, Procter & Gamble, Coca-Cola, General Mills, and Mondelēz—have leaned, forming startup/venture funds or incubators to find their next innovation. These organizations are finding success by isolating themselves from the typical constraints and KPIs of their larger businesses and acting like entrepreneurs, working with lean innovation philosophies built to nurture a startup mentality and disruption.

Within this year’s Best Global Brands ranking, there are several standout examples of brands fostering mass disruption by thinking like a startup. All of these companies have demonstrated strong commitment and responsiveness:

  • Nestlé started an internal innovation project consisting of a digital acceleration for the company. Called DAT and inspired by Facebook and Google, the project is an entrepreneurial space, located in Nestlé’s global headquarters, where employees work for periods of eight to 12 months at a time. DAT members undertake immersive training and work on strategic business ideas, often participating in hackathons and intensive problem-solving activities. For Nestlé, the overarching goal is to “loosen the screws” of a large and hierarchical corporate company in order to permit flexibility and experimentation, e.g., the values of a successful startup.
  • Pampers found success in its Pure Protection line, which is an example of its lean innovation process, developed by a 10-person team over approximately 18 months—roughly half the amount of time and staffing resources of a typical rollout.
  • Lancôme launched Le Teint Particulier, a cosmetic foundation that was created by L’Oréal’s technology incubator. The foundation is customizable to specific skin tones: the Lancôme staff take a full scan of a customer’s skin and then use a diagnostic tool to calculate the precise formula that matches that skin. The foundation is then mixed in-store, before being placed in an identifiable bottle, with all the skin-type and color-preference information kept on file for the consumer’s next visit.

Want more inspiration on thinking like a startup? Explore the Breakthrough Brands that are driving disruption across sectors.

2. Disrupt through new business models

The rise of e-commerce has certainly transformed the landscape for FMCG brands forever. Brands that have relied on traditional business models, built on the shoulders of brick-and-mortar distribution, must continue to look for new ways to develop consumer-centric propositions—from product development to branding to distribution. Brands that haven’t sought new business models have found themselves being disrupted.

For instance, we’ve seen how FMCGs have been disrupted by the direct-to-consumer (DTC) challengers that are taking control of their value chain, capitalizing on shifting consumer purchasing behaviors. It wasn’t long ago that propositions like Dollar Shave Club, Warby Parker, and Allbirds were not considered serious competitors by the category’s elite. However, these brands recognized that the DTC business model has many benefits: the ability to be nimble, leveraging the opportunity to get much closer to consumers, innovating in real time in the marketplace, controlling the entire value chain, and pivoting with agility.

In response, some large FMCG brands are taking a page out of the disruptors’ playbooks and exploring alternative channels and business models as a means of innovating at mass scale. From this year’s Best Global Brands list, we highlight the following examples:

  • PepsiCo launched DTC product Drinkfinity, as the company responds to consumer preferences that are shifting from fizzy beverages to alternative territories. This innovation features a reusable water bottle with disposable flavor pods.
  • Kellogg’s launched a key innovation initiative, Joyböl, a “ready-in-seconds smoothie bowl,” targeting the hyper-convenience trend. In doing so, they also launched DTC, forgoing traditional distribution.
  • Gillette, fighting back against category disruptors, began receiving orders through the company’s new online DTC service, Gillette On Demand. This new service offers the traditional subscription-only option and an additional flexible on-demand purchase option, with an industry-first reorder process that is as simple as sending a one-word text message.

3. Disrupt through acquisition

With organic growth continuing to be a challenge, FMCGs should look to grow through acquisition, either to boldly enter new categories (to capitalize on shifts in consumer desires) or to bravely double down on categories where they already play.

Interbrand’s Brand Strength methodology comes into play when considering an M&A strategy, as data shows that this is a viable approach to jumpstart a stagnant category. M&A activity among the top FMCG companies, including P&G, L’Oréal, Nestlé, and Unilever, has seen an increase for 15 years running, driving the highest revenue jump for this group since 2011.

Examples from this year’s Best Global Brands:

  • Kellogg’s acquisition of RXBAR for USD $600 million was a bold move to capitalize on shifts by consumers to more health-conscious offerings with simpler ingredients.
  • L’Oréal acquired Modiface, a leading-edge VR technology player, signaling its commitment to evolving consumer experiences with cosmetic brands.
  • Colgate purchased two of the fastest-growing professional skincare brands, PCA SKIN and EltaMD, in an attempt to elevate the brand into the global skin-care category.
  • Danone completed its USD $10 billion acquisition of WhiteWave, bringing together businesses and brands to better meet consumers’ diverse preferences in high-growth categories.

4. Disrupt by bravely taking a stand

Disruption can take many forms, including casting your brand in a new light and creating new relevance and engagement opportunities with your audience. More and more, people are not merely buying your brand but rather buying into your brand, as they seek those that align with their values.

This is playing out as brands go beyond the traditional approach of simply pushing their product’s benefit messaging. Instead, brands that stand out engage in true brand activism, driving home a stance that bravely tackles topics that matter to consumers. Some examples of brand activism from this year’s Best Global Brands:

  • P&G announced a partnership with advocates, including journalist Katie Couric, aimed at driving gender equality. P&G announced the partnership during its #WeSeeEqual Forum and noted that some of P&G’s best-performing brands have the most gender-equal campaigns: Always’ #LikeAGirl, SK-II’s “Change Destiny,” and Olay’s “Live Fearlessly,” along with Tide, Ariel, Dawn, and Swiffer ads that show men sharing the load in household chores. Chief Brand Officer, Marc Pritchard, noted, “It’s clear that promoting gender equality is not only a force for good, it’s a force for growth.”

 

  • Danone is another brand firmly taking a stand when it comes to “One Planet. One Health.”—a campaign that reflects its vision that the health of people and the health of the planet are interconnected. What makes this successful is the internal commitment and external authenticity with which Danone leverages this brave brand stance.

The future belongs to the brave

Brands need to take bold action to achieve growth. The path forward can take many shapes. Opportunities are out there, but to find them, brands need to have the bravery to disrupt themselves before someone else does. This isn’t a sector for the timid. The future belongs to the brave.

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OUR NEWS
Brandcell Celebrating 10 Years of Achievements
Brandcell, the leading Strategy & Innovation consultancy is celebrating its 10th year of achievements in the local and regional markets. With more than 50 projects accomplished across industries (Financial, Electronics, Energy, Media and Telecommunications, Real Estate and construction, HORECA, Retail and Services), Brandcell is today highly contributing to the development of Brands and Companies strategic & innovation capabilities to succeed in a highly volatile & competitive environment.
17.01.2019
A successful company understands the need to reinvent itself every now and then to keep up with competition, market changes, technology and customer interest. Not doing so can mean a drop in stock price, a decrease in revenue, bankruptcy and even death. Does the name “Blockbuster” sound familiar?

Netflix Before

Today’s generation probably doesn’t remember that in the late 1990s and early 2000s, “Netflix and chill” wasn’t as easy as firing up the laptop and picking out a movie or TV show to binge-watch with no commercial interruptions. Instead, Netflix was kind of like an online Blockbuster.

In 1998, Netflix launched the first DVD rental and sales site with Netflix.com. One year later, the company debuted its subscription service, which allowed movie buffs to rent unlimited DVDs for a low monthly cost and receive them by mail.
 

Netflix After

It wasn’t until 2007 that Netflix transitioned to online streaming. Finally, viewers of all ages would have access to some of their favorite shows and movies, as well as original Netflix content.

Although the company has received some negative feedback from customers due to pricing changes, it’s experienced financial success over the long term. For example, Netflix stock was trading at $3.55 at the beginning of 2008. On Sept. 5, 2018, the stock closed at $341.18.

These days, it’s safe to say that Netflix is one of the best stocks to invest in. In July 2018, Netflix announced 5.15 million new subscribers during the previous quarter, bringing its total base to 130 million.

 

IBM Before

IBM knows a thing or two about reinventing itself and keeping pace with ever-evolving technology.

Since debuting as the Computing-Tabulating-Recording Company more than 100 years ago, IBM has undergone major transformations. Back then, CTR manufactured and sold various types of machinery, such as commercial scales, industrial time recorders, meat and cheese slicers and more. It wasn’t until 1924 that CTR became International Business Machines Corporation, although it had operated under the name since 1917 in Canada.

Fast-forward a few decades to the 1960s, after Thomas J. Watson Jr. became CEO and “led IBM’s transformation from a medium-sized maker of tabulating equipment and typewriters into a computer industry leader,” according to IBM’s website. In 1964, the company created System/360, which made it possible for machines in a product line to work with one another, creating a huge impact in the corporate world.

Less than 20 years later, in 1981, the IBM Personal Computer arrived. Although it wasn’t the first-ever PC, people began buying these computers to use in their daily lives.

However, the 1980s and 1990s were rough for the company. According to its website, “IBM was thrown into turmoil by back-to-back revolutions.” The PC revolution also brought competition from Microsoft and Apple, reported NPR in 2011. Further, IBM suffered annual net losses that reached the billions — a record of $8 billion in 1993, to be exact.
 

IBM After

The company had two options: reinvent or die. So, IBM shifted its focus to IT and consulting, according to NPR.

Still, the company has plans to further reinvent itself. In her most recent chairman’s letter, CEO Ginni Rometty wrote, “We have reinvented IBM for this moment — to fuel your dreams with Watson, with IBM Cloud, with deep expertise, with trust.”

According to the company, cloud and security revenue was up 20 percent in 2018. The increased trust in their cloud and security services led to a 4 percent total revenue increase from 2017, or $20 billion.


 

Amazon Before

More than 20 years ago, Amazon was a very different company. It’s hard to believe this go-to online retailer that sells everything you could possibly think of — from TVs and computers to groceries and household items — started off as an online book retailer.

In July 1995, CEO Jeff Bezos launched Amazon.com, which has changed drastically since the mid-90s. Back then, the website contained a lot of blue, hyperlinked text — quite different from the colorful photos and well-organized categories you’ll see on the site today.

Author Brad Stone — who wrote the book, “The Everything Store” about Amazon and Bezos — told NPR in 2013 that he thinks Bezos started off selling books because it was “a good place to start: [Books are] small, they ship easily in the mail, the selection that the internet enables was a great strategic advantage over the traditional chain booksellers of the time like Barnes & Noble and Borders.”

Indeed, buying books on Amazon was — and still is — easy and preferable to going to a physical bookstore for many people. Although Amazon experienced success with its book-selling strategy, in time Bezos reinvented Amazon to sell more than just books.


 

Amazon After

In 1996, the retailer introduced an affiliate program — known as the Amazon Associates Program — which helped the company expand its reach, according to CBS News. And after announcing its IPO in 1997, Amazon introduced “1-Click shopping” and began offering different products and services in various categories: music, DVD/video, home improvement, software, video games, gift ideas, kitchen and more.

These days, the company is making big money. For the second quarter of 2018, Amazon earnings reached $52.9 billion. In early September 2018, Amazon also became the second U.S. company after Apple to hit the $1 trillion mark in market value.


 

Old Spice Before

Old Spice is no longer associated with “old” men, thanks to successful rebranding attempts. The antiperspirant — which debuted in 1937 as Early American Old Spice for women and then in 1938 as Old Spice for men — is now a popular brand for all ages, but it wasn’t always that way.

After experiencing decades of success, Old Spice began to lose sales as competition increased. A 2014 case study by the University of Southern California found that by the early 2000s, the company suffered from “an outdated brand image.”

In 1990, Procter & Gamble — which owns brands from Pampers to Gillette — bought Old Spice from the Shulton Company. P&G attempted to rebrand the product, but it wasn’t until Old Spice launched its “Swagger” Campaign in 2008 that it started attracting the younger demographic it needed to compete with brands such as Axe, according to the study. Old Spice’s real moment of reinvention, however, came two years later.

 

Old Spice After

In 2010, NFL player Isaiah Mustafa starred in Old Spice’s “The Man Your Man Could Smell Like” campaign. You might remember it: Standing in front of a running shower with nothing but a towel on, Mustafa tells female viewers, “Hello, ladies. Look at your man, now back to me. Now back at your man, now back to me. Sadly, he isn’t me.” He goes on to suggest that if men switch to Old Spice, they can smell like him.

When the ad debuted on YouTube during Super Bowl weekend, it became a viral hit. And the campaign made an impact on sales, as well. AdWeek reported in July 2010 that overall sales for Old Spice body wash products jumped 107 percent after two new TV spots and online response videos debuted.

 

McDonald’s Before

In 2001, the book “Fast Food Nation: The Dark Side of the All-American Meal” came out — and it didn’t have that many nice things to say about fast food giant McDonald’s. Rob Walker wrote in a New York Times book review, “The aim of [author Eric Schlosser’s] book … is to force his readers to stop and consider the consequences of McDonald’s and its likes having become inescapable features of the American (and, increasingly, global) landscape — to contemplate ‘the dark side of the all-American meal.'”

Although it’s hard to tell if the book’s release directly — or indirectly — hurt McDonald’s reputation and brand in a monetary sense, the Wall Street Journal did report in 2003 that the restaurant posted its first quarterly loss in 38 years as a publicly traded company.
 

McDonald’s After

In the years since “Fast Food Nation,” McDonald’s has tweaked its menu offerings. McDonald’s currently offers healthy options including salads, milk, fruit and more, and makes its nutritional information available to consumers. In addition, McDonald’s has reinvented the fast food world by offering “All Day Breakfast.” No longer is McDonald’s only seen as the place to grab a Big Mac loaded with 500-plus calories.

In the second quarter of 2018, McDonald’s earned $5.4 billion in revenue. It was trading at $161.72 per share on Sept. 4, 2018. McDonald’s plans to spend more than it’s second-quarter earnings by shelling out $6 billion to make cosmetic upgrades for its restaurants. By 2020 McDonald’s will have new counters to enable table service, expanded McCafe counters and self-order kiosks.
 

Lego Before

Lego has been around since 1932 and for years has been a hallmark toy in many children’s lives. At one point in 2014, Lego was even the top toy company in the world, surpassing Mattel’s Barbie doll, reported the Wall Street Journal. But the Danish toy company wasn’t always a star performer.

According to a 2015 Fast Company article titled “How Lego Became the Apple of Toys,” the company was reportedly on the brink of bankruptcy about 10 years ago. The growth of video games and the internet threatened the toy company. In reaction, Lego reportedly made a few mistakes. Eventually, by cutting costs, improving processes and managing cash flow, the company started to bounce back.
 

Lego After

Next came a Lego line called Lego Friends, which appealed to young girls and fought the perception that only boys could play with the building blocks. But in 2014, when “The Lego Movie” hit theaters, things really started to change. The movie and its products helped Lego get the revenue boost it needed to overshadow Mattel in 2014, according to the Journal. Thanks to innovative products and a successful string of movies, Lego is more than just a toy now — it’s also a cool franchise.

According to Box Office Mojo, “The Lego Movie” grossed more than $469 million worldwide. Its sequel, “The Lego Batman Movie,” grossed $311 million worldwide. And according to the company’s 2017 annual report, net company profit was $7.8 billion.

 

Apple Before

It’s hard to imagine, but in the late 1990s, Apple was on the verge of bankruptcy. Fortunately for the company, one of Apple’s biggest competitors — Microsoft — rescued Apple from collapse by forking over millions.

According to Bloomberg, Microsoft’s $150 million investment helped Apple get the money it needed to change the technology space. In fact, it might be fair to say that, thanks to Microsoft, Apple is one of the world’s most valuable and innovative brands. With a brand value of $182.8 billion, Apple is currently the No. 1 company on Forbes’ most valuable list for the eighth year in a row.
 

Apple After

But give Apple some credit for its success; the company reinvented itself as more than just a Mac maker. Its handheld devices — from the Apple Watch to iPhones to iPads — have brought the company to an entirely new level.

Apple’s ability to reinvent itself helps explain why it’s consistently considered one of today’s best brands, and why Apple loyalists are always wondering, “What’s next?”

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FEATURED CASE STUDY: C&F Strategy
OVERVIEW
In 2018 C&F Management expressed the need to develop an innovative strategy with the aim to reconnect with profitable growth.
HOW DID WE HELP?
Brandcell Team uncovered key insights on business drivers followed by a 4 days workshop and the development of a new “Playing to Win” Strategy. 

The new strategy mandated BC to revisit the organization structure followed by an Implementation program including customer experience design was then put in action in order to bring the strategy to life.
FEATURED BOOK
Innovation As Usual
by by Thomas Wedell-Wedellsborg and Paddy Miller
Most organizations approach innovation as if it were a sideline activity. Innovation experts Miller and Wedell-Wedellsborg suggest a better approach.

They recommend that leaders at all levels become “innovation architects,” creating an ecosystem in which people engage in key innovation behaviors as part of their daily work. In short, this book is about getting to a state of “innovation as usual,” where regular employees make innovation happen in a way that’s both systemic and sustainable.

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1- Establish A clear sense of direction

2- Reduce bureaucracy

3- Instill a sense of ownership

4- Make sure recognition and rewards are consistent

5- A tolerance for risk and failure

6- Eliminate projects and processes that don't work




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