Respecting When to Reposition

There are some moments in which a company may be forced to reposition itself because the status quo has become simply untenable. In 2010, General Motors, once an industry titan, found itself in such a position. For too long, the massive company tried to make each of its brands all things to all people. This mindless grasping after market share led to dilution of identity for each of GM’s many brands. After so much line extension, GM executives awoke to find that their brands “lacked that simple differentiating idea . . . What is a Chevrolet? It is a big, small, expensive, cheap, truck, van, or sports car.” This is an identity so broad that is basically no identity at all. The key for GM moving forward will be to figure out what each of its four brands should mean to the consumer. What does Cadillac mean? Chevrolet? Buick? GMC? The future of General Motors depends on the way that it answers these questions.

Successful repositioning can take many different forms. A company can reposition itself as the “cool” option, the affordable one, or the one with excellent customer service. In these difficult economic times, high-end brands are facing the need to reposition themselves as valuable rather than merely prestigious. Who can justify buying a $10,000 watch during an economic recession? Is this the time to be making exorbitant purchases for the purpose of flaunting one’s wealth?

As a result, some smart high-end companies are now emphasizing the enduring value of their wares, explaining that while this watch may cost a fortune now, it will last for generations to come. As mentioned above, upscale companies that decide the times require a downmarket repositioning strategy must be careful not to do permanent damage to the prestige of their brand. The handbag company Coach, for instance, has recently marched out a sub-brand that costs significantly less than a normal Coach bag. The company hopes that it will be able to expand without dilution. As in all cases, the key to repositioning is a subtle readjustment of consumer perceptions rather than a wholesale change – “matching or fitting with perceptions is what effective repositioning is all about.”

Once a company has devised a carefully tailored repositioning strategy, it still needs to spread the word. The first step in this process is publicity rather than advertising. Publicity involves the endorsement of a third party, such as a newspaper, a television show, or even a well-regarded blog. It is vital because “you can claim that you are changing, but no one will believe you. [But] when others report that you are changing, it is a different story.” A company that hopes to reposition itself should begin by sending out press releases, and only then follow up with advertisements, which can reinforce the message that was originally and most persuasively communicated via publicity. A truly successful repositioning program will unfold slowly over time – maybe even over years – rather than explode all at once into the spotlight. The first kind of campaign is durable and effective; the second is likely to flame out before it has really done anything to adjust consumer perceptions.

Given the many pitfalls of repositioning, it is no surprise that successful attempts require strong, inspired, focused leadership. If a company is to effectively reposition itself, the CEO must lead the charge rather than simply delegate the task to the marketing department. Repositioning only works when the full resources of a company are brought to bear, and the only person who can effectively marshal those resources is the CEO. But even with full buy-in from the boss, the task is a difficult one. In fact, being the person on top comes with its own set of challenges: CEOs often become ensconced in their corner offices, ignorant of what is going on below them, never mind in the wider marketplace. Many CEOs are surrounded by sycophants and yes-men, none of whom want to deliver bad news to the boss.

This sort of insulation is fatal for the project of repositioning, and if a CEO is going to lead the way, he must work hard to find out what is really going on at the ground level. The first step is to gather good information. While building his Wal-Mart empire, for example, Sam Walton made it a point to frequently spend time in actual Wal-Mart stores, out on the front lines of his enterprise. This activity takes time, and other activities, such as service on boards and committees, might have to be sacrificed. After the CEO has gathered good information, he must articulate a bold, decisive plan and see to its implementation. “The best leaders are storytellers, cheerleaders and facilitators. They reinforce their sense of direction or vision with words and action.” Keeping a large, complex corporation on course is a difficult task, and it requires immense energy. Of course, in addition to all of this, a CEO needs a generous portion of luck to pull off a successful repositioning program. It is a tall order, but the best businesspeople will rise to the challenge.


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