This Week in Business and Brands: Secrets to Success, Info-Tech Intensity, and More

Industry Spotlight: Nielsen’s 2018 CMO Report

Planning next year’s budget and business objectives? Take note of Nielsen’s 2018 CMO Report on navigating digital transformation. As marketers must now report marketing ROI and delivered value to the C-suite, they are struggling with the tools, technology, and measurement analytics to do so, despite — or because of — the huge amount of data available. Furthermore, media fragmentation has created siloed processes where data is not used in a holistic and consistent way. To remedy this, firms should invest in the right technology to better integrate their marketing stack and create a true omnichannel, customer-centric approach, as well as customer data acquisition and management capabilities so they are not locked out of vital direct relationships. As the line between digital and traditional blurs, implementing a more unified, channel-agnostic media strategy will simplify measurement and improve behavior tracking — essentials for any 21st century marketer trying to make meaning out of the madness.

The It Factor: IT Intensity

Why do some companies pull ahead while others fall behind? New data suggests that the secret to success is not just top talent or advanced automation, but investing in information technology. And it’s not just any kind of investment, but IT spending that goes into hiring developers and creating proprietary software owned and used exclusively by the firm, weeding out the competition. Tech companies like Google and Apple, as well as other giants like General Motors in automotive and Pfizer in pharmaceuticals, build their own software and hardware, inventing and optimizing their own processes instead of adjusting their business models to fit external developers’ infrastructure. While in the past new technologies, like Adobe’s desktop publishing software, were easily co-opted by other firms, today, diffusion has slowed down with the increasing complexity of new IT, like Amazon Web Services, and its inextricable link to the engineers, systems, and business models built around them. This might explain the current mania for mergers and acquisitions: when companies cannot just license or copy someone else’s IT, they must either create their own from scratch — a costly and time-intensive endeavor — or simply buy firms that have already developed these critical technologies. Only time will tell if modern IT has built in a kind of natural monopoly into our business landscape…

Leadership Lessons: Lead with Local Know-How

When it comes to platform businesses, winner-takes-all dynamics seem to dominate, with household names like Google, Facebook, and YouTube ruling their respective sectors. However, when underdogs’ offerings mix the digital and the physical, their local know-how can topple global giants. In the physical world, where customers can’t just click through to a country-specific website, local customization of services across different markets is a lot harder — and more crucial — to implement. Uber understands this all too well, pulling out of China, Russia, and most recently, Southeast Asia, when they failed to adapt to compete with local players. For example, their rival, Singapore-based Grab, understood that going cashless in Southeast Asia was not frictionless, but frustrating, for drivers that needed daily income and for riders who often didn’t carry credit cards. Unlike Uber, it demonstrated that local adaptation is essential for platform businesses, sometimes more so than the allure of quick scaling and general network effects.

Talking Tactics, Tête-à-Tête: McDonald’s Maneuvers

When society today is obsessed with wellness, healthy eating, and premium experiences everywhere they go, QSR incumbents like McDonald’s can find it difficult to align with these new consumer expectations — but that doesn’t mean they’re not trying. After a stellar round of second-quarter results, CEO Steve Easterbrook shares what the future holds for the fast-food chain.

On broadening the base: “There isn’t a conscious effort to take the brand upmarket…When you invest in quality, provenance, technology, you broaden your customer base. We want to appeal to a broader range of customers on more occasions more often.”
On driving demand: “‘[The partnership with UberEats] is a meaningful contributor to sales. Delivery is contributing to our success now, and offers untapped potential in the future.”
On all-round excellence: “We remain focused on delivering the most enjoyable experience for every customer, every visit. Whether that is when they visit a modernized restaurant with inviting hospitality or through the convenience of having delicious food delivered to their home, we know that our fundamental day-to-day commitment to our customers is running great restaurants.”

Keeping Corporate Power in Check: Consumer Resistance

That’s all for this week! We’ll leave you with a take on how consumers can resist companies’ market power, especially when faced with infinite choice…