Aimee Donnellan hit the nail on the head this week in Reuters Breakingviews: 'economic slowdowns have a habit of revealing the strategic problems lurking beneath a company's surface.'
It's not just CEO-monopoly at play, although their average lifespan seems to be diminishing daily, but something equally important - those areas that successful businesses underinvest in when they are doing well that comes back to bite hard when times are hard.
All four brands mentioned, Nestlé, Nike, Campari Group and Starbucks are guilty of two simple things that success and complacency breed:
1. Underestimating/misunderstanding/forgetting their audience: whether it is retail missteps, not innovating or simply being left behind by the newer, hungrier competition a failure to understand who their consumer is, what they want and how they want it has left them all lagging. Be it Nike's horrible UX that makes Gymshark look like the only option, even for brand devotees that don't consider themselves Gen Z gym bunnies or Campari Group totally misreading non-alc and what is really means, failing to truly understand your audience is failing.
2. Underinvestment in marketing: seems unbelievable right? But when was the last time you were actively sold a KitKat? Let alone sold one in a way that made you want one?
Are brands really downturn ready? Or are they so caught in the COVID bounce-back numbers they aren't even seeing the foundational issues laying siege to their shareprice? With heads rolling at the highest level I suspect the latter.
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